Getting A (Virtual) Reality Check
June 6, 2017
Ground-breaking technology nearly always causes a stutter-step in the business world. Everyone knows it will change the game. Everyone knows it can make their business money, but no one is quite sure how. That’s the beauty and the curse of advancements in consumer-facing technology. People love it. It makes their lives easier, fuller, or more enjoyable, but how can businesses capitalize? Virtual reality and augmented reality are experiencing some of these very growing pains. It’s easy to see why people love the nearly-real visuals, but how can companies show a really-real return on investment?
First, The Easy Answer
The starting line for any burgeoning tech company is to find a way to include native ads in their content. Nobody loves this solution, but it is the easiest to sell, and generates accountability-free cash.
When the platform or technology gets a little traction (meaning everything from daily active users to number of glee-glorps in the floopty-do), business can rationalize spending money to get attention from the audience. There’s a logical connection between the existing audience and your message. If lots of people are already there, then those people will see and engage with your ad or promotional content. This backwards reasoning is why Outdoor Advertising is still an eight billion-dollar business. For VR and AR, this will mean the seamless ‘reality’ experience will begin feeling more like the party scene from an early-00’s high-school flick than an immersive experience. Every drink is a Pepsi; every sneaker is Nike; and everybody can’t get those VR/AR head-sets off fast enough.
The Better Answers
We see the future of VR and AR in two distinct categories: Experiential Marketing and Retail. In both cases, the technology is not used as an advertising and marketing platform. Instead, businesses utilize the technology as a tool for creating connections and making sales.
Experiential Marketing is adored by brands and brand-lovers alike. The singular mission; to create an experience that speaks to your brand and immerses your customers into something unique, means that the old relationship between brands and their customers melts away. Customers love it, because no one wants to be sold when they’re trying to have fun. Businesses love it, because it translates (if indirectly) to sales.
For a few of the reasons stated above (people don’t love the feeling of being ‘sold’) retail has taken some hits. Large footprints and backwards practices are weighing down the industry. We’re expecting to see a shift towards micro-retail soon, and that means those practitioners will need to get a little creative.
Smaller footprints equal less room for employees, less room for inventory, and (yes) less room for customers. Fewer sales employees mean reduced SG&A and higher margins. So, overall a good move in a positive direction. Less room for customers means you’ll have to make the most out of the ones you get. No pressure. Finally, the most interesting challenge; less room for inventory. For the most part, retailers keep massive amounts of stock on-hand. The adage is, “If it’s not there, you can’t sell it.” But ecommerce’s growing market share says that thought is a distant memory. VR and AR offer a fascinating opportunity to give your customers a real-life experience with your inventory, even if it’s not there.
Experts agree, both VR and AR have a long way to go before they can be implemented in most industries. The seamless reality feel is key, and the tech hasn’t lived up to that expectation; yet. We’re looking forward to the innovative, ground-breaking ways businesses will implement Virtual Reality and Augmented Reality platforms!
For more information about our offerings around experiential marketing and micro-retail, fill out our contact form below.