Nitheesh NH
The adoption of VR technologies to improve the shopping experience is skyrocketing, particularly as brands and retailers look for new ways to engage with consumers online during the widespread shutdown of physical stores due to the coronavirus pandemic. Platform providers are reporting that they cannot keep up with demand, representing a stark difference to the recent past, when there was no critical use case for VR technologies and applications in retail outnumbered adoption rates.
In this report, we explore four use cases for experiential technology in retail and highlight the benefits of its adoption for both retailers and consumers.
1.Virtual Online Retail Stores—Higher E-Commerce Conversion Rates
Retailers and brands are incorporating reality technologies into their e-commerce stores to bring aspects of physical retail to online shopping. Where two-dimensional traditional websites are flat, consumers are able to “walk through” virtual stores to browse products in a three-dimensional experience. Brands can use background images, objects, colors and music to recreate brick-and-mortar retail and elevate the offering.
Obsess, an experiential e-commerce platform company, has recently seen retailers across a number of sectors—including apparel, accessories, beauty and luxury—express interest in establishing virtual stores. Neha Singh, CEO and Founder of Obsess, said that since the start of the coronavirus pandemic, the company has experienced a 300% increase in inbound inquiries, compared to the average from 2019. She added that Obsess is receiving requests regarding making retail stores shoppable online, rendering completely digital virtual stores in 3D, creating virtual showrooms for wholesale buyers and producing interactive virtual events—which brands were planning to host offline before coronavirus lockdowns were implemented. The company’s clients have included Christian Dior, Farfetch, Levi's, Tommy Hilfiger and Ulta Beauty. Across its portfolio, conversion rates on Obsess virtual platforms are up to 71% higher than non-virtual stores and product click-through rates are 20% higher, according to the company.
In February 2020, Obsess launched Christian Dior’s “Dior Maison” boutique, which provides a virtual experience of the brand’s flagship store on the Champs-Elysées in Paris, France. Shoppers can navigate through the store to discover products, including perfumes, bath products and candles. The virtual boutique uses imagery and sound to evoke the notes of each perfume, and consumers can access product details before purchasing through the platform.
[caption id="attachment_108959" align="aligncenter" width="700"]
Source: Dior.com[/caption]
Benefits: Virtual stores provide the opportunity for brands and retailers to communicate their image/positioning and promote products by connecting with consumers through rich, interactive content. VR recreates aspects of physical retail through the incorporation of music, window displays, mannequins and product merchandising, to offer a memorable, immersive shopping experience.
2. Digital Dressing Rooms and Virtual Try-on Fashion—Increased Consumer Engagement and Purchase Conversion Rates
Forma, a California-based virtual try-on technology company, has seen the number of new users of its app double week over week during the coronavirus pandemic, CEO and Co-Founder Benjamin Chiang told Coresight Research on April 23, 2020. The app enables consumers to “try on” thousands of fashion items by uploading a photo of themselves onto which apparel is digitally overlaid. Approximately 20% of the fashion items are available for sale, which shoppers can purchase by clicking through to the associated retail website. Chiang highlighted that consumer desire for fashion remains strong even though access to physical stores has been cut off due to the coronavirus pandemic: Users are spending 50% more time on the Forma app and trying on almost double as many outfits per user. Chiang likened the Forma platform to a “verticalized Pinterest” and described personal photos as one’s “evolving identity over time”—Forma’s solution helps consumers to find styles for each snapshot of one’s evolving visual identity.
[caption id="attachment_108961" align="aligncenter" width="600"]
Source: Forma’s virtual try-on technology[/caption]
Forma also offers a digital dressing room for retailers to integrate into their own websites. The company is currently collaborating with hundreds of companies on its merchant integration offering, including bridal companies Birdy Grey and Amsale. Digital dressing rooms can provide purchase-conversion lifts for apparel categories that are particularly difficult to try on, such as bridal dresses, swimsuits and men’s suits, or even categories that may not have “hanger appeal” but look better when seen on the body, such as slouchy sweaters, off-the-shoulder tops or fitted pants. Forma reported that it is seeing a 5–50% lift in purchase conversion rates across all categories, and that customers who try on products are five to 10 times more likely to make a purchase than those who do not try items on. The highest conversion increases are being realized for items with challenging silhouettes to try on (swimsuits) and those for which the customer does not have a frame of reference for purchase (bridal gowns).
