Augmented Reality (AR), according to the dictionary is “a technology that superimposes a computer-generated image on a user’s view of the real world, thus providing a composite view.”, while virtual reality (VR) is “a computer-generated simulation of a three-dimensional image or environment that can be interacted with in a seemingly real or physical way by a person using special electronic equipment, such as a helmet with a screen inside or gloves fitted with sensors.” We could think of it as below:
For the retail world, both Augmented Reality and Virtual Reality are going to be revolutionary in two ways. Augmented Reality is revolutionary for the consumer, while Virtual Reality will be revolutionary for the
For the retail business, Virtual Reality will be a deal breaker and a source of innovation. I have been in the forefront of retail growth strategies and I have had my fair share of how complicated and expensive it is to design a store. Virtual Reality is here to help. With Virtual Reality applications, companies are now more than ever provided with the opportunity to design stores and test them before the expensive investment is made and things are much harder to change. More so, with Virtual Reality, companies are now able to recreate heatmaps (like the one below) to determine what are the shopper’s decisions, based on the virtual reality heatmaps. This will be useful in evaluating shopper behavior and testing new formats and concepts before deploying them in real life. As someone who has been involved in these aspects in retail this will generate tons of insight for any company who chooses to invest in this technology
Now when we look into the other key stakeholder in retail, the consumer augmented reality will be the gamechanger for them. One of the main inconvenient with furniture retailers as well as appliance retailers (especially in the brick and mortar world) had to invest large sums of money to have an immense selling space as well as an immense amount of working capital to maintain such a large inventory. Such is the case for companies such as Ikea to Best Buy. However, with Augmented Reality companies now have the opportunity to provide the confidence that the products that they are being look good or fit in the case of appliances. This will be revolutionary for companies such as Ikea, that no longer people will have to measure if the stuff they are buying looks good or if it fits, but rather they could purchase the products directly from the augmented reality experience. For companies such as IKEA it means less stores, less capital expenditures (CAPEX), less working capital and improved profitability. For other companies such as Wayfair, that don’t have a physical presence, it means increased penetration in the market. For other companies such as Best Buy a dwindling physical presence and a transformation into the digital business landscape. As Augmented reality becomes the norm in the business, I do believe that companies such as Best Buy will make the transition to a more digital business.
Now when we combine Virtual Reality, Augmented Reality, and Mixed Reality, the future looks much more promising, but much more “un-real” at the same time.
Hyper Reality according to Keiichi Matsuda means the following
“Our physical and virtual realities are becoming increasingly intertwined. Technologies such as VR, augmented reality, wearables, and the internet of things are pointing to a world where technology will envelop every aspect of our lives. It will be the glue between every interaction and experience, offering amazing possibilities, while also controlling the way we understand the world. Hyper-Reality attempts to explore this exciting but dangerous trajectory.”
This new evolution towards hyper reality will be interesting for the retail landscape. This means that consumers more than ever will be more connected, but this will mean at the same time where do we draw the line in terms of privacy and control. With this sort of technology companies will have the opportunity to control larger markets (since everyone will be connected) and as a result, will we see Amazon controlling the whole hyper-reality retail world? That is a question that we should asking ourselves. Anyways, the future of hyper reality will be really interesting for the retail landscape.