Should retailers be bullish about AR, VR AND THE METAVERSE

Posted on December 20, 2022 by Michael Benarroch
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Should retailers be bullish about AR, VR AND THE METAVERSE

Posted on December 20, 2022 by Michael Benarroch
 

Retailers are investing in digital experiences. Is this signalling the “future” of retail or a fun marketing ploy?

This year saw a flurry of activity in the cutting-edge Metaverse – no wonder everyone wanted to get in on it.

Think ‘Avatar’ IRL: a 3D online world where people can explore and interact with their cartoonish avatars; but instead of a James Cameron blockbuster film, for retailers, it was more like a land grab out of an old-timey Western.  

Retailers have been scrambling for their piece of this dynamic digital domain where users can create vibrant 3D avatars and interact in real-time.  

Which makes sense, because last spring/summer everyone was buzzing about it.

Now, Metaverse advocates claim that it represents a revolutionary opportunity for retailers. That it offers an unprecedented level of creative freedom to craft out-of-this-world experiences that can defy the laws of physics.

Supporters also suggest that the ultimate success for brands lies not only in physical domination but also within the digital realm. To them, mastering digital and social is just a stepping stone to conquering an even greater frontier – the Metaverse.

And so brands across multiple industries rushed to claim their spot in the Metaverse. With luxury fashion brands at the forefront, hoping to entice shoppers into the ever-evolving VR world.

PEOPLE WERE FEELING BULLISH

As digital and social continue to mature, many agree that immersive platforms like the Metaverse is the future.

After all, brands have been allocating more resources to creating interactive online experiences, from video game-like simulations to virtual reality shopping trips.

Just take a look at a few recent examples, noting that the following examples were NOT built in the Metaverse.

  • Gucci promoted a virtual handbag on the wildly successful gaming platform Roblox, selling it for $4,100 which is way above its physical price tag
  • Louis Vuitton created a virtual game to celebrate their founder’s 200th birthday. The game featured trivia and prizes intended to connect with young customers

WHAT WENT WRONG?

At the beginning of 2022, businesses buzzed with excitement over developing digital platforms and snapping up Metaverse property. However, as time went on, enthusiasm shifted to uneasiness about what was in store for the future.

Perhaps Futurists are more welcome in bull markets?

Regardless, headlines that once proclaimed that “retailers can’t afford to be out of touch” and “by the time the holiday shopping season rolls around, this new world will actually be here” have faced some harsh realities.

And it’s a story we’ve been told before. Do you remember 3D video? It was going to be the future. Or voice experiences with Amazon Alexa leading the way (which didn’t take off the way it was predicted to).  And now there’s the Metaverse.

What’s clear is that as technology evolves, a select few are out in front blazing the trail, well ahead of the game. And even though these trailblazers embrace new trends quickly, everyone else lags behind. 

So what’s the problem? The gap between those who are all in and those who frankly couldn’t care less is growing.  

There’s a divide between tech visionaries and everyone else.

Take a look at the results from this report out of the UK:


“While there’s undoubtedly a negative feeling towards the Metaverse, it appears this is massively tied up with confusion.

In Gowling WLG’s report, 41% of people in the UK said they don’t really understand the Metaverse.

While in YouGov’s, 43% of those in the UK have no awareness of the technology, and only 37% of respondents are confident in describing what it is.”*


Heck, even Meta’s own staff are questioning it.


“Meta staff are hitting out at Mark Zuckerberg in Blind reviews because they think his Metaverse obsession will ‘single-handedly kill’ the company.”*


So tech is cool, especially if the public is ready for it.

But this may all be a distraction for retailers. Because the truth is if retailers wanted to focus on customer experiences that actually drove sales, they would focus on the fundamentals.


5 WAYS TO IGNORE THE METAVERSE AND GET THE MOST OUT OF YOUR PHYSICAL SPACE

#1 – Focus on Visual Merchandising

It’s how smart retailers maximize sales.

  • Engage customers with pricing, shelf talkers, offers, and ambiance
  • Display your products properly
  • Promote features and make them easy to find
  • Keep to one of the five primary floor plans (straight, diagonal, angular, geometric, or mixed)
  • Group and display products by size and packaging
  • Consider how much of the product needs to be on the shelf to give the best ROI relative to cost per square footage (typically known as bin cap)
  • Learn how customers want to shop for certain types of product

A 2018 survey of Canadian shoppers showed that we find in-store displays boring.

Retail Insider reported that the results of the following key metrics were all shockingly low, even for leading national brands.  These metrics included:

  • Stopping Power – how likely is the shopper to stop and look at the display;
  • Strength of Offer – how appealing is the offer on the display;
  • Uniqueness – how unique is the display versus other displays in-store; and
  • Conversion Power – how likely is the shopper to purchase something from the display.

