VR & AR will shape the future of your industry (but only if done well)

If you are reading this on a screen, there is a good chance that you have spent the last six months confined to the comfortable, but predictable confines of your home. As most of the world tries to get back to a semblance of the ‘normal’, it is well understood that what ‘normal’ is now is quite different from what ‘normal’ was.

How many of us can now imagine going to a birthday party and blowing candles on a cake? Or, engaging in a group hug after a team building session? Or, even enjoying the sins of a heavy breakfast buffet at a hotel?

And yet, we are human beings. Programmed to live with the stimuli that has enabled our species to grow and thrive over thousands of years.

Quite frankly, sitting at home and looking at a screen is not working for us!

Beyond these deep questions of physiology, biology and existentialism, the more practical aspects of work, commerce and, for folks like me, marketing have become more real and urgent.

How do we now sell, communicate, transact and excite potential customers and users with limited stimuli or touchpoints? No longer do customers walk into showrooms, shops, arenas, conferences, etc., for us to create and control an environment which can wow them into instantly connecting with our products and services.

It is clear, therefore, that we (the creators, makers and builders) must go to them (customers, users and consumers). In doing so, we give up that well shaped, craftly created and extensive environment. It looks like we may have to find another way!

Enter, technologies like virtual reality (VR) and augmented reality (AR), which have been around for quite a while… but just like yoga, vegetarianism and moderate living, their updated avatar seems to find new relevance.

Imagine wanting to buy an Omega (watch), or a nice hair dryer or vacuum cleaner from Dyson, or attend your favourite music festival. Gone is the access to associates, swanky shops, or iconic arenas. What is left is a product, the customer and, possibly, a hyperlink in the middle.

But, what if you could still get an immersive experience for a product in just few clicks, or through an application, some inexpensive hardware and your Internet connection.

Sure… our world has changed. But the reality is that the last 100 years have been filled with constant and often tectonic changes. Though this technology, understanding customers and some bold moves have helped certain brands and companies, survive and thrive.

So, the question to ask ourselves now is – Are we truly changing? Are we ready? Or, is our strategy based on a deck and a prayer, hoping that things will go back to being ‘normal’?

VR, along with its sister technology AR, offers retailers and brands the opportunity to transform how people shop. These are emerging technologies, but investment in the sector is hot, with AR and VR startups raising $658 million in equity financing last year. Some projections put AR and VR investment in retail at close to $30 billion by 2020.

One customer might want shorts without having to travel to the store. Another might want to order an expensive vacuum cleaner on the spot and want to be sure that it’s right for the house. Applications using either technology stand to eliminate customer pain points, elevate customer service, and create a differentiated, personalised customer experience – but more importantly, the aim is to fill the gaping hole of lack of in-person stimuli and touchpoints. The successful incorporation of VR and AR into retail models also has the potential to vastly change the way retailers are thinking about stores, or agile business for the consumers.

So, what should be the VR/AR commerce strategy?

1. VR immerses the consumer in a simulated world. Hence, it is important to know and design that world in detail. Hence, organisations and brands will require the right skill sets and people to translate real world elements into the virtual world.

2. Decide whether the application is for in-store, out-of-store use, experiential, etc.

3. Build understanding and certain expertise in leveraging these technologies in-house. While software partners and vendors may do most of the heavy lifting, expect the best results and value for your investments, when the internal stakeholders deeply understand the inputs and the outcomes.

4. Define why are you doing it? This would mean asking the hard questions of possibly what you are missing, lacking, or would like to try new to move into the future. Just like with any major strategic, or big bet, it helps immeasurably to know the ’Why’.

5. And, the most important, how does this connect to the business model. This is where, we may move towards defining KPIs, budgets, ROI, etc.

(This post was first published by the author on LinkedIn, and has been reproduced with permission.)

(The author is the marketing director at BMW India.)