Augmented reality (AR) and virtual reality (VR) have the potential to shake up the customer experience by individualizing retailers’ offers and enabling customers to visualize products in different settings. By 2020, 100 million consumers will shop in AR online and in-store, according to Gartner, Inc.
“Retailers are under increasing pressure to explain the purpose of physical stores, and take control of the fulfillment and return process for cross-channel execution,” said Hanna Karki, principal research analyst at Gartner. “At the same time, consumers are progressively defining the value provided by the experiences they receive from retailers. As a result of these pressures, retailers are turning to AR and VR to offer customers a unified retail experience inside and outside retail stores.”
A 2018 Gartner survey* indicated that, by 2020, 46 percent of retailers planned to deploy either AR or VR solutions to meet customer service experience requirements. Additionally, the technologies behind these solutions have moved 15 to 30 percent further along the Gartner Hype Cycle over the past 12 months.
“The impact of AR or VR in retail can be transformative,” said Ms. Karki. “Retailers can use AR as an extension of the brand experience to engage customers in immersive environments and drive revenue. For example, IKEA’s Place app enables customers to virtually ‘place’ IKEA products in their space. Additionally, AR can be used outside the store after a sale to increase customer satisfaction and improve loyalty.”
With VR’s immersive interfaces, retailers can create task efficiencies or reduce the costs associated with designing new products. They can also enhance the understanding of information through advanced graphical visualization and simulation technologies. Pilots and implementation examples include Alibaba’s full VR shopping experience, virtual reality tours by Tesco, Adidas’ VR video to promote its outdoor clothing collection, and eBay Australia’s partnerships with Myer to create personalized stores.
Unlock AR and VR’s Full Potential with 5G
5G mobile network technology represents an opportunity to accelerate the adoption of AR and VR in stores. Gartner’s recent 5G enterprise survey indicated that AR/VR applications of 5G attract the highest expectations for becoming drivers of new revenue, across all use cases and respondents. 5G capabilities can support multiple uses cases, such as real-time rendering for immersive video, shorter download and set-up times, and extension of brands and shopping experiences beyond stores.
“Gartner expects that the implementation of 5G and AR/VR in stores will transform not only customer engagement but also the entire product management cycle of brands,” said Sylvain Fabre, senior research director at Gartner. “5G can optimize warehouse resources, enhance store traffic analytics and enable beacons that communicate with shoppers’ smartphones.”
Gartner clients can read more in the report, “Include 5G and Next-Generation Wireless in Roadmaps to Elevate In-Store Retail Customer Experience.” More information on customer experience strategy can be found in the Gartner CRM and Customer Experience Strategy Primer for 2019.
Gartner’s Unified Retail Retailer Survey was conducted online and via computer-assisted telephone interviewing (CATI) from July 2018 through August 2018, with 97 respondents in Europe (including the U.K.), the U.S., Canada and China. The aim was to help Gartner understand organizations’ multichannel or cross-channel strategies and digital business initiatives. Companies were screened for having retail as their primary industry, and were classified as being in general retail, grocery and food retail, or specialty retail. Respondents were required to be makers or influencers of decisions for their retail organization’s multichannel strategies and digital business initiatives. The results reflect the views of the respondents and companies surveyed. They do not represent global findings or the market as a whole.
Gartner Customer Experience & Technologies Summit
Customer experience trends will be further discussed at the Gartner Customer Experience & Technologies Summit 2019 taking place May 22-23 in London and June 17-18 in Sydney. Follow news and updates from the event on Twitter at #GartnerCX.