Virtual reality: the next hot retail technology
It seems like a new use for virtual reality is introduced every day. Now, you can safely swim with sharks. You can virtually design your home. Medical students can experience symptoms and practice on virtual patients.
With new opportunities, and the limitless potential of virtual reality’s impact on our day-to-day, purchases of premium virtual reality equipment are expected to triple among consumers in 2017. And as VR becomes more ingrained in everyday life, it’ll be part of all experiences, including shopping.
How virtual reality will affect retail
Despite the rise in e-commerce, online conversion rates are still much lower than those of brick and mortar locations. Only two to four percent of online browsers become buyers, whereas 20 to 40 percent of on-location browsers ultimately make a purchase.
The desire to hold a product before buying will always be a part of the consumer purchase decision, one that e-commerce cannot compete with. However, virtual reality can actually make testing or holding products even easier in the future. In-store hurdles like items being temporarily out of stock or unavailable in a certain size will also be overcome, contributing to even better conversion rates. For the items you can’t just hold in your hand or try on in a fitting room, VR tools like the tech platform Cimagine will allow shoppers to visualize furniture and appliances in their own homes.
And virtual reality will help retailers as well as consumers. With technology like InContext Solutions, retailers can plan store layouts, visual merchandising plans and test their effectiveness with shoppers before implementing.
What virtual reality retail technology means for CRE
Once retailers use VR in their locations, depending on what they sell, they may be looking into smaller storefronts. VR for consumers to test products coupled with predictive analytics and better data on purchase patterns will help stores keep the appropriate amount of product in stock at all times. This means smaller stockrooms and showrooms for some retail locations.
Alternatively, retailers could be in the market for even larger storefronts to provide more room for customers to interact with experiential products––like sporting goods––via VR.
As a broker, you can take new retail technology considerations into account when making property recommendations. Staying up to date with the latest technology will be helpful in preparing your clients, and you’ll be on the cutting edge of market changes and consumer demand.
For CRE professionals, VR will change the way retail properties are sold to clients in the first place. VR property tours are already increasing in popularity, but as the technology becomes more affordable and advanced, every brokerage will be able to give tours of spaces specifically branded for potential buyers and investors.
Retail is undergoing a major shift, and many retailers seem to be in serious trouble. But VR is going to change the game. Our prediction is that out of the carnage will come opportunity. Technology is bringing new opportunities for brick-and-mortar, and experience-based retail will be king.
To learn more about how technology will affect retail, check out our resource: “Technology’s impact on retail: what CRE can expect.”