During the coronavirus pandemic, “athleisure” and “plus-size” have comprised the most popular try-on categories in the Forma digital dressing room and via the Forma app, followed by “formal wear,” “bridal” and “swimwear.” The company said it is experiencing a high volume of inbound requests from retailers and brands seeking to create a digital dressing room experience for consumers, as the interactive experience helps consumers to visualize how a retailer’s product will look on their body type. Implementation of the digital dressing room add-on requires only product photos from a retailer’s website.
It is likely that digital dressing rooms will become a standard consumer expectation in the future: Chiang said, “If you don’t have a digital dressing room, it will be like not having a dressing room in your store.” Forma predicts that post coronavirus, digital engagement will moderate slightly but will still remain elevated. The company is launching an updated version of its technology later this year, which will feature a new retailer or brand theme each week to promote fashion products. This initiative will showcase retailers and brands and will also help Forma to gather data for demand forecasting.
Benefits: Virtual try-on and digital dressing rooms prompt shoppers to form connections with brands and products. The relationship becomes more realistic and tangible, and consumers are able to envision how a product may fit into their life; the decision tree for the path to purchase becomes more streamlined. This is a benefit for retailers—as it increases conversion rates—as well as consumers, because it takes much of the guesswork out of online purchasing and adds the interactive element of trying on a brand.
3. Interactive Gaming in Luxury Retail—Brand Immersion and Wider Reach to Consumers
Drest is an interactive fashion styling and gaming app that encourages users to style and shop content using digital models. Players become stylists in the game and take on daily fashion challenges. The gaming aspect of fashion is becoming increasingly popular and enables consumers to connect with clothes and accessories, coordinate and style products from multiple brands and to showcase their creative abilities to a wide audience. Avatars, or models, are a blank canvas for the consumer to style and have fun with new collections, creating looks with the click of a button.
[caption id="attachment_108962" align="aligncenter" width="700"]
Source: Drest.com[/caption]
The challenges are inspired by fashion news, and consumers complete them using real products from over 160 luxury brands that are recreated virtually—including from Drest partner Farfetch's website and directly from some brands’ websites. Drest announced a worldwide partnership with Gucci in October 2019, which debuted with a series of stylist challenges that relate to Gucci’s Fall/Winter 2019 collection. Gucci is the first Drest brand to feature a dedicated avatar, Unia Pakhomova, representing one of the brand’s key faces. The players submit their visual creations to win rewards—such as in-game currency as well as virtual fashion gifts—according to how well they have met the challenge brief and how other players have rated their looks, resulting in level unlocking and game progression. Consumers also able to purchase products directly from the brands and Farfetch.
Lisa Bridgett, Drest's Chief Operating Officer, explained to Coresight Research that the platform has seen increased activity month over month, with a 50% uplift in organic installs since many countries have entered some form of lockdown. “Our user base is more involved than ever. We have seen significantly more engagement and user feedback, reflecting the fact that users want to immerse in our world and are actively seeking inspirational and creative content during their downtime,” she stated.
[caption id="attachment_108963" align="aligncenter" width="300"]
Source: Drest app—Photoshoot Challenge[/caption]
Benefits: Gaming is an immersive platform that can be leveraged in retail to reach today’s and tomorrow’s consumers. Luxury brands’ partnerships with gaming platforms will help to build the perception that these brands are innovative, edgy and collaborative, in order to appeal to younger demographics. Digital interaction and engagement through gaming, challenges and virtual try-on are likely to remain elevated following the coronavirus pandemic, because consumer appetite for fashion styling seems to be growing, combined with increased interest in brand influencers.
