Just over two years ago, nearly every industry was shaken to its core when the COVID-19 outbreak spread like wildfire across the globe. With people limiting their time outside of their homes, companies had to figure out new ways to engage with and sell to its customers.
COVID-19 represented a significant hurdle to the retail industry, which was already in the midst of a period of profound change as e-commerce steadily became the dominant business model.
Yet, while customers are growing accustomed to the convenience of e-commerce, there is still a demand to see, touch, and try out retail items before purchasing. Enter AR (augmented reality) and VR (virtual reality), which allow customers to virtually “try on” clothes while also minimizing physical contact with other people, and thereby mitigating the spread of the pandemic.
These technologies provide shoppers who are less comfortable with physical fitting rooms following the pandemic (65% of women and 54% of men indicated that they are not comfortable trying on clothes in brick-and-mortar store fitting rooms in a 2020 survey) a way to see what fits.
These innovative technologies known for their growing role in the entertainment and video gaming industries are being leveraged by retailers to allow customers the convenience of shopping from their homes in a safe and efficient way without losing the core functionality of the dressing room.
Retailers have been toying with utilizing these technologies before COVID-19. And by all accounts, AR/ VR will steadily become more commonplace options in the retail industry.
Even as the pandemic becomes more contained and manageable, retailers are continuing its investment in AR and VR fittings. The global fitting room market is expected to grow from $3 million in 2019 to over $6.5 million in 2025, a 13.4% increase.
It makes sense that AR/VR are on the rise. E-commerce and online shopping have changed the way customers shop. A recent Retail Dive study indicates that 62% of shoppers actually prefer shopping in stores, simply because they can try on items and ensure that the purchase fits them and their style sensibilities.
AR/VR Fitting Rooms as Revenue and Data Drivers
Beyond giving customers more freedom and options when shopping, AR/VR fitting rooms represent many other significant benefits for retailers.
From a financial perspective, clothing returns represent a significant financial burden for retailers. According to the National Retail Federation and Appriss Retail, $761 billion of merchandise (about 16.6% of the total merchandise sold by retailers) was returned to retailers by customers.
AR/VR fitting rooms help cut the amount of merchandise that is returned, as customers can be more certain about their purchases, negating the need to return ill-fitting items.
These fitting rooms also give retailers more insight into their customers. Data collection is a vital part of most modern marketing campaigns, allowing organizations to create direct, specific advertisements to potential customers based on their preferences.
Lastly, this new form of customer interaction can collect insights into what type of clothes and styles specific customers prefer. This not only allows retail organizations to market to customers, but it can also help them suggest potential purchases in the virtual fitting rooms based on customer choices and preferences. This represents the potential to increase customer loyalty–and thereby increase profits.
Additionally, new AR/VR systems can become significant drivers of data collection and productive data analysis through integration with 5G and fixed wireless solutions.
For example, T-Mobile works with businesses to integrate high-speed data solutions that allow for two-way, direct communication with the customer, communications that not only allow customers a deeper sense of connection with your brand, but spur greater data collection and consumer visibility for retailers seeking to personalize their offerings.
AR/VR systems often rely upon a significant level of reliable connectivity to function in the first place, so integrating these systems will be key.
Potential Roadblocks in Leveraging New VR/AR Tech
While the promise of AR/VR fitting rooms could help retail organizations reach new customers in an engaging new way, the technology is still very new. Organizations should take the time to choose and implement a solution carefully.
Leveraging an AR or VR fitting room in your organization can be a demanding option for your company’s IT landscape. Organizations must ensure that its data–on sizing, colors, and customer preferences to name a few examples–is updated and organized.
Additionally, to develop 3D renders of products, organizations must take accurate and crisp photos of its clothes which can then be used by AR and VR technology.
Companies need to also be aware that the success of these solutions is dependent on the devices its customers are using and the lighting in their homes—VR technology is not entirely mature and can be difficult to set up or produce accurate imaging and tracking in some home environments.
While AR and VR fitting rooms can help move merchandise, they can also be a liability if the technology isn’t leveraged in the right manner, particularly if that tech frustrates consumers.
When it comes to investing in AR and VR fitting rooms, organizations must make sure they have clear instructions for its customers on how they leverage the technology in addition to ensuring its IT landscape and data is ready to manage the burden of utilizing these technologies.
As the world attempts to move on from COVID-19, both the needs and desires of retail customers have shifted dramatically. Retailers must adopt new practices — and technologies — to satisfy these evolving expectations.
VR/AR technology represents an exciting, progressive way to engage with customers in the new Web3-based, omnichannel world. Not only do they allow retailers to meet customers where they are — enabling users to interact with products in new, interactive ways — but they also help retailers future-proof their operations and enable customer interactions in any environment.
T-Mobile has America’s largest, fastest, and most reliable 5G network, imagined for tomorrow but ready to give you an edge today. We are focused on providing retail businesses with the connectivity solutions and dedicated, exceptional service you need to keep you reliably connected in-store or on the move. For more on how T-Mobile for Business is elevating retail customer experiences, listen to this panel discussion with futurist and innovation expert Scott Amyx as he discusses the future of retail with industry experts, and what you must do to stay ahead.
Fastest: Based on median, overall combined 5G speeds according to analysis by Ookla® of Speedtest Intelligence® data 5G download speeds for Q3 2022. Most Reliable: According to independent third party umlaut from crowdsourced user experience data including task completion (Apr to Sept 2022). See 5G device, coverage, & access details at T-Mobile.com. 5G use cases are still emerging and new devices being created; see details on current 5G capabilities & services.