As digital commerce continues to dominate the market and the influence of traditional high-street retail has lessened, it’s clear that consumer behaviours and shopping expectations have profoundly changed.
Revenue in global e-commerce is expected to reach $4.32 trillion this year, showing a compound annual growth rate (CAGR) of 8.02%. This suggests that the market will be worth $5.89 trillion by 2029, and the number of users is expected to hit 3.6 billion, which equates to nearly half of the total population of the planet.
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E-commerce continues to be shaped and influenced by the emergence of cutting-edge technology, leaving physical retailers with a wealth of challenges ahead. How can physical retailers expect to match what market e-commerce leaders are offering in terms of product availability, immersive experiences, personalised recommendations, convenience, and easy online shopping processes? The solution lies in how retailers can adapt to this trend by harnessing the technologies that, in no uncertain terms, bridge the digital-physical divide.
Three technologies that stick out are 3D modelling, virtual reality (VR) and artificial intelligence (AI), and using them in innovative ways to create engaging, personalised, and immersive simulations that showcase products.
These game-changing and lucrative technologies are being heavily invested in, and have found themselves entrenched in industries beyond entertainment, tech, and niche sectors. For example, immersive golf simulators from specialists like Golf Swing Systems, while being a significant investment, integrate VR and AI technologies to create full systems that can now be installed in homes. Rather than being exclusively confined to professional golf training academies and professional commercial environments, this is just an example where highly sophisticated technology and solutions become increasingly accessible to everyday consumers.
So how can retailers successfully give themselves an edge in a competitive, cutthroat industry where time is of the essence, first impressions count for everything and with so many variables influencing purchase decisions? It comes down to understanding the modern shopper experience.
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By GlobalDataWhat Do We Mean By Customer Experience?
The customer experience encompasses every interaction that they have with a retail or e-commerce brand, from the initial product discovery stage to the final purchase and beyond.
In a brick-and-mortar retail store context, that moment begins when they set foot into the premises. Various elements to consider in their ‘journey’ (however long it may be) are the store’s layout, ease of product accessibility, store staff helpfulness, checkout efficiency, payment options, and post-purchase processes like returns, exchanges, feedback, and further discounts. These ‘touchpoints’ all contribute to their perception of the brand, and influence customer satisfaction and loyalty.
In an e-commerce context, the experience will involve using a variety of channels (search engine, social media post share, news article, and so on) to discover a brand or specific product. The user may likely peruse different websites, product pages, elements like technical info tables, product photos, and customer reviews for ‘proof’ that their prospective purchase will meet their needs, before either abandoning or committing to the purchase. Post-purchase options may include confirmation emails, future discount codes, and loyalty schemes.
The expectations of customers throughout their journey vary, but the statistics tell a sobering story. According to Harvard Business Review, customers who have had a positive experience spend 140% more than those who haven’t. There is an abundance of research that suggests how overall experience influences purchasing decisions, and that many consumers are willing to pay more for a superior experience.
Bridging the Gap: From Discovery-to-Purchase
Standard retail faces a big challenge around one key touchpoint in this invisible and malleable customer journey: the stage that sits between discovery and purchase.
As customers regularly research products online before committing to buying them (regardless of platform), a common pain point is visualising how they will work in their specific environment or context. As a result, friction here can derail or delay purchases.
Incorporating 3D, VR, or AI retail simulations here can not only improve the experience but also help customers achieve their goals. Ostensibly creating a virtual environment where customers can interact with products in realistic contexts. When implemented correctly, retailers can test and optimise every aspect of the customer journey to foster greater all-round satisfaction and conversion rates, as well as refine their products for the future.
Examples of VR, AI and 3D Simulations in Retail
The applications of these technologies in retail dramatically vary from sector to sector.
- VR platforms can help brands create detailed 3D models of their stores and products, so they can plan or adjust layouts, displays, product arrangements, aisles, or other statement features digitally before they’re physically changed. This allows retailers to optimise experiences that draw customers in and encourage exploration of more products.
- The same technology is especially useful for complex buyer journeys with long sales cycles, such as in kitchen or bathroom design. Engaging with customers in-store after confirming products in a showroom, a detailed 3D render and visualisation with VR features that show their new room will help bridge this gap substantially. The same technology can be deployed when expanding or reconfiguring the showrooms themselves.
- Retail teams can also create and stream virtual walkthroughs of their stores where they can experiment with new assortments, signage, and displays in detailed formats. This helps when planning for seasonal revamps where new layouts can be adjusted to make way for priority lines, marketing products and visual merchandising.
- AI can be deployed to any incumbent stock management, CRM and order processing system, where predictive analytics can help retailers automate many aspects of their operations, from product backline orders and warehouse requests to slowly depleting lines and inventory adjustments. The same tech can be used to streamline administrative tasks, bookkeeping, customer service enquiries, and more.
Major global retailers have already begun embracing these technologies at scale, from Walmart’s AI solution (Retina) that creates 3D assets and sophisticated immersive automation APIs to Dunelm’s Google Cloud-led genAI technology that is designed to enhance product discovery. As such, the retailers that can afford to invest in this technology, but are unwilling to embrace it, risk falling exponentially behind.
AI, in particular, is proving very adept at understanding and anticipating future customer needs and making personalised recommendations that help companies introduce new products to market, in turn proving more effective than standard merchandising displays.
That said, an underlying concern rests with the smaller, independent retailers who are just trying to stay afloat in an industry so reliant on competition and fast decision-making. While competition with market powerhouses is unrealistic, the aim is to start small and harness them where possible for maximum effect.
Retailers can trust their derived insights to make informed decisions that translate into successful in-store strategies and improved shopper experiences.
What’s Next?
As we move forward, the integration of AI with virtual and augmented reality will only become more pronounced, with shopping experiences likely to become even more immersive. The future promises exceptionally personalised experiences, efficient supply chains, and smarter in-store and online interactions. Predictive analytics will become more accurate and less rudimentary, more processes will be automated, and technology will integrate even deeper with human intuition and decision-making.
The integration of 3D, VR and AI in retail promises to reshape the entire customer experience altogether. As such, the retailers who embrace these simulation technologies, as opposed to rejecting them, will be in a solid position to meet customer expectations, which are evolving almost as quickly as the tech itself.
About the author: Annie Button is a freelance writer based in the UK. She specialises in business development, sustainability, digital trends, marketing, and HR.
