NRF 2017: Is Virtual Really The New Reality?
By Matt Pillar, chief editor
The CES (Consumer Electronics Show) in Las Vegas typically serves as a precursor to the consumerist technologies that will filter into enterprise retail—and therefore be on full display at the NRF BIG Show—by the following year. So it goes that the virtual and augmented reality demonstrations that stole the show at CES 2016 last January were spiffed up with an enterprise twist and littered throughout the Javits Center at the NRF event last week.
The proposed use cases for VR/AR run the gamut from creating a wow factor for shoppers to aiding merchandise and inventory managers with deep analytics, as is the case with the VR experience demonstrated at the show by SAS, Intel, and boutique player InVRsion. The adjective du jour among peddlers of VR is “immersive,” a word invariably used to describe an experience that intends to give users graphic insight into traffic patterns, merchandising efficacy, planogram compliance, and stock levels. On the consumer-facing side, augmented reality in dressing rooms intends to provide a more efficient and creative fitting room experience. More abstract use cases for the technology are designed around “experiential” retailing, whereby shoppers can interact with or envision merchandise in an environment or context outside the four walls of the store. The home improvement (virtual remodels) is a commonly cited segment that stands to benefit.
AR/VR is fun and interesting stuff, and quite a few retail tech providers allocated considerably expensive booth real estate to demonstrating it at last week’s show. I say that was a smart move, because those demonstrations proved to be quite the draw. From any given vantage point on the show floor, it wasn’t a difficult task to spot someone standing in a booth, donning a headset, flailing their arms and wiggling their fingers in thin air. Still, there are many ways to draw attendees into a show booth. Kronos offered selfies with Jonathan Goldsmith, AKA “the most interesting man in the world” of Dos Equis beer commercial fame. Manhattan Associates hired Bob Garner, a mentalist that could ask you two questions and tell you the name of your favorite childhood dog. Both drove big booth traffic, though I’m not aware that either was able to land their respective employer a signed contract. Were the AR/VR demonstrations at NRF akin to these gimmicks, or does the technology have legs underneath all the hype it’s generating?
The answer is yes and yes. Some of the AR/VR tech we saw was fun to play with, but just half-baked in terms of bragging a use case worthy of precious IT and operations budget. Chalk one up for gimmickry. While at the show, I spoke on separate occasions with a few confidants from the retail C-suite—tech progressive confidants, I might add—who told me they were keeping an eye on these technologies, but had no budget to allocate to a concept that they just can’t yet envision in their stores. Fung Capital’s respected analyst Janie Yu told me there’s promise in AR/VR, but that this year, her company is intent on investing in new technologies that solve more fundamental problems that merchants continue to struggle with—like price and stock optimization. Those problems, she says, are solved by less sexy, but more impactful tech, like new relational databases and business intelligence technologies.
On the other hand, I spoke with a few apparel and cosmetics retailers—Neiman Marcus’ Scott Emmons among them—who were bullish about the AR tech that’s going into fitting room and cosmetic counter mirrors. These techs are differentiating the customer experience for early adopters by enabling customers to see a 360-degree, sharable view of how they look as they try on apparel, eyewear, and cosmetics. Profiles integrate with CRM and loyalty programs and can be saved on the shopper’s phone, allowing seamless experience from store-to-store or even channel to channel. What’s to be determined—or yet to be shared by early adopters—is just how effective the technology is at driving topline profit.
What’s your take on VR/AR in retail? Share your thoughts in comments.