Virtual Reality changes Retail

A declaration of war and its consequences

It was like a declaration of war. Five years ago, the online retailer Amazon decided to enter the food market - and threatened to become a serious competitor in food sales as well. Amazon can draw on comprehensive shopping and logistics know-how and delivers goods directly to your doorstep.

Admittedly, the major revolution has not taken place yet: according to the Online Monitor 2018 of the Handelsverband Deutschland (HDE), e-commerce accounted for just 1.1 percent of food sales in Germany in 2017; and 90 percent of goods overall are still sold via store-based retail. Nonetheless, the disruptive developments in online retail do not stop at the shop door. They have changed customers' expectations. They want everything to be available at all times and want their interaction with store-based retail to be a special experience.

Expanding the reality of today’s customers

In order to meet this new customer need, store-based retailers are taking advantage of digitisation. Their ultimate goal is to enhance the in-store shopping experience. In addition to linking digital and stationary offerings, some retailers are also turning to augmented reality (AR). This supplements customers'existing visual perception with digital information and thus creates a "mixed reality" - for example, by using three-dimensional product representations. Building on this idea, Lego has developed a "Digital Box" for its stores, which visualises the contents of each Lego package in a 3D animation. Media Markt offers an app with which individual products can be displayed as 3D holograms on a smartphone screen. Other retailers are also already expanding beyond their own retail space: they now offer customers the chance to immerse themselves in virtual reality (VR). The outdoor clothing specialist North Face, for example, lets customers experience a dog sled race using VR headsets and the accessory retailer Uniqlo saves them the trouble of changing clothes thanks to a "Magic Mirror".

Customers plan their own store

METRO is pursuing a completely new approach with its Compact Stores in France. With a relatively small area of up to 1,500 square meters, they are primarily intended to serve customers from the hotel, restaurant and catering (HoReCa) sector in rural areas. In order to achieve this, the company is relying on the support of the customers themselves: with the help of VR tools, they can help shape the store.

Isabel Rudolf-Staubach is one of those responsible for the project. "For the first store, which opened its doors in 2017, we set up a virtual store together with a specialist agency. Our French colleagues added all the information about the product range." Afterwards, a representative group of 25 French customers - from bakers to restaurant owners, from butchers to hoteliers - went shopping there for a week. Interviews followed. "We used the feedback to align the concept even better with customer needs. We also evaluated heat maps that show where customers went most often in virtual reality or to identify points where there are problems."

Following the analysis, the first store was opened in Alés. Today, it stands for what Metro wants to offer its customers: individuality and never having to say no to them again.

VR concepts like these are just the beginning. According to estimates, the market for virtual reality in 2020 will be worth around 70 million US dollars. Digitisation will continue to change the face of the retail sector. And it seems a safe bet that VR will be used to strengthen the traditionally good relationships with customers.