The emergence of virtual technologies—Virtual Reality (VR) and Augmented Reality (AR)—is transforming customer experiences in business. They were first used in gaming and entertainment, but retailing and property are currently leveraging the potential of the technologies to narrow the difference between reality and imagination. By enabling consumers to interact with products or properties in real-like virtual settings, AR/VR is transforming business concepts for engaging, selling, and innovating.
AR/VR Retail: Transforming the Shopping Experience
Virtual Try-On Experience
Grocers have struggled for years with the challenge of reducing product return rates and customer dissatisfaction. Virtual try-on based on technology that uses the application of AR is addressing this. Fashion labels such as Nike and Gucci allow clients to “try on” clothes and shoes via their smartphones. Beauty brands such as Sephora and L’Oréal utilize AR mirrors and apps whereby clients can try out color make-up in real-time.
Its tremendous effect—customers are more confident in their buy, reducing returns and generating brand loyalty. Shopify claims AR experiences can increase conversions by as much as 94%, setting their business value. Interactive In-Store Engagement
Brick-and-mortar retailers are also leveraging AR to create engaging in-store journeys. IKEA’s AR app, IKEA Place, allows shoppers to visualize how furniture fits into their homes before purchasing. Similarly, Lowe’s Holoroom uses VR to help customers design and remodel kitchens and bathrooms, offering a practical and immersive planning tool.
This blend of digital and physical shopping elevates customer satisfaction and sets brands apart in an increasingly competitive marketplace.
AR/VR in Real Estate: It’s More Than Property Selling
Virtual Property Tours
Perhaps the most revolutionary application of VR in real estate is the virtual tour. Previously, potential buyers and investors would literally walk through a chain of properties before eventually deciding on one to purchase—a waste of time. Now, with VR, customers can walk through properties remotely through 360-degree walkthroughs.
Technology like Matterport and industry players in the real estate industry like Zillow give virtual tours of the properties, where prospective buyers get to feel the size, floor plan, and atmosphere for themselves without setting foot inside buildings. This has given developers greater international access, with international investors being able to make fully informed decisions thousands of miles away.
For unbuilt or even only proposed properties, VR is a powerful selling tool. Unbuilt apartments, offices, or shopping space can be sold by developers to prospective buyers through simulated VR surroundings. Prospective buyers don’t have to settle for floor plans and artist impressions anymore—perhaps, they can “walk around” the house of their new home, see design concepts, and customize their choice.
This has proven especially valuable in luxury real estate markets in cities like Dubai, New York, and Singapore, where developers use VR to attract overseas investors.
Case Studies: Success Stories in AR/VR Adoption
Case Study 1: Gucci’s AR-Driven E-Commerce Boost
Gucci partnered with Snapchat to launch AR try-on lenses for shoes. The campaign allowed customers to see how the shoes would fit them through the lens of the smartphone. Within weeks, Gucci had more traffic and sales, affirming that AR was not a fad—it could drive business.
Case Study 2: Sotheby’s International Realty – Maximizing Buyer Audiences
Sotheby’s borrowed virtual reality technology from Matterport to provide 3D walkthroughs of million-dollar mansions. This enabled the company to sell mansions for millions of dollars to international clients who could not travel during the pandemic. Sotheby’s then entered into a series of value deals through VR-based home walkthroughs, highlighting how technology provides ease of mobility in the face of adversity.
Case Study 3: IKEA Place – From Visualization to Purchase
IKEA’s AR app is currently amongst the world’s leading downloaded retail AR apps. By its use of AR, making furniture visible at life size in the home, IKEA reduced purchasing reluctance. Company reports validate spectacular reduction in returns, which indicates support for the operational efficiency role of AR.
Problems and Ethical Issues
Although AR/VR has great potential, take-up is linked with issues:
- Implementation Cost: High-end AR/VR experiences cost high to implement in terms of hardware and software as well as content.
- Accessibility: Everyone may not have a device that can provide an immersive AR/VR experience.
- Data Privacy: Immersive technology demands customers’ biometric as well as behavior data, which is an ethics as well as a regulatory issue.
- Expectation Gap vs. Reality: Gorgeous high-quality virtual glimpses sometimes create unrealistic expectations that do not materialize in the real world and disappoint customers.
Companies need to be in balance between openness and innovation if they have to stay inclusive and credible.
The Road Ahead: Convergence of Physical and Digital
Shopping and property AR/VR is the future in phygital convergence—bending physical and digital interfaces into a singularity. As an example, estate agents can perform property tours through AR spectacles to overlay renovation potential, and AI-driven shopping assistants can be integrated into VR by retailers.
With expansion in 5G coverage and falling equipment costs, take-up will increase. AR/VR has the potential to contribute over $1.5 trillion to the global economy by 2030, as estimated by PwC and retail and real estate are two of the biggest gainers.
Conclusion
AR and VR are no longer fantasy but business enablers that provide measurable value. In retail, they eliminate risk of purchase at the point of sale and propel customer experience. In property, they enable property access to all and allow for transactions anywhere in the world. Organizations that adopt these immersive technologies now are not only enhancing customer experiences but creating foundations for long-term competitive differentiation in an immersive digital world.
