AR and VR Companies Compete for Retail
By Neil Singh
AR and VR Transforms Traditional Brick-and-Mortar Companies
Augmented Reality is reshaping the retail landscape one piece at a time. This market niche is fast becoming the preferred method for development firms in the AR and VR space.
In recent years some of the top examples of AR in retail have been from companies like Ikea, Lego, Sayduck, IBM and Converse just to name a few. But perhaps most exciting or even somewhat surprising has been Chanel and its investment into Farfetch to transform fashion retail.
The Need To Evolve Brick-and-Mortar Retail
Traditional markets are rapidly changing due to consumer behavior. Online shopping is now the standard, and brick-and-mortar businesses cannot keep up with how rapid the cultural change has been.
Those with both online and offline presence however are trying their best. We have seen a number of shopping platforms emerge from numerous retailers where e-commerce has an added value. And now, after the past decade of significant investment in their digital presence, while still maintaining existing physical stores, they are facing the experience of having to once again overhaul their buyer experience by adding AR or VR to their retail ecosystem.
Walmart recently acquiring Spatial Land shows it’s serious about VR. This indicates significant interest now by many companies to build out AR or VR infrastructure and change the way users shop forever.
Facebook meanwhile is still developing its virtual social communities. The emptiness of current VR social communities is of great concern to those who have already developed for such platforms. Everyone has their own perspective on what will happen in the industry, and it is compelling to consider the different business models at play. It could be assumed that the idea of virtual real estate within a virtual community where retail thrives is one option. Of course, this would be a simulated environment.
The reality is that there is not enough users yet for VR hardware to make a social platform worth it. We may however see gaming companies explore the option since building communities in multiplayer games tends to be easier and may also be appealing to eSports and other genres of VR gaming.
In mixed reality or augmented reality competition is heating up. Among creative AR startups and their suitors is a case for nearly every type of AR application for retail imaginable. Magic Leap has indicated recently it also intends to move into retail.
Many are focusing their interests on wearable AR or MR technologies for everyday use. As the market heats, up Microsoft has announced it is working on a new HoloLens headset. Function and fashion may very well be incorporated to its design.
The retail business model has many facets ranging from real life display of actual goods/product to advertising opportunities through AR/VR. Outside of this, logistics, manufacturing, and a number of B2B opportunities also exist which facilitate retail industries and perhaps for AR companies in particular the B2B opportunities will not saturate as fast as the B2C market.
Whether or not a lot of the early stage retail ventures will be successful in AR, despite their partnerships and investments, is yet to be determined. But, for those who have paired up with strong brick-and-mortar brands the pressure to reach a successful outcome is evident.
While many companies can present an AR or VR solution the question of changing buyer behavior still remains. With mobile being the most globally adopted format it stands to reason that companies implementing VR or AR solutions which take advantage of the mobile ecosystem that already exists will be at the forefront of adoption for these new platforms.