The Big Players Are Moving into Virtual Reality — What Will It Really Mean for Commerce?
A few weeks ago, I attended the Shopify Unite conference in San Francisco. I saw with my own eyes how much of a community the eCommerce industry is, and I loved meeting the partners who build great stores and apps within the Shopify platform.
I was also fascinated by one thing in particular: the conference’s virtual reality display.
Including a VR display was a great touch — it shows that Shopify is keeping an eye out for important industry trends. The Shopify CEO, Tobi Lütke, is incredibly passionate about VR, and I have no doubt he’s positioning his company at the forefront of the coming vCommerce (virtual commerce) movement.
Tobi is right to see big potential in VR. I’m not alone in that opinion, either: Giants like Google, Amazon, Alibaba, and Facebook are getting into the market one after another. If VR hasn’t been on your radar thus far, take a closer look at the next big thing that will sweep the world. The VR wave is still a few years out, but it will arrive faster than we expect — so start preparing your business to thrive in a new, fascinating virtual landscape.
First things first: Virtual reality, augmented reality, and the difference between the two
You might already be familiar with virtual reality and its cousin, augmented reality. But in case you’re not, here’s a quick crash course.
Virtual reality (VR) is a three-dimensional, computer-generated environment that you can interact with. The point is to place you in a world where you feel separated from the “real” world, where you feel totally immersed in the experience being presented to you.
Just look at how everyone in this video reacts enthusiastically to everything they’re seeing in the virtual world even when they’re actually in front of a green screen:
Now, augmented reality (AR) is a little different. It takes a real-world environment and enhances your perception of your surroundings. For example, you might use augmented reality to see how furniture will look in your house:
See the difference? Essentially, VR aims to bring all of the user’s senses to another world or experience, while AR seeks to immerse the user in their current world.
VR and AR both have one thing in common, though: They’re both fascinating, and they both have the capacity to transform our lives for years to come.
VR and AR for online shopping is poised to become big — really big
Since I operate in the eCommerce space, I’m intrigued by the applications of VR and AR for online transactions.
The first question we might ask about vCommerce is: Do the consumers want it?
To me, the numbers point to “yes.” Here’s a statistic from WalkerSands Communications’ Reinventing Retail 2015 report:
More than a third of consumers (35 percent) say they would shop more online if they were able to try on a product virtually … and 63 percent said they expect it to impact their shopping experience in the future.
There’s more: Digi-Capital predicts the AR and VR market will hit $150 billion by 2020. (Hat tip to David Kariuki at Hypergrid Business for the statistics.) AR and VR will “grow new markets,” they say, and “cannibalize existing ones”.
If you’re skeptical or on the fence, I recommend giving vCommerce a second look. Brilliant new technologies have a habit of sneaking up on us, upending entire markets against the predictions of industry veterans. Many people predicted in 2007 that the iPhone would fail miserably; from our present-day vantage point, we know the iPhone revolutionized the cell phone industry and helped make smartphones ubiquitous.
Consumer demand seems to be growing for vCommerce, and the market seems to be ready for rapid growth. But will vCommerce replace eCommerce?
The short answer is: Probably not. Many industry observers think vCommerce will be incredibly useful but also believe vCommerce will operate alongside existing sales channels instead of immediately replacing them. vCommerce, they believe, will fit into an omnichannel user experience for online stores around the world — people will love VR for shopping, but they’ll also continue to shop through mobile devices, desktops, and brick-and-mortar stores.
Now, whether vCommerce will overtake eCommerce remains to be seen. Dan Virgillito wrote for Shopify that “it’s too early to make conclusions,” and I agree.
The one thing I can say now is vCommerce should definitely be on your radar and you should definitely start preparing for it. Check in on vCommerce news periodically and keep evaluating whether you need to upgrade your website for VR and AR. There’s a good chance we’ll all need to make improvements sooner than we think!
Current players in the VR/AR space
VR and AR are still nascent industries, so there aren’t many players in these spaces right now. However, forward-looking companies are angling for supremacy in the coming VR and AR landscapes.
I mentioned earlier that some of today’s giants are hopping into vCommerce. Alibaba is one such company — they’ve created a VR research lab called GnomeMagic Lab and recently invested in AR company Magic Leap at an eye-popping $4.5 billion valuation. Alibaba’s archnemesis Amazon, meanwhile, has indicated they want to introduce VR to Amazon Video (and I’m sure the always-innovative Jeff Bezos is thinking about VR/AR integration for online sales too).
Google has already made forays into AR with Google Glass, and they’re now making VR more accessible with the affordable Cardboard. (Google has shipped over 5 million Cardboard units, and users have downloaded more than a thousand Cardboard apps 25 million times.) Another tech giant, Facebook, acquired Oculus VR in 2014 and is demonstrating promising possibilities for immersive video and advertising capabilities.
There are, of course, newer players seeking to become the premier companies of the VR and AR age.
VRCommerce, for example, wants to become the Shopify of VR (how cool would it be to start your own VR store?). ShopperKraft is creating new features in 3D immersive shopping. And FaceCake has created technology that, as ABC describes it, “lets you try on virtual clothes before you buy.”
Many people would say VR and AR aren’t global phenomenons quite yet. But as the giants of today push the envelope with exciting technologies and startups find rapid success in VR and AR, I’ve no doubt other companies will start embracing the virtual realm.
What will VR and AR for online shopping look like?
This is where we can have some fun speculating how vCommerce will operate.
My friends at VRCommerce think vCommerce will mostly have customers enter special rooms or pop-up stores to buy products. Once putting on headsets, customers will enter virtual rooms with four walls, and then they can proceed to browse items in the virtual world.
