Why virtual reality needs to become the new reality for marketers

Virtual reality (VR), an immersive computing technology that submerges consumers in a world, is predicted to completely transform the shopping experience. Goldman Sachs estimates that investments in VR, along with reality, will reach a staggering $1.6 billion by 2025.

While brands are clambering to become part of the virtual environment, there is very little known about how to enhance the brand experience for all consumers and where to employ VR technology. Thus, marketers may be asking whether this is the right time to invest in VR.

VR applications include automated virtual environments (AVEs) such as head-mounted displays, such as virtual goggles, or CAVES, games, 360 computer simulations, and virtual worlds such as Second Life. For instance, Swarovski, in collaboration with Mastercard, created a virtual atelier, that anyone can access by downloading the app. In addition to about the particular collection pieces, consumers can make virtual purchases.

Recent research suggests that marketers’ approaches to each should differ. For instance, more immersive applications are better suited for teaching consumers new skills, such as Lowe’s DIY Holoroom, or creating a connection with the brand, such as liaising with virtual shop advisors in Second Life. Beyond this, both instances also provide marketers with an opportunity to test new product concepts and even co-create new offerings with consumers.

Simulations offer an easy and cost-effective mechanism to introduce consumers to a brand and shape their decision journey, such as the Ruinart champagne visit. Finally, games may act as an experiential and interactive way for marketers to shape subtly consumer preferences – for instance anti-drinking and driving messages embedded in games.

What makes VR effective? Flow is vital for the VR experience, as it is responsible for creating the state where consumers feel immersed and active in the virtual environment. Moreover, consumers feel disconnected from the real environment and sufficiently plugged into the virtual environment that the virtual environment feels like the real world.

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In truth, the effectiveness also depends on the application and the individual consumer. For AVEs, application quality – view, pixels – is important to create flow, though because AVEs are highly immersive, consumers who dislike effortful thinking may disengage from the experience. Thus, allowing consumers to opt into various levels of immersion could eliminate the negative effects for these particular consumers.

A similar challenge exists for simulations, because simulations do not entirely plug the consumer into the virtual experience. In this case, realism of the environment contributes most to flow, and consumers with lower knowledge of a product benefit greatly from simulations.

On the other hand, those with high product knowledge may not process the information the same way. Rather, when consumers have high product knowledge, simulations can decrease consumer attitudes and purchase behaviors. To overcome this, initial research suggests that heightened emotional stimuli, such as the inclusion of more tactile imagery, can be helpful.

For both games and virtual worlds, the avatar plays an important role in flow, such that customisation and view of the avatar can encourage flow. Additionally, virtual worlds and some games also allow communication with others, which can positively influence flow. While little research has been done to investigate these two types of VR, it would inevitably represent an important area for marketers. For example, Facebook’s purchase of Oculus as well as WeChat adding VR to its messaging app represent the integration of AVEs and virtual worlds.

Ultimately, this means that social connections and business will be conducted virtually. Thus, the question is not really whether marketers should use VR, but how should they use VR in order to compete with today’s ever-changing and technology-embedded world.

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