What is Virtual and Augmented Reality?
Virtual Reality (VR) provides a complete immersion into a simulated world, where everything you see, hear, and sometimes even feel is created by a computer. Currently, VR experience can be delivered via many types of software ranging from High-end headsets like Meta Quest and the latest Apple Vision Pro, to even smartphones and tablets.
Meanwhile, Augmented Reality (AR) is a specific type of VR. With AR, you see your surroundings through your phone or glasses, but digital elements (e.g. sounds, objects, graphics, etc.) are layered on top. It provides contextual and personalized information, enhancing usability, and enjoyment by delivering a more interactive experience.
The rising popularity of VR and AR in Marketing
1. A more personalized and interactive shopping experience
The world of marketing is embracing Augmented Reality (AR) to create more engaging and interactive experiences for consumers. With the application of AR and VR in marketing, consumers today can try on their favorite clothes virtually or see how the furniture fits in their living room before they buy them. Currently, we’ve seen some applications of these nascent technologies in the retailing industry. With AR-powered apps, it’s no longer a problem for us to locate any specific products in massive brick-and-mortar stores.
Virtual reality, on the other hand, allows retailers to create personalized shopping experiences by highlighting relevant products that are specifically tailored to our needs, offering virtual consultations with stylists, and even letting us try on clothes in different virtual environments (read more examples below).
2. Marketing Communications with VR and AR
Studies suggest that AR advertising has become more engaging than traditional online ads, leading to more positive attitudes toward the brand and encouraging people to buy. Similarly, VR commercials are more effective than traditional commercials in influencing immediate behavior and impulsive shopping. This is the result of a more engaging and interactive experience for consumers. Nowadays, mobile AR ads on social media and other platforms offer us 360° views, detailed information (production, materials, reviews), and even try-on features, blurring the lines between advertising and actual shopping.
Moreover, with the development of these technologies, consumers can even interact with physical ads such as billboards or posters, which have become a little obsolete and boring in the digital world. By scanning the provided QR codes, we can unlock an AR or VR experience on our smartphones, get more product details, see the items in action, or even play a game.
Examples of VR and AR in Marketing
1. The North Face’s Virtual Reality Marketing Application
In 2015, the North Face created a unique VR campaign in South Korea to launch their new McMurdo coat collection. Customers were invited to put on VR headsets and embark on a virtual dog sled ride across the South Pole, allowing them to experience the harsh conditions the coat was designed for firsthand (See video below). After the VR experience, users could even ride a real dog sled inside the mall wearing the McMurdo coat, which were blurring the lines between the virtual and physical worlds. This multi-sensory approach generated significant buzz and increased brand awareness. Besides, this experience has created a powerful emotional connection that went far beyond simply seeing pictures or reading descriptions. By immersing themselves into a simulated world, customers could feel the wind, the cold, and the adrenaline of the ride, making them understand the value and functionality of the McMurdo coat on a deeper level.
2. IKEA’s Augmented Reality Marketing Application
IKEA Place App is definitely one of the successful applications of AR in Marketing which has been very useful in enhancing customer online experience and purchase intention. Basically, the app allows users to virtually place IKEA furniture in their own homes to see how it would look and fit before they buy it. Customers are allowed to browse through the IKEA catalog and select the piece of furniture they’re interested in. The AR technology then places the furniture in the customers’ room virtually and allows them to move the item around to see how it looks from different angles. By doing this, the brand has enhanced its customers’ shopping experience, helping them make more informed decisions about their purchases and avoid the risk of buying something that doesn’t fit or look right in their home (See video below).
The future of Marketing with Virtual and Augmented Reality
A transformation of digital consumer behaviors
Digital consumer behaviors are undergoing a radical shift, driven by the immersive possibilities of virtual and augmented reality. Today’s consumers are becoming more engaged in experiences that connect them with brands and products on a deeper, more personalized level. VR is moving beyond replicating physical spaces, instead crafting unique, sensational journeys that build brand loyalty and consumers’ trust. From virtually trying on glasses to visualizing furniture in our living room, AR and VR are empowering us to make more informed decisions. This shift towards personalized, interactive experiences is telling us about a fundamental transformation in how consumers engage with brands, paving the way for a future where the lines between online and offline shopping blur seamlessly.
The new way to create a sustainable competitive advantage
Soon, these immersive technologies are believed to transcend traditional marketing strategies by giving brands opportunities for deeper customer engagement, personalized experiences, and brand differentiation. Here are 3 competitive advantages that the firm can sustain if it adopts virtual and augmented reality:
- Distinctive Customer engagement
- Better personalization
- Building brand differentiation
Current Challenges with VR and AR Marketing Applications
Privacy concerns and ethical issues
While both Virtual and Augmented Reality have become new standards for planning marketing strategies and tactics, their reliance on user data remains a privacy challenge. Here are the key concerns:
• Data access: AR requires access to a user’s camera and even their location, which raises concerns about potential misuse of personal information. Data breaches in AR apps could expose not only personal information but also real-time video footage and location data.
• Facial recognition and anonymity: Since many AR filters these days focus on facial manipulation, this raises ethical questions about perpetuating unrealistic beauty standards and potentially impacting mental health.
• Unethical practices: While research addresses ethical concerns in other digital realms, there’s a lack of studies specifically examining AR’s ethical implications, highlighting a crucial area for further exploration.
• VR security vulnerabilities: VR environments expose even more user data to potential hacking, including movement, behavior, and even emotional responses within the virtual space. Therefore, securing this sensitive information is one of the priorities for all businesses that aim to integrate this technology into their marketing strategies.
Slow transition to mass adoption due to high prices
One major hurdle VR marketing has been facing for the last couple of years is the slow transition to mass adoption due to the exorbitant prices that customers have to pay for a VR headset. The current Apple Vision Pro, which is perceived as a revolutionary entry into the AR market, has a price tag of around $3.499, while its main competitor Meta Quest 3 costs around $479. These figures seem to remain unaffordable to the masses, throwing the future of VR and AR mass marketing applications in question.
However, as our technology has advanced in leaps and bounds over the last decade, I remain optimistic that accessible Virtual and Augmented Reality hardware options will become widely available, which means that marketing applications of these technologies will no longer struggle to reach their full potential or remain a niche tool rather than a mainstream marketing force. It is believed that around 100 million consumers were using AR to shop in 2020.
Sy Chu
As an analytical and creative marketing enthusiast skilled in customer analysis, content research and brand management, my passion is help businesses gain insights into their brand and marketing strategies to drive impactful outcome to their success.