Remember that inspiration is everywhere. Sure, there’s your competition or other retailers, but consider what people are doing in food, beverage, entertainment, and hospitality…or look further afield to Europe and Asia to see what experiences can be imported into your store.

#2 – Avoid Making Things Look Drab

A 2018 survey of Canadian shoppers showed that we find in-store displays boring.

Retail Insider reported that the results of the following key metrics were all shockingly low, even for leading national brands. These metrics included:

  • Stopping Power – how likely is the shopper to stop and look at the display;
  • Strength of Offer – how appealing is the offer on the display;
  • Uniqueness – how unique is the display versus other displays in-store; and
  • Conversion Power – how likely is the shopper to purchase something from the display.

Remember that inspiration is everywhere. Sure, there’s your competition or other retailers, but consider what people are doing in food, beverage, entertainment, and hospitality…or look further afield to Europe and Asia to see what experiences can be imported into your store.

#3 – Make It Real

If you want your customers to visualize it, show them what things look like in the real world.

There’s a reason people go to Pinterest for inspiration, or flip through a catalogue, or play with online “building” tools to pick their next car, outfit, or paint colour.

Bring this experience to your retail store.

Selling housewares? Build a kitchen display to feature appliances and goods.

Selling live goods and plants? Design a new fixture to create the outdoor garden environment while also maximizing space, eyeliner, and product height/weight/size.

Selling hardware? Create a demo station where shoppers can try before they buy.

In the end:

  • One size fits all is never a suitable approach
  • Create a good flow that will not derail movement, so your customers can travel throughout the space without getting ‘stuck’ somewhere
  • Be aware of your store’s building architecture – ceiling heights, overall size, the location of entrances and exits
  • Decide if you’ll work with existing lighting or add and update
  • Your store has a story to tell, so keep it clean and concise — it should inform customers about your brand and your product offerings

#4 – Make Buying Easy

If you’re selling, they better be able to buy. So, make things easy for your customers.

First, make sure people can see it. This is about how you approach your planogram:

  • Spacing out products
  • Ensuring that goods don’t blend in, and most importantly
  • Featuring the right products at eye level

Second, consider your customers.  Are they older or younger? If so, mobility may be an issue. Are they in a rush or simply browsing? This will alter where you place key goods.

We recently wrote about how grocery store resets can increase impulse buys – sometimes you want to make things a little more challenging for your shoppers – but within reason.

#5 – Don’t Be Afraid To Make Some Products More Prominent Than Others

We’re here to sell more goods to more people at a higher profit. So naturally, we’ll need to feature some products over others. Lean into this by building feature displays for:

  • A change in season
  • A limited-time offer
  • A huge sale of overstocked products

Give up some of your floorplan for an eye-catching display with the right design, lighting, and goods – that will attract your customers’ attention.

Retailing is a science, so don’t be afraid to experiment

Keeping your shopping experience fresh takes time and effort. But there are things to consider – dos and don’ts – that will help you along the way as you continue to experiment with your space and determine what’s best for your brand and customers.

These are some things you can do:

  • Know what makes a great first impression with your customers
  • Utilize end caps and gondola shelves to promote impulse purchases and generate higher sales
  • Get to know your customers during their shopping experience, so you can engage with them better
  • Offer the right products that will establish loyalty with your customers
  • Label things correctly and make signage prominent – always!

And these are a few things that you shouldn’t do:

  • Don’t be messy – an aesthetically appealing space will resonate with customers
  • Don’t create a tight situation – aisles should be easily accessible
  • Don’t overcrowd your space with too many fixtures – customers will find it difficult to maneuver
  • Don’t make your space become stale – change it up once in a while
  • Don’t use too many styles of fixtures – this will confuse customers and most likely will not be a good reflection of your brand
  • Don’t create a retail space that’ll be a roadblock for customers – they will make an immediate decision on whether to continue into your store or leave quickly when they find it overwhelming


SHOULD YOU INVEST IN THE Metaverse OR YOUR BRICK-AND-MORTAR STORE?

We are all for technology – heck we’re the company that installed 4,800 digital menu boards to help a national coffee chain create a digital in-store experience – but there are times when technology outpaces consumer demand.

And at this point, very few people are asking for a Metaverse experience.

Of course, Ford famously didn’t sell “faster horses”, but he did spend decades building the infrastructure and customer demand. And while he was busy doing that, everyone else made money from horses.

So go all in on digital but pay attention to the fundamentals that go into an extraordinary in-store experience.

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If you need help with your next project, retail display, fixture, or environment, contact our team to get a project plan and quote.