4. Virtual Fashion Shows—Expanding Audience Reach and Facilitating E-Commerce
Due to the coronavirus crisis, designers and brands are unable to host live fashion shows to showcase new collections and so are instead turning to virtual events. This trend is altering the lens of fashion shows—from one of exclusion, where only a select few are able to attend, to one of mass viewership, where designers and brands are extending their reach.
Source: Dior.com[/caption]
Benefits: Virtual stores provide the opportunity for brands and retailers to communicate their image/positioning and promote products by connecting with consumers through rich, interactive content. VR recreates aspects of physical retail through the incorporation of music, window displays, mannequins and product merchandising, to offer a memorable, immersive shopping experience.
2. Digital Dressing Rooms and Virtual Try-on Fashion—Increased Consumer Engagement and Purchase Conversion Rates
Forma, a California-based virtual try-on technology company, has seen the number of new users of its app double week over week during the coronavirus pandemic, CEO and Co-Founder Benjamin Chiang told Coresight Research on April 23, 2020. The app enables consumers to “try on” thousands of fashion items by uploading a photo of themselves onto which apparel is digitally overlaid. Approximately 20% of the fashion items are available for sale, which shoppers can purchase by clicking through to the associated retail website. Chiang highlighted that consumer desire for fashion remains strong even though access to physical stores has been cut off due to the coronavirus pandemic: Users are spending 50% more time on the Forma app and trying on almost double as many outfits per user. Chiang likened the Forma platform to a “verticalized Pinterest” and described personal photos as one’s “evolving identity over time”—Forma’s solution helps consumers to find styles for each snapshot of one’s evolving visual identity.
[caption id="attachment_108961" align="aligncenter" width="600"] Source: Forma’s virtual try-on technology[/caption]
Forma also offers a digital dressing room for retailers to integrate into their own websites. The company is currently collaborating with hundreds of companies on its merchant integration offering, including bridal companies Birdy Grey and Amsale. Digital dressing rooms can provide purchase-conversion lifts for apparel categories that are particularly difficult to try on, such as bridal dresses, swimsuits and men’s suits, or even categories that may not have “hanger appeal” but look better when seen on the body, such as slouchy sweaters, off-the-shoulder tops or fitted pants. Forma reported that it is seeing a 5–50% lift in purchase conversion rates across all categories, and that customers who try on products are five to 10 times more likely to make a purchase than those who do not try items on. The highest conversion increases are being realized for items with challenging silhouettes to try on (swimsuits) and those for which the customer does not have a frame of reference for purchase (bridal gowns).
During the coronavirus pandemic, “athleisure” and “plus-size” have comprised the most popular try-on categories in the Forma digital dressing room and via the Forma app, followed by “formal wear,” “bridal” and “swimwear.” The company said it is experiencing a high volume of inbound requests from retailers and brands seeking to create a digital dressing room experience for consumers, as the interactive experience helps consumers to visualize how a retailer’s product will look on their body type. Implementation of the digital dressing room add-on requires only product photos from a retailer’s website.
It is likely that digital dressing rooms will become a standard consumer expectation in the future: Chiang said, “If you don’t have a digital dressing room, it will be like not having a dressing room in your store.” Forma predicts that post coronavirus, digital engagement will moderate slightly but will still remain elevated. The company is launching an updated version of its technology later this year, which will feature a new retailer or brand theme each week to promote fashion products. This initiative will showcase retailers and brands and will also help Forma to gather data for demand forecasting.
Benefits: Virtual try-on and digital dressing rooms prompt shoppers to form connections with brands and products. The relationship becomes more realistic and tangible, and consumers are able to envision how a product may fit into their life; the decision tree for the path to purchase becomes more streamlined. This is a benefit for retailers—as it increases conversion rates—as well as consumers, because it takes much of the guesswork out of online purchasing and adds the interactive element of trying on a brand.