I’d like to see consumers immersed in virtual locales related to what they’re buying. For example, say you want to buy yoga gear. It would be really fun if you could put on a headset and go to a virtual yoga studio to shop for your apparel and equipment.
Perhaps you could buy cycling gear while watching the Tour de France on TV — perhaps you’d be whisked away to a virtual store right next to the race itself. Or you’ll visit a model home virtually, during which time you can buy a couch you see that would look great in your own house. On the latter point, IKEA is already doing something in this realm: The company recently partnered with video game developer Valve to create a VR kitchen you can enter using the HTC Vive.
I believe VR and AR will transform experiences for consumers in online shopping, just like it will do so for gaming. vCommerce is a win-win for both store owners and consumers: The quick experience makes it really easy to make purchases, so retailers move product faster (and at higher volume) and customers don’t have to wait to buy their favorite items.
Possibilities for product placement abound as well; companies are already allowing customers to purchase real-life things in virtual worlds. Take the computer game EverQuest II, for example, where you can buy a meal from Pizza Hut in-game. On a related note, a great way to test vCommerce for product placement would be to put a buy button into a current video game (VR or not) and sell Amazon products that would be dropshipped to customers.
The possibilities for vCommerce are simply astounding. In time, I’m certain innovative companies will introduce new ways to shop online that will surprise everyone and delight consumers everywhere.
Nuts and bolts: Making purchases in vCommerce
Sure, we can dream about the possibilities with vCommerce, but at the end of the day we have to figure out how exactly vCommerce transactions will transpire.
Say you have a VR headset on and you’re shopping for items. How will you actually purchase the items and check out?
One possibility is using a sort of two-step process:
- First, you browse for your items on the VR headset, seeing how they’ll look on you/in your house/etc.
2. Then, you take off the headset and purchase the products on a different input system (like a tablet, computer, or mobile device).
I think we can do better. I’d love to see eye-tracking technology inside VR headsets that can help you make selections and purchase items seamlessly. Eye-tracking in VR is a growing trend, and it’ll be only a matter of time before we can use it for vCommerce.
Eye-tracking for vCommerce could work brilliantly. For example, there could be a buy button on the top-right of your headset screen. You’d look at the button, and the system will ask you to confirm your purchase. You’d flit your eyes to the “Yes” button, and just like that, your items will be on their way to you.
Retailers who reduce purchasing friction for their customers sell more. That has been true for a long time, and it’ll be true well into the future. Even with the magic of VR and AR, checkout needs to be completely frictionless (see: Amazon’s brilliant one-click ordering innovation), otherwise customers will drop off the sales funnel.
Luckily, VR and AR might allow us to create seamless sales processes for consumers. It would be incredibly helpful, for example, if we had virtual sales assistants to answer questions on the spot. The lack of on-hand sales assistants is a gaping weakness in eCommerce; how many times have you removed an item from your cart because you weren’t sure if a product was right for you? Virtual sales assistants can overcome objections and reiterate conversion-boosting policies like hassle-free returns to keep customers happy.
Overall, if we place everything consumers need right in front of their eyes — stunning visuals of merchandise, clear answers to questions, and easy checkout options, for example — online stores everywhere can enter the coveted realm of sky-high conversions.
Spinoffs for the VR industry
Whenever a huge industry is created, there’s bound to be a spinoff industry that accompanies it. One example is the smartphone market, which spawned the smartphone accessory market (including phone cases, screen protectors, apps… and yes, even selfie sticks).
Since the vCommerce market is poised to grow so large, there’s bound to be a need for services that will streamline vCommerce operations.
For a present-day parallel, just take a look at all of the services that support eCommerce:
- If you want to create an online store, you can use services like Shopify, Squarespace, Bigcommerce, and Big Cartel.
- There are lots of services that integrate eCommerce with social media, like Soldsie and Like2Buy.
- You can get editing for product photos from services like my company, Pixc.
- If you need designs created for your website, you can use ThemeForest for a store theme or 99Designs for a logo.
- Other services abound. You can use Sellbrite for a multi-channel listing service, for example, and you can use PayPal and Stripe for payment gateways.
When the vCommerce market hits it big, we’ll see an upswing in the same types of auxiliary services, just adapted for the virtual and augmented spheres.
For one, services like Shopify and Bigcommerce will need to start offering vCommerce store builders. While they’re creating new options for their customers, they’ll undoubtedly face new competition in the space from companies like VRCommerce.
We’ll need services to transform all of the 2D content we have now into 3D content (here’s looking at existing 2D-to-3D companies like 3Defy and ZVerse). And we’ll need music companies, design companies, content companies, distribution platforms, and design platforms (companies like LucidCam, EEVO, and Koncept VR) that will allow us to create immersive experiences in VR and AR.
In time, forthcoming VR and AR content creation methods will bring increasingly immersive experiences to consumers and business owners alike. Sounds exciting, doesn’t it?
Start preparing your business for VR and AR
We all know it’s dangerous to get complacent, especially in the world of business. There are always innovations around the corner just waiting to take the planet by storm.
Virtual reality and augmented reality are great examples. They’ll revolutionize gaming and online shopping as we know it, and there’s a good chance they’ll reshape other industries as well.
Although it’s a little while away, start thinking how you will incorporate VR/AR into your business for the upcoming movement — then watch as the industry astounds you. What will we see next in VR and AR? It’s anybody guess. But the innovations will captivate us and transform our lives for years to come. I, for one, can’t wait to see what’s coming.
