Online retail is growing all the time: according to Forbes, it will account for 28% of all retail sales in the United States by 2028. And a big part of that is the growth of Extended Reality (XR) technologies that are transforming the customer experience - to such an extent that XR could boost global GDP by as much as $1.5 trillion by 2030. Retail technology trends indicate this growth will only accelerate in coming years.
There are so many different opportunities for XR integration in retail that it can be hard to know where to start. In this blog, we’ll explore the key use cases for XR integration throughout the retail customer journey, and share some top tips for integrating successfully.
Firstly, it’s important to understand that XR isn’t a technology in itself - it’s actually a combination of different XR solutions, that can work separately or in conjunction with each other:
Augmented reality adds simulated elements to the real world, to deliver enhanced customer experiences. AR retail experiences offer several advantages: virtual try-ons for fashion and beauty products eliminate the need for physical sampling; visualization technologies show how furnishings would look in a customer's space; and in-store solutions help customers locate products and access real-time information.
Virtual reality, on the other hand, provides entirely simulated environments that customers can be fully immersed in. These environments can take the form of virtual showrooms, where customers can interact with products and launches; or virtual digital commerce stores that replicate the real-world shopping experience for customers, any time and anywhere.
MR in retail draws on the principles of both AR and VR to create environments that seamlessly blend the physical and virtual. This includes immersive product demonstrations that give customers a chance to interact before committing to a purchase; and smart mirrors in stores that deliver virtual try-on technology, integrated with inventory information and personalized recommendations.
Successfully implementing XR technology - whether online, in stores or a combination of the two - can be transformative for retailers in a sector where competition has never been greater. From our experience supporting retailers with their XR integration, benefits have typically included:
XR technology helps retailers make smarter decisions around how customers move around their stores, meaning layouts and product positioning can be optimized, based on customer behavior and footfall patterns. It also adds new levels of personalization and interactivity for customers, helping them make more informed purchasing choices, and receiving valued customer experience that they’re increasingly looking for.
The combination of analytics-driven insights and XR can drive new levels of personalization, and by extension brand loyalty. Customers can interact with and assess products in immersive environments that they feel comfortable with and that suit their personal shopping preferences. It also enables tailored product suggestions to be delivered to them, which can drive increased revenue through upselling and cross-selling.
Around one in six items purchased online are returned, with poor fitting the most common complaint. Virtual try-ons let customers see how items both fit and look on them before purchasing, decreasing return rates. This in turn can support the bottom line by maximizing logistical cost efficiency, while simultaneously improving customer confidence and satisfaction.
The theory behind XR integration for the retail customer journey is clear. But how does this work in practice - especially when fitting the technology into existing buying journeys. We recommend these five strategies:
In the coming years, XR will move from trend-setting innovation in retail to a core element of the retail customer experience. This will especially be the case as AI-powered personalization enables adaptive shopping experiences and uniquely tailored environments; and virtual social shopping opens opportunities for shared XR experiences and loyal customer communities.
This means that now is the time to start investing in XR integration if your organization hasn’t done so already. At Ciklum, we’re already supporting retailers just like you with:
| Strategic frameworks and comprehensive XR roadmaps that align short-term wins and long-term goals | |
| Cross-functional teams that combine technical expertise with customer experience know-how | |
| Human-centered XR design that breaks down the barriers of customer engagement through emotionally resonant experiences and intuitive interfaces | |
| Modular XR architecture, built through Ciklum’s engineering expertise, that enables rapid iterations and adaptations when customer expectations change and sales volumes scale upwards |
Want to know more about how XR integration can work for your retail business? Get in touch with the Ciklum team today.