The following is a guest post from John Tavolieri, chief product and technology officer for Nielsen Global Connect. Opinions are the author's own.
Imagine walking into a grocery store and instead of grabbing a cart, you put on augmented reality (AR) glasses pre-loaded with an artificial intelligence (AI) shopping program. Wait, did I say walk into a store? I mean sit down on your couch at home, put on a virtual reality (VR) headset and virtually shop from the comfort of your own home. A virtual shelf fills up with a curated selection based on your purchase history. Throughout the "trip," you pick up and inspect products, try things on, ask the program questions about ingredients and check product reviews.
Once the plot line for science fiction films, experiences like this are fast becoming realities — and opportunities abound for marketers. The first-generation examples of this technology are already here. Smartphone apps enable people to access additional information as they walk past the aisles, to view how a product looks in their home or to provide a guided path through a store. Growth in this technology — particularly within the consumer packaged goods (CPG) industry — will accelerate, based on consumers' willingness to adopt this type of immersive, interactive technology experience that blends online and offline.
AR/VR has the highest potential to be the next big tech disruptor and differentiator. More than half of global consumers (51%) are already willing to use AR/VR to assess products, reflecting a high level of interest for adopting this emerging technology. By comparison, only 44% of consumers say they're willing to use self-checkout, a much more ubiquitous technology. While consumers are similarly interested in driverless cars, drone delivery, custom 3D-printed products and receiving personalized health advice from AI, AR/VR will face the least regulatory, logistical and ethical headwinds.
Try-before-you-buy will bridge physical and digital
The implementation of AR/VR in stores has so far been more gimmicky than practical. However, as access and adoption increases, it has the potential to bridge the gap between store and home, online and offline. By combining personal datasets with AI and machine learning, retailers and manufacturers will have the power to deliver a personalized experience unlike anything we've seen before. The pain of scouring the shelf for a favorite product, trying to determine whether it fits in your home, on your desk or on you, and other common shopper struggles will all but disappear.
This doesn't mean that there won't still be an audience for the corner store or traditional storefront, only that AR/VR will usher in a new kind of store and brand experience and an unprecedented level of personalized marketing.
In-store augmentation tech such as navigation apps and electronic shelf beacons will create captivating and individualized experiences for people who prefer a ramped-up physical retail experience, based on their personal data profiles. Smartphones, AR apps and smart glasses will provide a custom experience for each individual, which could include personalized advertising, marketing, content and product recommendations all aimed at helping shoppers make more informed purchasing decisions.
Brands will also be able to use interactive apps and virtual assistants to provide personalized experiences for customers, expanding their reach and earning brand loyalty. This will likely disrupt the traditional trade promotion relationship between retailers and manufacturers, as manufacturers promote directly to their customers at scale and for a lower cost.
However, both brands and retailers will be able to use AI to better understand how their marketing investments influence sales outcomes. This will then enable them to optimize and individualize future campaigns.
Like all emerging tech, AR/VR requires caution and diligence
But while AR/VR technology opens up doors for companies to interact, engage and share information with consumers, it also comes with certain risks. The advanced application of data for personalization amplifies any misstep and will require the utmost precision, security and respect for the data and how it's used.
To succeed, companies must accelerate their ability to protect, manage and connect their data sets as well as consumers' personal data. By taking proactive measures, companies can avoid spending excessive amounts of money fixing problems or even damaging their brand reputation.
In the next five years, AR/VR technology will augment the shopping journey in increasingly meaningful ways — from the way people discover, choose, share, buy and engage with brands. When connected with product data, this technology will reduce the premium on shelf space by enabling consumers to easily sort, navigate to and identify products like they might online — based on ratings or attributes. In-store merchandising and promotions will become increasingly personalized and complex, matching specific deals with the shopper's behaviors. Furthermore, AR/VR will tear down the delineation between online and offline offerings, enabling consumers to access extended product offerings in-store.
For marketers who adopt AR/VR quickly, the opportunity to reach consumers where they are will be unprecedented. And once they've taken the necessary steps to protect consumer data, they'll be able to create informative, personalized and compelling experiences that enable risk-free "try-before-you-buy" scenarios and smarter decision-making.