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Virtual and Augmented Reality Technology to Entirely Change the Retail Shopping Experience in Canada: Interview with ‘Retail Prophet’ Doug Stephens

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The digital age. It could be argued that its development began nearly three quarters of a century ago when Alan Turing created the Automatic Computing Engine – a digital computer with memory and the capacity to store information. And it’s commonly accepted that its progress was hastened by the Silicon Valley revolution of the 1980s which yielded such inventions as the Internet and laid the groundwork for the birth of mobile devices, social networks, big data, and computing clouds. However, it seems in many ways that we are only now truly beginning to enter the digital realm, realizing for the first time at least a small portion of technology’s potential and the ways in which its components and innovative applications can help support and enhance real human experiences. As retailers slowly climb out of the murk of the pandemic toward the reopening of communities and cities everywhere, they are increasingly looking toward modern digital solutions that can help differentiate their offering and improve engagement with consumers. It marks a new era of digital exploration for retailers. And, according to Doug Stephens, proficient industry analyst and Founder of the consultancy firm Retail Prophet, it also represents a starting point toward a new kind of retail reality.

“Within 10 years the practicality of physical retail as a primary means of distribution of product will have run its course,” he proffers. “Digital technology will allow for almost all of the functionality that consumers look for in physical stores, namely customer service, trial and almost immediate gratification through same-day and even same-hour shipping. This is probably common-sense masquerading as insight given what we already see shaping up in the market. Therefore, we won’t need physical stores anymore as a means of accessing products. However, that does not negate the value of stores as a media channel and I believe that’s precisely where their new value will lie. Physical, human and social experiences will be at a premium in a world where we’re all spending more of our lives online. Astute brands are already moving in this direction, treating their physical stores as a key media channel for the purpose of customer acquisition and measuring them accordingly.”

Approaching the ‘Metaverse’

Though the environment that Stephens describes may not come to full fruition for another decade or more, it’s one that he sees as an inevitability nonetheless, culminating in the creation and evolution of the ‘Metaverse’ – a term coined in Neal Stephenson’s 1992 science fiction novel ‘Snow Crash’ that’s used to help describe a parallel reality, consisting of and supported by a confluence of virtual worlds which people will be able to pass in and out of seamlessly. It’s a fascinating thesis which, enabled through the development of virtual and augmented reality technologies, is set to dramatically change the ways in which people live their lives and the means they leverage to engage with their favourite brands.

“The first shoe to drop is going to be that the old grid-based web experiences of today are going to give way to more immersive, intuitive and social shopping experiences,” explains Stephens. “Already, tech startups like Obsess are creating unique store environments that are redefining entirely the nature of digital shopping experiences. They also just raised $10M US in funding to accelerate those efforts. We’ll also see more and more brands adopting augmented reality to solve real consumer problems like the ability to try a product before buying it. All of these interim steps, however, are leading us toward a completely new internet. The ‘Metaverse’ represents a place in which people can engage in, commune in and of course shop in. The internet will cease to be something we use and become more like a place we spend a portion of our day living inside. We’ll even begin buying virtual products, clothing, jewelry and cosmetics inside the ‘Metaverse’ as increasing numbers of us begin communing, entertaining and working in the virtual world.”

Investment and consumer appetite

Indeed, if investment is an indicator that can be trusted, it seems the development of the ‘Metaverse’ is already well and truly underway. According to market research firm, Technavio, the virtual and augmented reality markets are set to explode, growing by $162.71 billion US and progressing at a compound annual growth rate of nearly 46 percent between 2021 and 2025. And, it’s investment that’s aligning nicely with current consumer sentiment around the desired use of these technologies in a retail setting. Recent data generated by Google – one of the largest players committed to the development of virtual and augmented reality technologies, along with other digital titans like Facebook, Microsoft and Samsung, to name a few – shows a penchant by today’s consumer to explore and understand the capabilities of the tools. The multinational tech giant says that global search interest in virtual reality continues to grow at a remarkable rate, while two-thirds (66%) of consumers surveyed say that they are interested in using augmented reality technology to help support their shopping experiences, with 6 in 10 stating that they want to be able to visualize where and how a product could fit into their lives. The data adds up to generate an image of what’s to come for retailing and the bold digital domain that we’re entering.

Refocussing and redefining purpose

Despite the anticipated advent of the ‘Metaverse’, however, and the possibilities that advancements in virtual and augmented reality technologies represent for the future of retailing, Stephens cautions those operating within the industry in their pursuit of acquiring and implementing such innovations. He recognizes the investments that are being made as well as those that will surely follow during the course of the next 6 to 18 months or so, but cites a retailers’ understanding of the value they offer to the consumer as the most important outcome of their current efforts. Then, and only then, can they begin crafting and honing the experiences they provide and the tools and solutions that they’ll leverage in order to support those experiences.

