How Ecommerce is Keeping it Real with Virtual and Augmented Reality

The year 2016 may well be remembered as the year of ecommerce. Walmart – once the brick-and-mortar retailer par excellence – has announced plans to dump $2 billion into its online efforts. Meanwhile, Amazon has eclipsed Walmart’s valuation and online sales of consumer packaged goods went up 42% last year alone.

There’s just one problem: the tricky issue of conversions, i.e. turning mere browsers into actual buyers. Traditionally, online commerce has averaged a paltry 2%-4% conversion rate, compared to rates of 20%-40% in traditional retailers. The reasons for this disparity are multiple, but a big part of it has to do with the sensory limits of ecommerce. As consumers, we want to try before we buy. Not just seeing but holding, wearing and trying out are all key steps in the buying process – a tactile barrier that online retailers have long struggled with.

While some online retailers approach this challenge with traditional solutions (sending out samples and offering free returns) others are starting to embrace the surge of innovation around user experience to their advantage. Cutting-edge multichannel retailers are looking to virtual reality and augmented reality tools to offer buyers new forms of engagement and interaction – giving customers an experience that not only replicates the brick-and-mortar store, but in some cases surpasses it.

Getting in early with VR

While the jury is still out as to when virtual reality will become truly mainstream, the “yes” side of that debate has gotten a leg up in recent months. VR stole the show at SXSW Interactive this year, with an entire conference track dedicated to the technology. And last month Alibaba threw its hat into the VR ring with the launch of GnomeLabs, a research arm dedicated to helping merchants better use VR to sell products online. Alibaba claims it has already created VR visuals for hundreds of items with a long-term goal of offering consumers the option to shop inside Fifth Avenue stores, online.

Closer to home, we’re already seeing major ecommerce players take steps in the virtual direction. NARS makeup, for instance, is currently using Facebook’s 360 Video to offer customers a new interactive way to click and drag their way through 3D makeup tutorials. Facebook 360, which allows users to navigate a 360-degree view of any video without the aid of special headsets, may well be the gateway drug to full VR down the road. Meanwhile, fashion powerhouses Dior and Tommy Hilfiger have been experimenting (for the moment, just in-store) with VR headsets that offer an immersive 360-degree catwalk experience. The 3D video gives consumers a front-row seat at seasonal fashion shows and instant VIP access to the labels’ product lines in an (almost) real-life setting.

These are just a few ways VR is letting customers reclaim a 3D experience that transcends the confines of boring 2D product pages. And while access to and adoption of hardware continues to be a challenge, low-cost solutions like Google’s cardboard headsets may mean it’s only a matter of time before more brands look to experiment further with this technology.

One important point to note: being an early adopter in VR marketing comes at a cost and with a long timeline. It can take six months or more to produce a high-quality 360-degree video, from planning the script to shooting and promoting online. So it’s time to jump on this now instead of waiting for competitors to get the edge on you in 2016.

Understanding AR

One common objection of brick-and-mortar loyalists when it comes to investing in ecommerce is that customers want to physically interact with products before they purchase. Virtual reality gets you close, but augmented reality – which integrates real objects and projected images – can bridge the gap even further. At its heart, AR allows consumers to use real-life spaces and even their own faces and bodies and “try on” furniture, clothing and more virtually.

For instance, today’s shopper has the option of seeing how an Apple Watch looks on their wrist using a virtual mirror on their iPhone. Eyeglass retailers like Clearly have long offered simpler, lower-tech variations on the same theme, allowing consumers to spend as much time as they want trying virtual frames on their own face using a webcam.

In a different retail space, the tech platform Cimagine has pioneered an AR tool that lets shoppers arrange furniture and appliances in their own living space. The tool lets users integrate photos of their home with product images, offering buyers a concrete visualization of potential purchases. Meanwhile, my own company BuildDirect is experimenting with AR-inspired technology to sell materials for home improvement projects through a Design Center, where customers can plan out renovations to their bathroom. Users can plug in their layout, then customize anything from materials to furnishings, seeing how the room will look in real time and making purchases as they go. When customers are considering a $30,000 to $100,000 renovation, being able to see what the end result will look like is critical.

Interestingly, the real potential of these technologies isn’t just replicating the store experience. When executed properly, they surpass it, giving shoppers the ability to view more options and variations in less time than a physical showroom would allow.

So is it time to embrace VR and AR in your own company? It’s worth noting note that these aren’t pie-in-the-sky capabilities that we’ll be seeing five years from now. This technology is here now and already gaining traction. For consumers, of course, there’s no question that VR and AR add critical elements to the ecommerce equation, integrating feeling – both physical and emotional – into the buying experience. This combination of new technology and basic human tendencies suggests we’ll be seeing a bonanza in VR and AR ecommerce experiences in the near future.

Jeff Booth is cofounder and CEO of BuildDirect

This article was originally posted in 2016 and is frequently updated

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