Vantiv Omnicommerce Tracker™ March 2017
A Whole New Retail Virtual Reality
Every month, Vantiv and PYMNTS.com team up to deliver the latest news in omnicommerce. Here's an overview of the Omnicommerce TrackerTM published in March 2017.
Augmented reality (AR) and virtual reality (VR) are opening up a whole new world for retailers of all sizes. By giving consumers the ability to interact with objects regardless of where they’re physically located, AR and VR hold particular promise for consumers seeking a full omnicommerce experience.
Research published in the Harvard Business Review in September 2016 predicts that this ability to “reshape retail” will power as much as $30 billion in AR and VR investments from retailers by the end of the decade. Meanwhile, other industry projections show that more than 800 million AR apps for retailers will be downloaded by consumers by 2019. Retailers like Converse, De Beers and Wayfair have already embraced the new technology.
According to Beck Besecker, cofounder and CEO of Marxent, AR and VR can be particularly impactful for home furnishing retailers. Marxent designs AR and VR solutions for retailers, including several large home retailers like Ashley Furniture and Lowe’s.
March’s Omnicommerce Tracker features an interview with Besecker in which he describes this new technology as an almost perfect match for home furnishing retailers. Because these retailers sell large items with big price tags that typically require extra thought and consideration, VR and AR can help consumers make the most informed decisions possible.
“What we do is provide a really easy application that both consumers and sales associates can use to help a customer visualize their potential purchase as easily and quickly as possible,” Besecker explains. “You can use AR and VR technology to help give a preview of what an item looks like in a room in a highly realistic, very fast way.”
Besecker notes that because Marxent’s partners often deal in big-ticket items, these purchases are not just costly but are also likely to remain in a customer’s life for years, if not decades. As a result, Marxent offers two different solutions. Both are designed to help consumers feel more confident about their purchases by allowing them to test or preview different items before pulling the trigger.
One is an AR solution that allows customers to see what a couch or other piece of furniture will look like in a particular room. The other is a VR solution that allows users to build their own rooms from scratch, testing different appliances or furniture in the virtual spaces.
Besecker says that both applications can help merchants shorten the time it takes to make a sale and increase their bottom line.
“The reason a retailer or manufacturer would offer this is simple. If they can see it, consumers will have a higher level of confidence,” he explains. “We usually see a 50 percent shorter sales cycle, because people hesitate less if they can see it. It also increases the overall transaction size, which in turn increases overall sales.”
Besecker also notes that these solutions are especially powerful for retailers’ mobile and online solutions. While furniture and other home retailers have typically struggled to appeal to online shoppers because of that inability to test or preview an item, mobile and online solutions that use AR allow users to see how furniture might look in a room. They can stand in that room while wearing a VR headset, which projects the new items into a virtual room.
While Marxent has attracted attention from its partnerships with large national retailers like Ashley Furniture and Lowe’s, Besecker attests that AR and VR technology hold promise not just for big-name retailers, but smaller merchants as well.
Besecker acknowledges that the technology’s high price tag could deter smaller retailers that don’t have the resources to spend on cutting-edge technology. But despite this, Besecker says that new solutions or strategies could open up the technology to retailers of all shapes and sizes, from national chains to local mom-and-pop storefronts.
“The reality is that something like this solution works, for every retailer and manufacturer, big or small,” Besecker says. “So we’re looking at helping smaller retailers that want something like this but can’t afford to make a big investment via a third-party application before helping them roll it out under their own umbrella and user experience.”
With AR and VR technology becoming more commonplace, when consumers shop for home goods, at stores big and small, they may increasingly make purchases more confidently, with the help of a virtual preview — and boosting the bottom line for retailers and manufacturers in the process.
Here are other notable developments covered in March’s Omnicommerce Tracker:
- A recent projection from BI Intelligence predicts that mobile payments will grow rapidly by decade’s end. The report estimates that U.S. in-store mobile payments volume will reach roughly $75 billion by the end of 2017 and could be as high as $503 billion by the end of the decade. The projection is fueled by growth in 2016, which the study called a “banner year for mobile payments” thanks to increased adoption of platforms like Apple Pay and Android Pay.
- When it comes to fashion and cosmetics purchases, most consumers want to know how a product will look on them before they buy it. This presents challenges for online merchants. But AR and VR solutions are giving digital retailers like online beauty platform Perfect Corp. new ways to connect with online customers. The company recently announced a new partnership with beauty brand Charlotte Tilbury that will allow consumers to upload photos of their faces to test different lipstick shades in real-time via the YouCam Makeup app. Perfect Corp. executives said in a release that the new feature is designed to replicate the “ultimate makeup counter experience” outside of the store itself.
- A new survey from Boston Retail Partners finds that merchants are increasingly turning to mobile payments to help cut down on lines. The study reports that just fewer than half of retailers have sales staff using mobile solutions, an 18 percent jump from 2015. The research also finds that 57 percent of retailers offer additional product information and other resources via a mobile channel.