Virtual reality in retail: 11 use cases, benefits, and adoption practices

Virtual reality in retail: 11 use cases, benefits, and adoption practices

August 29, 2023

Virtual reality in retail implies using specialized VR hardware and software to provide an immersive ecommerce experience. VR technologies help retailers make shopping engaging, improve traditional customer interactions, and thus stand out from competitors.

Enterprises initiating retail software development incorporate VR in their projects to build a profound emotional connection with a customer, increasing their loyalty and trust. Below, we break down the concept of VR in retail and provide its use cases, examples, and business benefits.

Table of contents

VR in retail: a market overview

Virtual reality is becoming more widespread across many industries, and retail is no exception. Here are some numbers and facts that highlight the emergence of VR in retail.

Growth

The global VR in retail market is projected to reach $5.455 billion by 2028, growing at a СAGR of 13.82% from 2022-2028

Valuates Reports

Usage

32% of consumers used VR to test and purchase products; 19% used VR to buy luxury goods

PwC Research

Customer preferences

Almost 60% of consumers prefer at least one activity in the immersive world versus the physical alternative

McKinsey

Virtual reality shopping

79% of consumers active on the metaverse have purchased real-world products there

McKinsey

Scheme title: How consumers used VR in past six months
Base: all respondents (9,069); those who have used VR in the last six months (2,878)
Data source: PwC Research — Consumers respond to waves of disruption, 2022

Extended reality in retail: VR + AR

VR is one part of the broader concept called extended reality, encompassing such technologies as virtual, augmented, and mixed reality (VR, AR, MR). Since all these technologies can be applied in retail, retailers should understand the difference to make the best choice.
VirtualFully immersive virtual environmentAugmentedPartly immersive environmentHumanEnvironmentComputerMixed

Virtual reality

With VR, a user experiences a complete audiovisual immersion in a 3D digital environment. In other words, the virtual environment doesn’t complement but completely replaces reality, ensuring maximum customer engagement.

Augmented reality

Using augmented reality (AR) solutions, users look at the natural world through a specific filter that “embeds” virtual objects in their environment. Compared to the VR experience, here, users retain the feeling of presence in real life.

Mixed reality

Mixed reality combines elements of the physical and digital worlds, making both almost indistinguishable. MR is often considered a more immersive and interactive version of AR.

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Top 11 VR/AR use cases in retail

Here are the main applications of immersive technology in the retail industry, some of which imply the combination of VR and AR.

VR showrooms

Replacing physical showrooms with virtual ones, retailers help customers try out and purchase products online. With high-resolution 3D images and video, overlaid product descriptions, zoom-in, fabric close-ups, and multiple experience customization options, VR showrooms are fully equipped to deliver life-like experiences at a fraction of a live fashion show’s cost.

VR-based advertising

Virtual reality holds a special place in retail marketers' toolbox due to its proven ability to elicit a strong emotional response from the viewer. In particular, VR helps marketers deliver interactive and, thus, more engaging ads via gamification. Such gamified advertising is a way to tap into consumers’ need for excitement while increasing their engagement with the promoted product.

VR merchandising

Both online and brick-and-mortar stores use product merchandising as a crucial marketing activity that relies on customer data to prove effective. Virtual reality adopted for marketing research purposes can fill this data gap, eliminating guesswork.  With headsets tracking users’ eye movements, in-store merchandisers can accurately track consumer perception and intent and, using this data, determine optimal product placement in-store. Also, thanks to the flexibility of virtual reality design, marketers can effortlessly alter test case variables and try out different scenarios.

In-store navigation

Retail stores can equip their offline sales areas with specific AR markers, which can look like normal stickers, to identify the customer’s location. Using an AR-based mobile app, a customer can receive clear instructions on where to find a particular product or store department, which simplifies the purchasing process and improves customer experience.

Product information

If the store offers an AR-empowered mobile app, clients can scan a particular product with their smartphones and obtain detailed information about it. For example, a customer might check a pair of shoes to find out their price and material, and, if the shoes are too big or small, check for another size in the store.

Interactive packaging

Retailers can equip product packaging with interactive QR codes or other markers that customers can scan with an AR-powered mobile app. Such a marker enables buyers to get more information about the purchased product or check the brand’s discounts and special offers.

Placement preview

In this scenario, immersive technology can help customers discover what a particular product would look like in their home. For example, a client can choose some furniture from an online catalog and use the AR app to visualize it in their apartment, view the item from different angles, and then buy it, confident in the purchase.

