Augmented and Virtual Reality, indistinguishable from the real thing
Impact on consumer products companies is enormous
I was out shopping with my family a while back and one of the store fronts had a sign that read “To look, compare and buy, you need to be in a real shop”. The question here of course is, what is a 'real’ shop? I recently experienced a demonstration of Virtual Reality (VR) glasses that take you to a virtual shop, where, as a customer, you are perfectly served based on your purchase history and personal preferences (background music, colour/style, size, for example). It felt like a ‘real’ customer experience in a not so real shop. The use of Virtual Reality (VR)/Augmented Reality (AR) technology is just one example of the technological trends that affect consumer products company operations. But what do we mean by VR/AR technology and what influence does it have on consumer products companies?
Michiel van den Heuvel - 28 September 2016
The world as a digital playground
Let me start by first making the distinction clear between VR and AR. When we talk about VR, we mean the technology that immerses the user (consumer) fully into different, virtual surroundings. These surroundings can be a virtual representation of a real environment or totally fictitious. The experience the user feels in this environment is sometimes so intense, that the emotions and feelings in the virtual context are equal to those we all know from the real world. Even the most ‘low-tech’ VR glasses like Google Cardboard can have you at the edge of your seat when you get into the virtual roller coaster.
AR on the other hand, places virtual objects in the physical world around us and allows users to interact with these objects. A fantastic example of the power that comes from mixing the virtual with the physical is the Pokémon GO app, which has a huge group of followers from all over the world.
The business case for consumer products companies
Although some of the applications of VR and AR still seem futuristic, the impact of this technology on consumer products organisations is enormous. By offering consumers VR and AR technology, producers have the means to shorten the customer journey and seduce consumers to make a purchase more quickly.
AR, for example, makes it possible to instantly see how a piece of furniture will look in your living room. If it’s too big or the colour is not quite what you were expecting, you can change the size and colour in ‘real time’ and immediately place your order. All of this without leaving your house. The experience in ‘real’ shops will also change because of AR. Think of examples in fashion and apparel, where ‘clever’ mirrors in the changing rooms offer you matching combinations while trying things on. Another good example is the producer of alcoholic drinks who, using an AR app, lets customers scan a bottle and start an interactive video explaining the sustainable way in which the ingredients for the product are made.
By actively influencing customers when and where they are deciding whether to buy and/or where they are using the goods, we see unique customer experiences arise. Marketers and communications specialist can successfully use VR and AR to strengthen the emotional relationship with the brand. Harvard Business Review¹ data analysis shows that consumers with a strong brand loyalty are 52 percent more valuable for a company than very satisfied customers.
Starting to use VR/AR
There are certainly enough inspiring examples out there. But where and how do you start up an AR/VR project? The market offers several technological platforms that provide the basic architecture. It is up to the consumer products companies themselves to try out different technologies and concepts as pilots. These limited investment pilots must have clearly defined objectives and, above all, be aimed at contributing to an improved customer experience.
Define simple project KPIs that link the outcomes of the project to actual company goals and use the pilots mainly to test and learn what works. Let the teams work according to proven lean start-up principles, which focus on launching a Minimum Viable Product (MVP) and validating and testing the results with a select group of consumers. The tests provide valuable feedback, which can be used in next iterations of the product.
It is important to actively involve the IT organisation. Too often such initiatives are started by a small group without involving the IT organisation, leading to inefficiencies in knowledge and experience once the MVPs and pilots have proven themselves and the projects and stakes get bigger. If you also make it fun and exciting for the organisation to work on the pilots, you are well on your way to your first ‘real’ VR/AR success!
Tech Trends 2016: Consumer products industry
In ‘Deloitte Tech Trends 2016: Consumer Products Industry’, practical case studies and tips for implementation take you through five technological trends that are likely to disrupt consumer products businesses in the next 18 to 24 months.
Download the Tech Trends 2016: Consumer products industry report and read more about:
- Right-speed IT in the consumer products industry
- Internet of Things: From sensing to doing
- Reimagining core systems
- Industrialised analytics
- Augmented and Virtual Reality are already here
¹ Scott Magids, Alan Zorfas, and Daniel Leemon, “The new science of customer emotions,” Harvard Business Review, November 2015, https://hbr.org/2015/11/the-new-science-of-customer-emotions, accessed February 29, 2016.
More information on Virtual and Augmented Reality?
Do you want to know more on Virtual and Augmented Reality? Please contact Michiel van den Heuvel at +31 (0)88 288 4542.