Why AR and VR Have Been Unable to Gain Popularity in the Retail Industry?

Published on 20 Apr, 2021

New age technologies such as augmented reality (AR) and virtual reality (VR) have gained prominence in the gaming industry. However, their full potential remains unexplored in other industries. One such industry is retail that has scratched the surface of this technology and is reaping its benefits. Will AR and VR be able to overcome the challenges related to their implementation and become the future of retail?

Technologies such as augmented reality (AR) and virtual reality (VR) are being extensively used in the gaming industry. They have a broad scope and are witnessing selected adoption in sectors such as automotive, manufacturing, and retail as well. As per a recent report by Goldman Sachs, the AR/VR software revenue is estimated to reach USD1.6 billion by 2025 which reflects the increased penetration of these technologies. However, developing these technologies is both time-consuming and requires intense efforts as models of a physical product need to be designed.

As the name suggests, AR layers digital information onto the real-world scenario, thereby “augmenting” real life. On the other hand, VR gives a complete immersive experience, allowing the consumer to enter another world altogether.

AR and VR technologies have immense scope in both online and offline retail. Some retail sections have already started using them, but their adoption is still fairly low and many facets of the technologies remain unexplored.

  • Cosmetics – The cosmetic industry has immensely benefitted from the AR technology, and AR is being extensively used in both online and offline stores. In online retail, customers only need to click on or choose the shade of lipstick or eyeshadow they want, and by using AR, they can check whether it will suit them. This technology is being tested in offline stores as well using AR devices. Furthermore, the technology can allow customers to make their own shades by mixing and matching colors.
  • Fashion – Virtual try-ons can easily replace the changing rooms of fashion outlets. One of the amazing features of VR is that a customer can wear a “head mount" (an easy-to-handle device), choose a model with similar body dimensions, and check the product on the model who tries it out for them. This concept can be used in both online and offline retail models; accordingly, the decision-making time can be reduced. It can also help brands downsize store staff.
  • Departmental stores – Departmental stores can leverage these technologies to help customers see the complete details of the products they want to buy. Using the AR app, a customer can check the various details such as ingredients or cost of any product without picking it off the shelf.
  • Automobiles – Automobile showrooms can use AR to digitally exhibit all variants of a car model, without actually presenting the car. It is an ideal solution for showrooms which have limited space and facilitates quick decision-making.
  • Furniture – AR and VR configurators are making waves in this segment already. Using VR, customers can virtually design their rooms or even full apartments with furniture and hardware. They can scan the environment in real time and check how any furniture would fit in before actually buying it. Many online furniture brands have successfully integrated this technology into their online retail stores.

The aforementioned examples illustrate the technologies that are being used currently and the ways to further leverage them. Although some sectors have embraced them, their wide-scale adoption is yet to be witnessed.

Some roadblocks obstructing the penetration of AR and VR are given below.

  • Challenges to develop, edit, and reproduce AR/VR content: The skills, hardware, and software required to develop, reproduce, and display AR/VR content are quite different and not easily available.
    • Hardware and software availability: Today, several smart phones devices are enabled to develop and reproduce AR content which allows consumers to access this technology more easily. On the other hand, VR requires specially configured devices which are costly, making investments necessary for both content developers and consumers. Many retailers are unable to afford the high set-up cost.
    • Skills of 3D design content – The biggest challenge faced by AR and VR is the dearth of expertise required to design good content. Content development is challenging and the skill set needed is scarce. Moreover, the process is expensive and time-consuming. Furthermore, the design must be fool proof and must not cause side effects such as eye strain and sound disorientation.
    • Convenience to reproduce content – VR is available to consumers only on select devices such as HTC Vive, Sony PlayStation VR, and Samsung Gear VR. It serves a niche market and is not mainstream. Buyers’ options for buying VR devices are limited. They have to find an option which is user-friendly and affordable in the available range. Furthermore, not all VR devices in the marketplace are able to offer the immersive experience a user expects. Hence, this could mar the retail experience of a potential customer.
  • Speedy Internet connection – To connect to AR or VR via smart phone devices, customers need a relatively fast Internet connection such as 5G which is still in the rollout stage in many countries. Having a slow connection can mar the user experience. Therefore, it is pointless for an online retail platform to integrate these technologies if customers cannot use them.

Therefore, one of the main barriers to the mass adoption of AR and VR in the retail industry is their high set-up cost. The cost of development of AR/VR content for online retail is steep and the process is tedious. To set up these technologies offline, businesses need to buy headsets and motion controllers that are comfortable for customers and easy to use for the staff. The cost of the equipment is high and also their upkeep and maintenance is expensive.

Earlier, video media content was scarce and its creation was expensive and cumbersome. However, with the easy availability of HD camera-embedded smart phones, and content producing and editing software (TikTok, Instagram), the market is being flooded with such content. Making AR and VR content development, editing, processing, and reproduction easy for unskilled users would further drive the popularity of the two technologies.