VR payments

Retailers can apply a payment feature to existing VR and AR experiences, making the buying process easier and smoother. For example, a retailer can integrate payments into a VR solution to enable purchasing without interrupting the virtual try-on, thus contributing to customer engagement.

VR analytics

Immersive technologies such as VR and AR allow retailers to collect data about customers and their interactions with the virtual environment, even in real-time. Retailers can use this information to enhance their virtual content and make it more engaging; otherwise, they can fine-tune marketing campaigns based on behavior and preference data.

Employee training

Thorough retail employee education is fundamental to business growth and customer satisfaction. Virtual reality, increasingly gaining traction as a corporate education tool across industries, can help retailers improve training outcomes. The switch to VR training promises substantial financial savings. Once developed, the modules scale up effortlessly and need minimal upkeep or instructors’ intervention. Also, VR is the best option for remote training for employees in distant locations or teleworkers, as it requires no other equipment than a headset and controllers. 

Warehouse optimization

Finally, retailers can enhance their warehousing operations with VR and AR technology. For instance, using AR, employees can scan an item with their cameras to get information about its particular shelf in a warehouse. VR, in turn, allows employees to visualize warehouse spaces in a virtual environment, simplifying planning and enabling more reasonable distribution of goods in the warehouse.

Examples of VR in retail

Let’s look at four VR use cases that have radically changed customers’ journeys and business workflows.

IKEA's Virtual-reality showrooms

For furniture retailers, VR showrooms have become almost a go-to business technology. Taking a leaf from IKEA’s book, which has been offering its Virtual Home Experience interior lab for about five years, multiple companies around the globe promptly launched VR showrooms for customers to explore products from different angles and in every possible configuration.

Balenciaga's VR-powered promotions

Some brands adopt VR to make the customer experience more exciting while facilitating their engagement with the promoted product. For example, to support their autumn/winter 2021 collection, the luxury fashion brand Balenciaga released a VR video game Afterworld: The Age of Tomorrow, now freely available on their official website. Creating an avatar dressed in Balenciaga’s latest garments, players navigate a futuristic landscape and complete several simple quests. After completing the game, some players shared their impressions on social media, contributing to Balenciaga's brand awareness.

Kellogg's virtual-reality merchandising

Kellogg partnered with Accenture and Qualcomm for a VR solution to help them find the best place for their newly launched Pop-Tarts Bites product on the shelves. Together, the tech companies created a life-like virtual supermarket with aisles, shelves, and products where focus group participants could “shop” wearing VR headsets integrated with an advanced eye-tracking analytics solution. According to Kellogg’s research, the company saw an 18% sales increase during the testing period.

Walmart's virtual-reality employee training

One of the early VR adopters, Walmart, has been leveraging virtual reality since 2017, continuously ramping up the number of training centers and learning modules for day-to-day and out-of-the-ordinary activities, like Black Friday or the holiday rush. With over a million retail associates and managers having already passed immersive training, Walmart reports improved knowledge and skill retention, higher staff satisfaction, and a considerable reduction in training time, eliminating the need for employees to stay late or study on their days off.

Benefits of virtual reality in retail

Enhanced customer engagement

With VR, a retailer can deliver outstanding customer experiences beyond real-world capabilities, which is a competitive advantage. Retailers can also generate different types of interactive content to encourage customers to buy more or provide them with entertainment and leisure.

Improved business performance

VR and AR help retailers improve store performance and employee productivity. For instance, customers can use AR apps to quickly find product locations or check product info without turning to a human specialist. Meanwhile, physical store employees can focus on more critical tasks like marketing and in-person sales.

Advanced marketing capabilities

VR devices collect large amounts of data that help retailers get a clearer picture of their audience and better understand their behavior, especially if complemented with artificial intelligence. Therefore, VR technology enables various marketing techniques, such as virtual advertising, which helps retailers run effective and engaging marketing campaigns.

More sources of income

Virtual or augmented reality can bring an additional sales and revenue channel. Since the number of VR and AR users grows yearly, retailers can use immersive technologies to expand their customer bases, foster online sales, and ensure stable business growth.

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VR adoption barriers

VR adoption is also riddled with several challenges. Learn how to solve them and use VR as a viable tool for digital transformation in retail.  

Challenge

Solution

1
Price

Challenge

Solution

The average VR project requires rigorous 3D modeling, experience design, software development, and thorough usability and performance testing. All these factors make VR projects quite costly.