“It’s going to be essential for retailers to offer their customers something different and unique going forward,” he asserts. “The competitive environment coming out of the pandemic is going to be fierce. Amazon and other major global marketplaces have literally stoked their war chests into overdrive and are now building for a new era of their own evolution. In an effort to compete against them, large national retail players are building out third-party marketplaces, adding tens of thousands of new products and categories. In this environment, it’s going to be imperative that all other retailers refocus their brands with the aim of serving a very defined and clear purpose in the life of their customer. To begin, every brand needs to reflect on their offering and determine whether or not they provide their customer with a clear and definitive answer to a question in the market. Once they’ve established a renewed clarity of purpose, they’ll have to ensure that every nuance of the customer experience with their brand supports that purpose and positioning and brings it to life. Anything less and a retailer will become a sitting duck.”

He goes on to explain that once a brand has determined a clear understanding of their proposition to the customer, it can then begin to consider the exploration and implementation of technologies like virtual and augmented reality. However, he suggests strongly that any retailer seeking to do so should approach the task with the end-user at the heart of every decision it makes.

“The objective, always, should be to solve real consumer problems, alleviate points of friction and/or add experiential delight to every customer engagement,” he explains. “If a new consumer-facing technology doesn’t check any of these boxes then the brand should be questioning the investment. With that said, the only way a brand can determine a technology’s utility is to explore, experiment and test to understand where their application may add value.”

Current innovation and future state

Of course, there are already some within the industry that have been exploring the use of these technologies for some time in efforts to enhance the experience that they offer customers and create a more seamless engagement. Ikea for example is making excellent use of augmented reality to help consumers plan their decorating and design projects. Warby Parker is using the same technology to help redefine how consumers shop for eyeglasses. And personal care and beauty retailer Sephora has long offered its Virtual Artist tool that allows users to apply virtual makeup on themselves in real time using their smartphones to test the aesthetics of the product before making a purchase. And, although these tools have not yet been perfected by any means, they satisfy a need that the consumer has on their journey with the brands – a satisfaction that Stephens says is critical to provide, with or without the use of these technologies.

“It’s safe to say that as we move forward, we’ll see virtual and augmented reality play a greater role in shaping our online and in-store experiences,” he says. “But retailers have to be careful to not treat these technologies as novelties or frivolities. Instead, they have to begin by really digging into the design of their customer experiences and identifying aspects of the experience where AR for example can present a true solution or alleviate friction. The first step is to blow out your brand’s customer experience to truly understand every moment and micro-moment in the shopper’s journey. Some brands only possess a vague, superficial sense of their experiential architecture. Without understanding each micro-moment, where it takes place and the consumer’s need state, it’s impossible to make cogent decisions with respect to technology. Once that architecture is in place, however, a brand can then begin to examine it to find opportunities to introduce technology that can add value. Without an understanding of the value, effect or utility you’re attempting to deliver, every technology looks like a good idea, and attempts to implement could result in a waste of effort and resources for the retailer and a frustration for consumers.”

As investment continues to pour into the virtual and augmented reality markets, the savviest of retailers are heeding Stephens’ advice, seeking a clear understanding of the ways in which these modern technologies can help elevate their brands through enhanced engagement. And, given the overwhelming yearning for experiences that’s anticipated in a post-pandemic world, it’s likely that their understanding will be sought with force, ushering in a true digital age of innovation and creativity. It’s been a long time coming since Turing’s 1946 invention, to arrive at this precipice of technological transformation and the materialization of science-fiction premonition. And now that we’re here, the next logical destination with respect to virtual and augmented reality technologies and their use by humans is headlong into the future.

Article Author

Sean Tarry
Sean Tarry is an experienced writer who leverages his unique storytelling abilities to bring retail industry news and analysis to life. With 25 years of learning, including over a decade as Editor-In-Chief of Canadian Retailer magazine, he’s equipped with a deep understanding of the unique world of retail and the issues, trends, and innovators that continue to influence its evolution and shape its landscape.

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1 COMMENT

  1. If people will not be “shopping” in the old sense, as in socializing with their friends and relatives, as they browse the shelves and racks of the physical stores, what will they be doing? Will it increase the coffee shop/restaurant social scene? Or will we all get healthier in the gym together? Not a great social scene in the gym. Perhaps it will be similar to the Tupperware parties of years ago, come and see what I have had delivered to me today. Oh! the surprises.

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