It’s hard to talk about the present and future of retail without taking into account the massive impact the Covid-19 pandemic has had on consumer behaviour. As lockdowns and restrictions have dictated people’s movements, online shopping has become a far more attractive option for both customers and businesses alike, and industries that have previously had a difficult time in the online space have been compelled to make the jump. And with a global pandemic making customers more wary of gather
gatherings in public spaces, sectors that rely on in-person showrooms to sell products have had to adapt not only their own business model, but how customers can view and experience their larger products – like cars. “We’re seeing demographics that are traditionally more comfortable with shopping in physical stores moving their purchases to online,” Retail Doctor Group’s Anastasia Lloyd-Wallis told Inside Retail. “This all started with the necessity to purchase base products such as groceries and home products online. However, when customers found that this could be completed successfully in an easy and quick process, they gained trust and confidence [in buying bigger items online].” It’s this thinking that prompted the launch of Volkswagen’s online store. Since April, Volkswagen has sold over 460 cars online to date, bringing in $36 million for the business. “Lockdowns across the country made it hard for customers to visit dealerships in person, so our online store has not only helped our customers still be able to buy a new car during this time, it’s also allowed our dealer network to remain connected and selling cars,” Jason Bradshaw, chief customer and marketing officer, Volkswagen, told Inside Retail. Breaking from tradition Now the car dealership is introducing a new augmented reality (AR) experience, which aims to let Aussies try out the vehicles from wherever they may be. In the same way furniture and fashion retailers are utilising AR to put products in customers’ homes prior to purchase, potential buyers can now use their smartphone to place a Volkswagon T-Cross or T-Roc in an open space and examine it closely through a number of clickable information points. Customers can view the car from any location and examine features through AR. Image: Supplied. Research undertaken by Volkswagen showed that 34 per cent of consumers would be open to buying a car online without doing a test drive. Jason Bradshaw, chief customer and marketing officer, Volkswagen, told Inside Retail that the AR experience is about giving customers more confidence in purchasing in this non-traditional way. “Try before you buy has always been the norm for fashion and beauty, however, we’re now seeing a virtual trend emerge with bigger ticket items, like cars,” he said. “We’ve taken the opportunity to further enhance our customers’ online shopping experience through AR, as it will play an important role in giving Aussies more confidence that what they are purchasing online is right for them.” Volkswagen was already using AR and VR tools internally in its training programs prior to introducing the technology to customers. “The feedback through these programs made it clear – a consumer-facing version had to be simple and intuitive and deliver a connected, seamless experience for consumers,” Bradshaw said. Reimagining the customer journey Volkswagen is just one of many retailers that are experimenting with the customer journey in the wake of the pandemic. Lloyd-Wallis said that retailers now need to thoroughly examine the customer journey and understand all the different touch points to keep in contact with their customer. “The journey to purchase a product is now more detailed, with consumers spending more than four hours a day on their mobile phones and are therefore much more educated and pre-researched when it comes to their buying behaviour,” she said. “Because of this, retailers are looking at innovative ways to keep connected with their customers online and to create enhanced online experiences.” The introduction of digital platforms and more detailed digital experiences has helped customers feel more comfortable about purchasing online, and AR further cements that confidence in the product without seeing it in person, according to Lloyd-Wallis. Shopify research also shows that products with AR content have a 94 per cent higher conversion rate than those without. “We have seen the rise of brands using social platforms such as Snapchat to showcase their items and using AR to try on the products, like Gucci selling trainers, Levi’s selling jackets. Luxury brands are getting involved in creating online communities and using gamification to allow users to explore and play with the product online,” she said. “As consumers are social beings by nature, they crave this interaction and experience and hence it is important for retailers to create this through their digital channels.” For Volkswagen, it’s just the beginning of its journey with AR. Next year the retailer plans to introduce the new Golf 8 and updated Tiguan to the AR showroom. Big ticket retailers, take note. Reporting by Dean Blake and Ruth Hogan.