Why are brands in a race to capture the Virtual Experience market?
According to Accenture’s new Business Futures, Signals of Change report, less than one percent of retailers use augmented reality (AR) and virtual reality (VR) technologies to improve the consumer experience. But, increasing this to just two percent could translate into an estimated additional sales growth of $66 billion for retailers.
Oliver Wright, Global Lead of Accenture’s Consumer Goods & Services Industry Group, says that the current business environment is ripe for reinvention. There is a strong desire to look deeper into the future for growth, not just survival.
“The scale of disruption and the compressed timeframe for action last year [in 2020] serves as a powerful illustration of how organisations need to be agile, resilient and responsive to change,” said Wright.
Wright says that when stores closed during the Covid-19 pandemic, brands and retailers engaged consumers via sophisticated AR and VR applications that simulated the real-life shopping experience with virtual try-ons, how-to videos, live streaming, and beauty and cooking masterclasses.
Beauty embraces virtual
In 2020, Shiseido let customers test cosmetics on a mirror-like touch screen that simulates how colors will look on their skin. They used wristbands that enabled customers to add the products to a virtual cart rather than carrying them around as they browse.
MAC Cosmetics lets their customers try makeup with their phone using Snapchat and different AR lenses, which they previously did only in stores. Their data showed that consumers who used the app were three times more likely to buy an item, spending 10% more, on average.
Makeup and hair-care brand L’Oreal released an app called Makeup Genius, letting consumers try out various hair colors and makeup styles.
“As this integration happens, virtual worlds will become increasingly realistic, providing a great sense of the physical,” said Wright. “For example, one company developed mask-scent devices that emit scent particles so, when people walk through a virtual park, they will be able to smell grass and flowers.”
VR to enhance interactions
The Business Futures report also showed that nine out of 10 C-Suite executives in retail and consumer goods companies said they invested in creating virtual environments and plan to invest further. On top of that, 73% of respondents in the report noted that virtual environments would primarily enhance their interactions and experiences in physical environments.
Wright looks to the London-based startup Overview Ark as another example of a company that innovated during the pandemic. Overview Ark sells tools to build virtual replicas of live shows without the need for in-depth programming knowledge.
The company focuses on live concerts that can be experienced in a 3D world through VR headsets.
Wright notes that one of the biggest takeaways from the report is how we define the future.
“That window is much shorter than we’re used to – it’s just up to three years, rather than a five or ten-year investment outlook,” added Wright. “We see a compressed transformation across industries. What used to be on the timeline for five years out is now much more immediate.”