CommentaryNov 6th, 2017

The Future of Virtual Reality and Augmented Reality in Automotive Retail


Electric and autonomous driving, connective technology, and car ownership trends are challenging the way car companies connect with customers. Today’s buyers are more focused on the shopping experience than ever before — not surprising considering millennials value experiences.

Car buyers spend nearly 15 hours in the car-buying process, and the majority of that time (59%) is spent researching and viewing cars online.

Despite the plethora of information available to buyers, 70% still don’t know which car they want until they visit the dealership and sit in different makes and models.

This means salespeople spend the bulk of their time lining up cars for buyers to see, only to have them realize they don’t like, for example, the way the interior looks.

What better way to improve the shopping process than by leveraging technology that transforms an industry?

Virtual reality (VR) is already enhancing retail, architecture, hospitality, and health care. What will it do for the automotive industry, and when?

Any discussion of virtual reality is also a discussion of VR and AR. Augmented reality (AR) allows users to experience an enhanced real world, either by bringing vehicles into their own environment or providing additional information on the vehicle in front of them.

VR takes the user into a virtual world that provides a high level of engagement with and focus on the product presented. AR is already available to millions of people on their smartphones, and forms a stepping stone to the significantly more compelling implementation on wearable AR and VR headsets.

These first steps educate the consumer, and allow technology providers to upgrade the operating systems and prepare content developers. Widespread adoption of VR is expected in the next few years. Some projections estimate global VR headset shipments will reach 61 million units worldwide by 2020, putting broad market adoption squarely in our future.

Several developments, however, need to come to fruition for consumers to embrace VR: headset wearability, affordability, and quality of content. First, the install base needs to grow, and that will happen with accessibility and wearability.

The current high-performance VR headsets are heavy, uncomfortable, and require a PC or gaming console to run the software. Also, prices are still a barrier to wider adoption. It’s a good sign that HTC, Google, Samsung, and others are investing in affordable standalone high-performance headsets that work without a PC.

We expect Apple to follow.

Well-designed headsets should become more affordable within the next few years, and we expect to see a switch from a mobile focus to a broad install base of wearable VR technology that delivers a compelling experience.

Until then, the integration of AR and VR into mobile operating systems will drive the adoption. It is likely that VR wearables will eventually replace mobile phones and computer screens. Another driver will be mainstream integration of VR into content development pipelines and toolsets.

The gaming industry has shown with each new generation of consoles that quality content can determine the fate of new hardware. Gaming companies are driving the VR market because it’s the next step for gaming, but it’s important for all brands to embrace VR and create meaningful content.

While hardware is coming rapidly to market, content developers are racing to add high-resolution 360-degree image creation into their production pipelines. Unless content developers deliver compelling and sustainable virtual reality experiences, this may become the roadblock to adoption.

According to a recent study, 80% of the future purchasing generation (currently 13 to 17 years old) are more likely to visit stores that offer interactive experiences via AR and VR technologies. Data will also play a crucial role in the future of commercial VR applications.

While we can track user behavior and interactions on websites, mobile apps, and even in-store, VR raises the bar for the data available. Inventory reduction is another important benefit.

Allowing customers to experience a product in VR can drastically reduce the need for inventory in physical stores. This is particularly valuable for space-intensive industries like automotive or home furnishings.

For these reasons, virtual reality will shape the future of automotive sales. We’ve seen the recent successes of online-only automotive sales platforms. Imagine customers experiencing what their purchase looks like in a VR experience instead of flipping through images and watching videos.

By helping consumers gain confidence in their choices before entering the dealership, time spent in the dealership is reduced because the customer can view different trim and color options with a few clicks.

VR can also make dealerships and manufacturers more mobile. Imagine consumers experiencing your cars wherever you choose, with minimum footprint requirements.

Whether they're in malls, parks, restaurants, events, or public transportation, all you’ll need to give them a positive experience is the hardware and a chair to sit in for safety and comfort.

This is the opportunity to bring your dealership to the car shopper. The applications in the automotive range from dealership solutions that tackle trim inventory, provide enhanced sales experiences, and deliver portable dealership experiences and applications for at-home viewing to aftermarket solutions designed to show consumers what options look like.

A number of OEMs and aftermarket businesses have announced VR initiatives. We’ll see the penetration of VR as a primary tool for car shopping in the next few years.

This is because affordable high-performance, easily wearable headsets will become available, and content production companies will transition their capabilities to deliver high-resolution 360-degree content.

The largest technology companies are investing billions in bringing this to reality. We can expect exponential growth in the adoption of virtual reality and augmented reality as they become the primary way to view media.

This is just a few years away. When the adoption takes off, it will be faster and on a larger scale than most will anticipate. Now is the time to get started.

David Falstrup is CEO of Evox Images and founder of RelayCars, the No. 1 VR auto-shopping app in the world, and the dealer-driven VR sales app, RelayCars Pro. You can find it in the Samsung Gear VR Oculus store, and download it to your phone.

Authored by

David Falstrup

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