Living rooms in 3D, interactive store-fronts or even virtual downhill ski slopes – by tapping into the new virtual reality technologies, brick-and-mortar retail is creating unique worlds of experience for its customers. Current concepts demonstrate how diversely the digital worlds can be integrated into the purchasing process.
Skiers who race down the steep track at the ISPO Munich 2017 sports fair can ditch the crash helmets. And instead of ski goggles to protect them from the sun and snow outside, these winter athletes sport a pair of dark data glasses. Using these, visitors plunge into a virtual winter landscape of 40,000 square metres, where they interact with hundreds of avatars in real time. This artificial world of experience was conjured up by the clothing company Bogner in Hall B1 of the Munich Trade Fair in February 2017. The technology required for this, called HolodeckVR, comes from the Fraunhofer Institute for Integrated Circuits (IIS).
Experiencing virtual reality together
HolodeckVR uses a variety of high-precision localisation technologies – such as the real-time trackers, which are wirelessly connected to the virtual reality glasses to enable the user to move freely in the virtual world. In the process, HolodeckVR has fixed a few old teething troubles of this technology. “Apart from the lack of content for the general public, the main problem in virtual reality is that you cannot share the experience with others, that you are bound to your location and that some people experience nausea from the movement”, explains Stephan Otto, project manager at the Fraunhofer IIS. The HolodeckVR offers “unique and completely new solutions” for all these glitches. Content partners such as Bogner, who previously used to shoot skiing stunts for the James Bond films on the side, then add exciting experiences to the mix.
Whereas virtual reality used to be a solitary, motionless experience, according to Otto, several people can now move freely and simultaneously in a space that covers an area the size of four football pitches and interact with over a hundred other users who are displayed as avatars.
What the visitors experienced as a big thrill represents a giant step towards digitisation for sports retailers. The objective of the Fraunhofer project is widespread marketing of HolodeckVR technology through its own spin-off company.
Furniture showroom: compare products by time of day
Using highly sophisticated glasses, IKEA customers now also move around in the “Virtual Home Experience”. In this pilot project in Berlin-Lichtenberg, visitors can put together their own furniture in different variants. Materials, textures and wall colours can be selected. And by changing the time of day, they can compare the products in different lighting moods.
Digital worlds of experience give brick-and-mortar retailers the opportunity to win new customers, to attract them into their stores more often and to give them a special shopping experience. This does not always have to involve creating entire worlds. You can also dial it down a notch: one example is the virtual fitting room in the display window of a store. This is the area of specialisation of Mesut Yilmaz, managing director of Magic Schaufenster in Herne.
A magic mirror to stop passers-by in their tracks
“It really is a new advertising medium. There used to be magazines, posters, the Internet, etc. Now you have augmented reality at your disposal, and that creates a host of opportunities to boost the success of your business”, says Yilmaz. Augmented reality provides customers with real-time computer-generated information to complement their real-world perceptions. While it is clear that this will not replace Internet advertising, you could still “achieve great results from combining Internet advertising with augmented reality advertising”.
The “magic mirror” consists of a camera, a screen behind the display window and a software program. People walking past the display window can choose their clothes on the screen by means of gesture control. The monitor becomes a mirror, in front of which the viewer can try on sweaters, shirts or jackets.
“What looks like pure window shopping fun after work offers retailers new ways of attracting the attention of passers-by”, says Yilmaz. Like an online shop, brick-and-mortar stores can present their offers and services around the clock. And with the help of the software, they receive valuable information about the behaviour and wishes of their customers.
Online stores are still miles ahead
In this regard, webshops still have an edge on it. They know exactly where a visitor clicked, which products their customers have bought in the past, which promotions they respond to and what other products they look for. Thanks to sophisticated algorithms, modern sales systems can suggest personalised products that they might like.
The open-commerce concept of the online shop About You, which launched in May 2014 and is part of the fashion start-up Collins, takes this one step further. This concept combines a technology and business platform with a connected ecosystem. This means that retailers offer their products on About You and software partners develop their own apps for the online shop, while fashion bloggers set up profiles and put together personal product recommendations from the product range for their predominantly young followers. When you enter the shopping worlds of About You, you are inspired and entertained, you set yourself up there and are happy to return. “Our customers remain loyal to us – this we can see, from our above-average repeat purchase rate”, says Collins founder and CEO Benjamin Otto. “Mission Inspiration is successful”. Collins attracted more than half a million active customers in its first year in the core target age group of between 20 and 40, consisting 80% of women and 20% of men.
Recognise faces, analyse desires
How can retailers get to know their customers better and provide them with interesting offers at their POS? After all, experience has shown that it is there that 70% to 80% of purchasing decisions are made. Many businesses solve this challenge with online terminals and large displays. In the case of the physical branch of the online shop myToys in the new “Perle Hamburg” shopping centre, which offers a combination of gastronomy and retail, customers can browse a PC and order products that are currently not in stock (“Click & Collect”). myToys, which currently has 16 retail shops, is one of the pioneers in multichannel retailing.
“Brick-and-mortar retail is a very important strategic component for us. Accordingly, we plan to open about two new branches every year”, says myToys founder and CEO Dr. Oliver Lederle. “Our retail stores are adding a lot of value to the myToys brand. Furthermore, our online business grows in leaps and bounds wherever we have a retail branch”.
In the age of digitisation, the next step is to connect displays with smart solutions that evaluate customer behaviour via optical sensors. One such solution was developed by Fraunhofer IIS, with its streaming analytics platform called AVARD (Anonymous Video Analytics for Retail and Digital Signage). One of its licence holders is the market research data supplier Pyramics.
Facial recognition software is what lies at the heart of this system. It recognises age, gender and facial expression in real time and analyses this information anonymously. It also recognises how many customers stop for how long before which product, or which area does not attract that many visitors. If more men enter the shop, the digital billboards display deals in the electronics department.
In addition to tailor-made advertising on the screens, retailers can also use the information they have gained to offer their customers added value and to display useful tips on the items they are looking for on the screens, or installation and care instructions. This boosts sales and improves customer loyalty.