An experienced end-to-end VR development provider can help you design and build a bespoke solution tailored to your needs and optimize the project costs in advance.

2
Technology unawareness

Challenge

Solution

Another reason why retail businesses balk at adopting VR is customers’ unawareness of the technology. For example, customers, especially those who are not tech-savvy, may feel anxious about the hardware and VR-enabled experiences.

Education is the key to dispelling customers’ apprehensions. By providing a detailed demonstration of how to handle headsets and controllers and use all the features of a VR app in an engaging and accessible way, the brand can ease end-user concerns and ignite their interest in immersive experiences.

3
User experience

Challenge

Solution

VR user experience is also a concern for retailers, as the technology is infamous for causing motion sickness and fatigue.

Retailers can provide short VR experiences, no longer than 20 minutes, to minimize fatigue risk.

Popular AR/VR technologies

When working on AR and VR projects, developers use specific technology for creating and providing immersive experiences.

ARKit and ARCore

ARKit and ARCore are software development kits (SDKs) developed by Apple and Google, respectively, for supporting augmented reality (AR) experiences on mobile devices. They are the default (and usually the best) starting point for AR development, which targets mobile platforms.

Cross-platform AR

There are also a couple of options available for those looking for cross-platform AR implementation.

Xamarin

Xamarin is a framework for cross-platform development for Android and iOS. It supports AR, among many other features, by delegating the implementation to ARKit and ARCore, respectively.

ViroReact

ViroReact is a library that enables developers to create and deliver AR and VR-based immersive experiences for ReactNative applications.

AR.js

AR.js is a lightweight library for augmented reality on the web, which includes features like image tracking, location-based AR, and marker tracking.

Advanced AR/VR engines

Unity

Developers often use Unity to create virtual reality features in mobile games and provide an immersive mobile retail experience. However, Unity's application range goes beyond mobile, as the engine works well with the most popular VR systems, such as HTC Vive, Oculus Rift, and Gear VR.

Unreal

Unreal engine allows developers to create realistic environments, detailed textures, and quality 3D graphics, making it ideal for realistic or hyperrealistic projects. Many VR systems, including SteamVR, HTC Vive, or Google VR, support Unreal.

VR implementation roadmap in retail business

1

Project design

Developers specify software requirements to plan a practical and future-proof VR solution.

2

3D content creation

VR simulation is just an empty shell without quality and engaging content, so developers proceed with its creation early on.

3

Moving from 3D to VR

Developers use ready-made 3D graphics to create a full-fledged virtual reality and add sounds and other environmental elements.

4

Testing and release

Finally, developers conduct multiple technical and user acceptance tests before releasing the VR solution to the market.

VR implementation best practices

Here are several professional recommendations to help retailers ensure successful VR adoption.

Calculating TCO

If a retailer fails to predict the cost of VR development accurately, developers can overrun the project budget, which is often accompanied by delays and, consequently, increased time-to-market. To avoid such problems, retailers should calculate all VR costs in advance, and here, such a parameter as the total cost of ownership (TCO) may come in handy. To identify the TCO of its future VR solution, a retailer should consider the following factors:
  • Hardware cost
  • Software development cost
  • Data migration cost
  • Ongoing maintenance cost
  • Employee training cost
  • Data management cost

Developing an MVP

Before investing heavily in disruptive technologies like VR and AR, it's worth ensuring they are viable for a specific business case. Developing a minimum viable product (MVP) that encompasses only core functionality is one of the best ways to ensure VR viability and guarantee the investment payout.

Building a change management strategy

The introduction of the technology can cause disruptions in the retailer's work, as it can take time for employees to adapt VR and use it to its full potential. Therefore, retailers should develop a comprehensive change management strategy before project launch to ensure high user adoption and thus increase the solution's ROI.

Consulting with virtual reality experts

To ensure the success of their VR projects, retailers should involve professionals in the early stages of development. Expert VR consultants can conduct business analysis, provide a step-by-step project plan, and, if necessary, develop the solution and ensure its post-release support.

Provide an outstanding customer experience with VR

The retail industry is no stranger to VR. Over the years, immersive applications have been making in-store and online shopping experiences fun and memorable, helping brands stand out and drive consumer loyalty.  Although obstacles to VR adoption still exist, they are minimized due to the technology's advancement and growing expertise. So if you're ready to transform your retail business and offer a VR shopping experience to your customers, Itransition experts can ensure a smooth VR adoption.

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