Can VR Shopping Replace Brick and Mortar Retail? Walmart Sure Thinks So

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Over the past year, Walmart has claimed a significant stake in virtual reality shopping, both through a series of patents and through a targeted acquisition. The move is somewhat surprising, considering Walmart’s persistent hold on brick and mortar stores — the company currently has over 11,000 stores worldwide, and has maintained store opening growth through the e-commerce boom. NewtonX conducted two in-depth interviews, one with a former executive with Target, and one with an e-commerce expert and former executive with amazon.com, to gain insight into the future of virtual shopping and Walmart’s real-estate strategy.

The insights from this article are sourced from NewtonX surveys, panels, and expert consultations. To gain access to these services visit newtonx.com.

The Walmart Way: Public Shopping Pods and Virtual Home Browsing

In December of 2017, Walmart made its first public move toward VR, applying for a patent for “virtual reality shopping stations.” These stations would appear as pods in shopping malls and other public areas, and would allow users to explore virtual full-size Walmart stores. Walmart noted that pods could also be sponsored by brands that could gather visual and auditory data on shoppers in order to support personalized sales and marketing initiatives. This proprietary data would provide a new revenue stream for Walmart.

Just two months later, Walmart acquired virtual reality startup Spacialand. Spatialand’s software allows third parties to create virtual reality experiences, and the company worked with Walmart’s technology incubator, Store No. 8, on a project prior to acquisition.

Then, last week, Walmart made yet another move in the virtual reality space when it filed two new patents that would allow users to virtually shop from home. The patents outline a virtual reality storefront, wherein users would wear headsets paired with sensor-laden gloves so that they could physically interact with a Walmart store virtually. When a user grabs an item from a shelf, robots in a remote fulfillment warehouse locate items in the warehouse and put them into a container for shipping using an articulated arm. The warehouse would be fully autonomous, using smart shelves to monitor inventory in real-time and robots to move these items around.

The sensor-laden gloves allow users to touch fabrics, determine size at scale, and get a 360 view of furniture and other items. In other words, the virtual store would give the convenience of online shopping with the experiential benefits of seeing products in real life.

While patents don’t necessarily indicate that what’s described in them will occur, these three moves in virtual shopping over the past few months indicate that Walmart is considering integrating VR into its customer experience. The NewtonX experts indicated that this move will have three major payoffs for Walmart: real-estate savings, lowered costs through fewer employees, and faster, more accurate fulfillment through automated warehouses.

Will Consumers Play Along?

While Walmart’s move into VR is a vote of confidence for futuristic technology, the vision may be misguided, said the NewtonX experts. It’s difficult to imagine customers being more willing to don a VR outfit in their homes and walk around a Walmart than just ordering online for almost all purchases (furniture and other large, expensive may be the exception — after all, car manufacturers are also experimenting with VR and the likelihood of adoption is higher for a multi-thousand dollar purchase). Walmart’s vision for virtual storefronts offers very little incentive for a higher effort experience than shopping online. Some analysts have suggested that instead of the virtual store, Walmart should use the technology to offer virtual try-ons, testers, or prototypes.

That said, the behemoth’s vision for virtual shopping pods in public spaces could be a lucrative investment, according to the former Amazon executive. Not only does it create a fresh revenue stream, but it also promotes impulse buying and saves on real-estate costs without sacrificing the brick and mortar experience.

Walmart executives have indicated that the company’s vision for virtual shopping will likely not be realized for another decade. In the meantime, the company has been aggressively building out its digital strategy through acquisitions including Jet.com, Modcloth, Flipkart, and, more recently, Moosejaw. It’s possible that investments in the virtual reality space will not materialize into products any time soon, but are rather a safety net against being caught off guard by a tech disruptor competitor (like Amazon).

The vision for virtual shopping pods could very well be realized ten years down the line, and it’s possible to imagine a less intrusive version of VR that enables seamless remote shopping. Currently, however, the costs of VR (both in terms of effort and money) are too high to justify it as a replacement or even an appendage of online shopping for all but a very small minority of items.

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Germain Chastel is the CEO and Founder of NewtonX.

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