Are consumers ready for Alibaba's VR Pay and Virtual Reality?
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Technology is set to pave the way for the future of the fashion industry, but are consumers really ready to adapt and embrace the latest wave of tech to come their way - virtual reality?
Online giant Alibaba is keen to lead the pack, as Alibaba Group Holdings revealed a new payment service which aims to offer virtual reality shoppers the freedom to confirm a payment with the simple nod of the head. Known as VR Pay, the new service is part of the Chinese company's recent efforts to tap into the newest technology to further enhance the experience of online shopping. The virutal service follows on from Mastercardand Alipay's service offerings for mobile payments, which use facial recognition technology to let customers pay for a purchase with a "selfie."
Alibaba to launch new VR payment service - but are consumers interested in VR?
Alibaba's new VR payment service works hand in hand with VR shopping - which means consumers using virtual reality headset to browse through VR shopping malls or stores would be able to pay for their times without having to take off their headsets and reach for their cards. Instead, they will be able to confirm payment with a single glance or nod. Shoppers identity will be able to be verified on VR Pay through authenticated account logins on connected devices with passwords, or using voice identification technology. Although Alibaba predicts its new VR Pay will be ready for commercial launch by the end of the year, the question arises - are customers interested and keen in taking on this technology?
Virutal Reality is not a new concept - it has been discussed for decades but due to a lack of technology, was something that remained firmly out of reach for most consumers. However, over the past few years technology surrounding VR has advanced, rapidly evolving from a concept to a reality nearly everyone can grasp. Thanks to the rise of the smartphone and headsets such as the Google Cardboard, nearly everyone can experience some level of VR from the comfort of their own home. And VR is not just limited to gaming experiences - as seen with Alibaba's VR Pay. A number of fashion retailers have also begun to dabble in VR as well, using it to offer consumers unique insights into their brand world. For example, Topshop and Ralph Lauren both held events in stores which offered customers the chance to view their catwalk shows live in real time in 3D, with behind the scenes footage. Dior created its own exclusive VR headset, Dior Eyes, which aimed to "lift the curtain curtain on its latest ready-to-wear show."
Alibaba joins the likes of Topshop, Dior and Rebecca Minkoff in using VR to enhance consumers experience
However, it was US designer Rebecca Minkoff who was one of the first designers to really embrace VR. Teaming up with VR firm Jaunt in 2014 to shoot exclusive footage of the brand's Autumn/Winter 2015 show, the high end label also offered its own version of the Google Cardboard headset and aimed to develop its own VR channel. The brand strived to be the "first fashion brand to democratise access to VR", but it appears as if they have struggled to get consumers on board. Uri Minkoff, CEO of Rebecca Minkoff revealed in an interview with Cracked in September 2015, that the brand was "a little early to VR." At the time he said Rebecca Minkoff would be skipping a season (or two) in terms of VR to let the technology evolve and catch up with the times, and that they would be coming back in a few months. Since then there has been little news on Rebecca Minkoff's VR initiatives, suggesting that perhaps the label was too far ahead of the VR curve.
A recent study conducted by Nielsen's Media Lab team found that consumers between the ages of 18-54 feel as knowledge about VR as they do about other popular tech trends, which includes the Internet of Things, wearables and 3D printing. For the study, the research firm questioned 8,000 consumers online on how technology affects their perceptions, by showing them one of 100 different videos, ranging from news clips on VR to brand videos and product reviews to assess their thoughts on VR. Unsurprisingly, the study found that VR currently has more fan than experts, which suggest that although the technology is out that on the market, most consumers have yet to fully in engage with it.
Can VR move past early-tech adopters and become main stream with the fashion industry?
The study also segmented the respondents into categories according to their critical adoption of VR: the PaVRs (Pavers), who are more than likely to purchase VR within the next year and ConVRts (Converts) whose interest in the tech increase with new information, but were unlikely to be early adopters. The Pavers tend to be younger and held higher-than average incomes, making them key targets for publishers, agencies and networks. "Advertisers will be pleased to find that PaVRs are ‘triple-A’ consumers: they adopt new products and service, they advocate for the brands they love and they appreciate premium quality—and are willing to pay a premium price," commented Harry Brisson, Director of Lab Research at Nielsen. However this category only represents approximately 24 per cent of the US population aged 18-54 - making them a small group. ConVrts accounted for even less of the demographic- 20 per cent.
One of the main issues with tech like VR at the moment is ensuring it becomes a success beyond the early-tech adopters - a battle currently being faced by wearable tech such as smart-watches. To ensure VR goes mainstream and is adopted by consumers, retailers will have to overcome a few barriers, such as price. For those seeking out the full experience, home consoles such as the HTC Vive and Oculus Rift may be be out of their price range, costing 899 euros and 798 dollars respectively. For those seeking out the full experience, home consoles such as the HTC Vive and Oculus Rift may be be out of their price range, costing 899 euros and 798 dollars respectively. Cheaper headsets, such as the Google Cardboard and Samsung VR Gear which work in tandem with smartphones offer much more affordable alternatives, but also different VR experiences which are limited to app availability and potentially could hinder VR’s future prospects.
Consumers more willing to adopt VR following 'positive' experience
At first glance this data appears to imply that the majority of consumers are not ready to embrace virtual reality in their daily lives on a wider scale. But during the Nielsen study, respondents were also exposed to publicly available content for the potential applications of VR - ranging from gaming, to health care and art. After being exposed to the content for as little as 2 minutes, over 50 per cent of the respondents showed an increase likelihood in purchasing or using VR technology. The more they learn about VR, the more keen they were to accept it or adopt it. A similar study from Greenlight found from users who had engaged with virtual reality, 86 percent rate thought their VR experience was positive, and were highly likely to seek out another VR experience.
“Overall, we were struck by the strongly positive and broad interest in VR in general, and in specific uses in particular,” said Steve Marshall, senior vice president of research and consulting for Greenlight VR. “Given all the attention in the press, we expected to find gaming as the primary consumer interest in VR. The reality is consumers have a variety of interests in VR — starting with Travel and Adventure.” This sentiment was again supported by data from the Nielsen study, which found that the most effective videos in generating positive results towards VR were not about gaming - they were videos which emphasised personal experience.
It is up to brands and retailers to help ensure consumers embrace VR
The results indicate that although not all consumers are VR savvy yet, they are likely to approach it with an open mind if offered the chance. As VR offers brands and retailers the possibility to reach out to consumers in a new, more immersive and personal way, it is up to them to find a way to help consumers take on the new tech, whether it be by offering live demonstrations in store, online or working together with technological firms to create better, more affordable VR headsets and systems for consumers. Although it may take some time, as even Facebook founder Mark Zuckerberg believes that it will take at least 10 years before VR reaches the mass markets, consumers are open to VR. So perhaps Rebecca Minkoff was right to take a break from VR and let the tech catch up - for now.