3. Interactive Gaming in Luxury Retail—Brand Immersion and Wider Reach to Consumers
Drest is an interactive fashion styling and gaming app that encourages users to style and shop content using digital models. Players become stylists in the game and take on daily fashion challenges. The gaming aspect of fashion is becoming increasingly popular and enables consumers to connect with clothes and accessories, coordinate and style products from multiple brands and to showcase their creative abilities to a wide audience. Avatars, or models, are a blank canvas for the consumer to style and have fun with new collections, creating looks with the click of a button.
[caption id="attachment_108962" align="aligncenter" width="700"] Source: Drest.com[/caption]
The challenges are inspired by fashion news, and consumers complete them using real products from over 160 luxury brands that are recreated virtually—including from Drest partner Farfetch's website and directly from some brands’ websites. Drest announced a worldwide partnership with Gucci in October 2019, which debuted with a series of stylist challenges that relate to Gucci’s Fall/Winter 2019 collection. Gucci is the first Drest brand to feature a dedicated avatar, Unia Pakhomova, representing one of the brand’s key faces. The players submit their visual creations to win rewards—such as in-game currency as well as virtual fashion gifts—according to how well they have met the challenge brief and how other players have rated their looks, resulting in level unlocking and game progression. Consumers also able to purchase products directly from the brands and Farfetch.
Lisa Bridgett, Drest's Chief Operating Officer, explained to Coresight Research that the platform has seen increased activity month over month, with a 50% uplift in organic installs since many countries have entered some form of lockdown. “Our user base is more involved than ever. We have seen significantly more engagement and user feedback, reflecting the fact that users want to immerse in our world and are actively seeking inspirational and creative content during their downtime,” she stated.
[caption id="attachment_108963" align="aligncenter" width="300"] Source: Drest app—Photoshoot Challenge[/caption]
Benefits: Gaming is an immersive platform that can be leveraged in retail to reach today’s and tomorrow’s consumers. Luxury brands’ partnerships with gaming platforms will help to build the perception that these brands are innovative, edgy and collaborative, in order to appeal to younger demographics. Digital interaction and engagement through gaming, challenges and virtual try-on are likely to remain elevated following the coronavirus pandemic, because consumer appetite for fashion styling seems to be growing, combined with increased interest in brand influencers.
4. Virtual Fashion Shows—Expanding Audience Reach and Facilitating E-Commerce
Due to the coronavirus crisis, designers and brands are unable to host live fashion shows to showcase new collections and so are instead turning to virtual events. This trend is altering the lens of fashion shows—from one of exclusion, where only a select few are able to attend, to one of mass viewership, where designers and brands are extending their reach.
- Shanghai Fashion Week was broadcast online this year via livestreaming on Tmall, Alibaba’s e-commerce platform. It featured “see now, buy now” functionality to facilitate sales of runway items.
- PVH-owned Tommy Hilfiger is a pioneer in digital technology in fashion retail, having launched its Amsterdam Innovation Center in January 2015—a consolidated digital showroom where its clients are able to view the brand’s collection through 3D design. Daniel Grieder, Chief Executive Officer of Tommy HilfigerGlobal and PVH Europe, told WWD that the company is “looking into” the use of avatars instead of real models for virtual runway shows during the coronavirus pandemic and beyond, using AR, VR and mixed reality solutions.
Key Insights
- The virtual store experience has gone from nice-to-have to need-to-have. With consumers shopping at home for nearly all of their discretionary needs during the coronavirus pandemic, retailers and brands need to engage with consumers and differentiate themselves from the competition.
- VR stores mimic the physical retail experience for shoppers, offering brand immersion and increased conversion rates over traditional e-commerce websites.
- Virtual try-on technology is more important than ever before, as consumers are having to rely on online shopping during the coronavirus pandemic—digital dressing rooms reduce risk for shoppers and increase purchase conversion rates for retailers. Virtual try-on functionality is likely to become a standard expectation of consumers in the future.
- Gaming is an innovative means for fashion brands to stay relevant with younger consumers and to engage with shoppers through competitions and challenges.
- Fashion shows are moving online, enabling brands to showcase new collections to wider audiences than would be possible with live shows, as well incorporating e-commerce functionality.