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With the pandemic, the past year brought its share of new initiatives and the year ahead is going to be no different. Retailers in the world, which endured many weeks of closure in 2020 (up to 30% of total opening time) and are still threatened by further lockdowns in 2021, had to reinvent themselves to reach out to customers directly in their homes.

Remote shopping played a significant part in retailers’ survival via new or upgraded digital tools, such as virtual stores. This new channel provides a more inviting shopping experience than a simple ecommerce and safer than physical shopping. For instance, on a webstore the customer scrolls and browses through a series of pages showing one article next to the other. By contrast, a virtual store is an immersive experience supported by interactive elements allowing customers to actually be in the store; which these are sometimes a perfect replica of the physical spaces. Customers navigate the store and see the products on the shelves, almost as if they were in the physical space. It is a mix between a webstore and a virtual reality experience.

Virtual stores can go from augmented reality try-on to a 3D digital space to navigate. They do not require any material other than a mobile phone, a tablet or a computer to be accessible, and a broadband Internet connection.

Why use virtual stores

As shown with ventures such as SKP-S and Showfields, experiential retail was booming before the health crisis, so in order to provide a similar experience with the pandemic-induced constraints, retailers had to find a way to do it differently, safely and remotely.

E-commerce has exploded with the pandemic. As stores were closed, retailers had no other options than to look for the customer in his home directly, through social media and webstores. Virtual stores complete this offer and bring another experience, different than the ones provided by the other channels.

The immersive experience allows customers to walk around the store in an immersive way, able to see and learn about the products, and potentially make a purchase. According to Obsess, a virtual stores designing company, “on average, customers spend almost as much time on one virtual store page as they do on all the pages in the rest of an e-commerce site combined. The more people engage, the more they purchase.”

Virtual stores have the capacity to recreate the being-in-physical-store experience by using features such as music, augmented-reality try-ons and interactions with experts. It is also a way to share more information about a brand, its heritage and its commitments that sometimes cannot be exhibited as much as they would like in a physical environment, due to lack of space for example.

Just like physical stores, virtual stores also have the possibility to adapt to the season and change scenery and features according to the time of the year, making them even more realistic. For instance, during the Holidays, some virtual stores were decorated with Christmas ornaments and played Christmas music.

It is difficult to measure the importance of virtual stores at the moment as the concept is recent, especially for the ones that emerged with the pandemic; and still remains a minor part of retail. It seems that it is a relevant option for retailers in fashion, beauty and home for example, for whom visual elements are important to secure a potential purchase (contrary to a grocery store). It is also another way to stay connected with the customers and the community, in addition to ensuring a social media presence.

There are several reasons a brand would use the virtual stores:

For Ralph Lauren, it was a way to introduce new customers to the brand’s retail experience even after physical stores re-opened. They recreated the Beverly Hills flagship store and added some music, to make the tour even more realistic. It is also linked directly to the webstore.

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Via its virtual store, French beauty brand Clarins introduced the look planned for some new shops in 2021. Showcasing this new concept in the virtual store before physical stores is an opportunity to test it. The experience also offers interactive activities such as a skin diagnosis, virtual make-up testing and the possibility to book appointments with beauty experts. Plus, it highlights features such as an eco-bar filled with beauty water and oil, and points out at which physical stores customers can find it.

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Charlotte Tilbury’s avatar greets its customers on the eponymous brand’s recently-launched virtual store, in an attempt to bring humanity inside the digital experience. The store offers the possibility to book video consultations and the convenience of being able to save an item in the ”shopping basket” directly from the virtual store, without having to search for it on the e-shop.

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It is a way to make their world accessible to everybody. During the first wave of lockdowns, Dior was one of the first retailers to introduce a virtual visit of its Champs-Elysées store in April 2020. The brand gave the possibility to customers to discover the store without visiting Paris. The virtual store is a replica of the physical space and is directly connected to the online store to encourage purchase. The biggest downside however is that it is definitely not convenient for a perfume store to be virtual when you cannot actually smell anything.

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Recently opened OREFICI 11, the VF Corp. multi-brand concept in Milan, launched both the physical store and the flagship’s virtual tour at the same time. Opening a physical store in the current context is risky, and VF Corp is using the virtual tour of the store as a back-up in case Italy experiences further lockdowns. The tour does not allow for customers to purchase directly from the virtual store, which is not very convenient, but provides information on the store and on the brands’ engagements.

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One of the biggest strengths of the virtual stores is that they are accessible to anybody (within the limit of the national restrictions that are sometimes imposed). Physical flagships are generally located in capitals or big cities, preventing many customers from visiting them if they are not able to travel. The technology definitely comes as a complement to the webstore, as it acts as a point of entry to e-commerce. But no matter how convenient virtual stores may be, they cannot recreate the touch-and-feel of instore shopping, nor can the virtual assistant replace an actual store associate.

Virtual stores and department stores

So far it appears that virtual stores are a good options for brands, and biggest retailers have not gone for it yet. NYC-based Showfields rapidly set up virtual tours of the store, during which a store associate walks around the store while talking to the customer via a videocall. The experience is a bandage and a way to stay in touch with an audience, but cannot be truly compared to what other brands have done in terms of virtual experiences.

Virtual stores could be a one-time option for retailers, and department stores, to support the business or a time-limited event. That’s what John Lewis did by launching a virtual Christmas shop last fall. Just like for e-commerce websites, virtual store does not necessarily need to cover the full range of a department store. It seems unrealistic and not very user-friendly to virtualise a five or six-storey department store.

Instead, it could focus on one particular category such as home and lifestyle, which has been booming since the beginning of the pandemic; or advertise a special collection, collaboration, or event. It could also focus on a specific market which is what Lancôme did when launching a virtual pop-up exclusively for Singapore. For the ones who are known to be a destination, it could also be an efficient way to transfer to distant customers the look and feel even though they might not be able to travel or to enter the country (Harrods or Liberty could appear natural candidates to this move).

Conclusion

Virtual stores are not completely new, but they multiplied with the pandemic. The first attempts at virtual stores from a few years ago required customers to use particular equipment, such as augmented reality headsets. The new generation of virtual stores are accessible directly on mobile or on computer, making them more user-friendly and visible to more people.

But it has its limits: a video, and even very smart artificial intelligence, won’t measure up to a live interaction with an actual human being. Virtual stores also have a cost, in terms of development and design, and in terms of technology used to support the system. It also needs a team to make it work and requires a good bandwidth to be experienced.

The virtual store will not replace the physical space. However it comes as a short-term, much-needed support to the physical and online store during this pandemic; and the trend might last beyond the health crisis. The covid-19 virus might be defeated at some point, but it will have changed the world and many habits for ever. Who knows when we will be able to travel again, or walk inside a store without a mask and a regulated traffic flow. A customer may wonder why she would need to get on a car or bus to go a store to shop when she can do that conveniently from home. Furthermore, after the crisis a virtual store will continue to attract and serve the people that can’t go to the physical store. These experiences could take their real place in a brand’s business activity at the same level as the online store.

However, partner at consulting firm Bain & Co. Mikey Vu warns that all virtual stores won’t necessary be successful: "Not every virtual store will succeed. As more companies test the concept, they’ll need to better personalise the experience for visitors, make it easier to discover products and make it a fun experience."

Retail consultant Doug Stephens said: "With virtual reality technology, online shopping could look more like physical stores or completely different environments. […] For instance, if a retailer sells outdoor products, it could design an interactive website that looks like an outdoor environment."

Just like for the physical experience, retailers will have to distinguish themselves from the competition to stand out virtually.

Credits: IADS (Louise Ancora)