Benefits of Virtual Stores: Why Businesses are Investing Heavily in the Technology?

Benefits of virtual stores to business

Virtual stores are stores equipped with virtual reality technology and provide customers with real like experience while they shop online. These stores are radically reinventing the way companies work by providing an outlet for innovative ways for companies to test new product designs. As Smart phones and QR code technology are becoming more ubiquitous among shoppers, marketers can track shopping habits of an individual to tailor them certain products. Real-time augmented reality advertisements and product testimonials viewed through smart phones are being displayed using the geo-tagged digital information. This technology essentially observes customers as they shop and makes targeted suggestions based on their location, age, and past buying habits. The use of this technology aims to increase impulse buying. It is a good question to ask why businesses would invest so much in virtual stores?

Here we are going to go over some of the top uses (benefits) of virtual stores to businesses.

To attract traffic to real stores

Many companies are placing virtual stores in unusual places. One such company is Korean retail giant Tesco. Tesco bought Homeplus to turn shoppers experience around by creating virtual stores (Plamer, 2012). “Korean retailer Homeplus has invented a novel solution in the form of virtual stores—retail kiosks with life-sized virtual images of real product displays—placed in high-traffic areas such as subway stations, where potential customers will be killing time waiting around.” (Cardinal, 2011). Proctor and Gamble is another company that is testing such virtual stores. It has also set up these stores in subway stations in Prague. These stores help companies attract customers to their real stores or purchase online. Thus, fulfil the ‘sell’ fundamental of internet marketing.

To devise product placement and store layout strategies

Increasingly, companies are using virtual stores to test new product placement strategies. Redesigning or redecorating an entire physical store can be very expensive even probably cost prohibitive. While virtual stores can be used to improve the layout and placement in an actual retail store without having to change the physical store design first. Kimberly-Clark uses this high-tech virtual reality software to design stores (investor.kimberly-clark.com, 2020). The retailer uses this virtual platform to stage different store designs & floor plans utilizing various marketing strategies. Information derived form these experiments is then used to gain customer review to design the actual store layout in the form found to be the most effective while also incorporating the customers’ feedback. A plus point of this process is creating an environment which very customer friendly. This results in good product placement against relaxed customers which in turn is the key to increasing sales revenues.

Creates consumer trust in online stores

Initially virtual stores were created as a way to improve test marketing, such as new product or store designs, but the huge information they gather can also help companies enhance the online shopping experience. Shoppers may be deterred from using online shopping, due to trust issues as they think of product quality, performance may not match their expectations (Bhatnagar & Ghose, 2004). By creating this 3D online store, consumers would then be able to go on the company’s website and feel as if they are shopping in the actual store. Augmented reality can now enable people to try clothes, touch products and even smell perfumes without having to go to physical stores. One example of this could be a person that is shopping for shoes. They might not be able to trust how the shoe will look once they buy and wear it. However, the virtual store’s technology can analyze the foot structure, recommend the best shoes, and then show customer a sample of how the actual show will look on them. For experiencing what they buy beforehand, customers may prefer to go to a physical department store because they know exactly where the shoe department is and can see all shoes on display rather than having to scroll through multiple pages of a website. Therefore, to aid customer, a virtual store allows a consumer to get the in-store buying experience while preventing the hassle of going to the store.   

References

Bhatnagar, A. & Ghose, S., 2004. Segmenting consumers based on the benefits and risks of Internet shopping. Journal of Business Research, 57(12), pp. 1352-1360.

Cardinal, D., 2011. Virtual stores help shoppers save real time. [Online] Available at: http://www.extremetech.com/mobile/99033-virtual-stores-help-shoppers-save-real-time [Accessed 11 September 2020].

investor.kimberly-clark.com, 2020. Kimberly-Clark Uses Virtual Reality Technology To Identify Innovations, Gain Insights And Strengthen Customer Relationships. [Online] Available at: https://investor.kimberly-clark.com/news-releases/news-release-details/kimberly-clark-uses-virtual-reality-technology-identify [Accessed 11 September 2020].

Plamer, M., 2012. Tesco trials UK’s first virtual store. [Online] Available at: https://www.ft.com/content/a1cc0fb0-dfd7-11e1-a96a-00144feab49a [Accessed 11 September 2020].