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Exclusive—Retailers rank immersive experiences near the top of their investment priorities

The landscape: Fifty-five percent of US brands and retailers across categories will “definitely” increase their investments in immersive experiences over the next three years, per a new Obsess and Coresight Research study exclusively provided to Insider Intelligence.

  • That spending stems from companies’ efforts to distinguish their businesses from their competitors to increase customer acquisition, boost loyalty, bolster conversions, and ultimately, drive growth.
  • The top immersive experience investment priorities over the next 12 months among respondents are: data/artificial intelligence (AI)-enabled content for personalization (average rank of 3.3), virtual reality/augmented reality-enabled virtual try-on (3.4), virtual stores (3.9), virtual events/fashion shows (4.1), social shopping (4.3), livestreaming (4.3), and gamified shopping (4.6).

Zooming in: Four key areas—virtual stores, AI-empowered content for personalization, gamified shopping experiences, and social shopping—provide a window into the fruits that experiential investments are bearing for brands and retailers.

  • Virtual stores. Sixty-one percent of all surveyed companies have invested in virtual stores, similar to J.Crew’s virtual beach house and Ralph Lauren’s Beverly Hills Virtual Store. Those investments paid off as over nine in 10 (91%) generated significant or moderate increases in online sales.
  • AI-empowered content for personalization. Seventy-one percent have invested in this area, which uses AI to more effectively segment audiences based on customer data. Of those, 64% saw a bump in their click-through rates, 65% saw time spent rise, and 61% saw their Net Promoter Scores increase.
  • Gamified shopping experiences. Forty percent have invested in the channel, which comprises a range of experiences including feature points and rewards, challenges and missions, virtual currency, and interactive quizzes and polls. Gamified shopping experiences can significantly increase time on site as 70% of those that invested in the channel saw time on site increase.
  • Social shopping. Sixty-five percent of all surveyed companies have invested in social shopping, which includes features that enable shoppers to invite friends to shop together and avatars that replicate real-life shopping interactions. The benefits have been particularly pronounced for non-fashion retailers as 35% saw a “significant increase” in online sales (compared with 15% of fashion retailers) and another 49% saw moderate gains (compared with 48% of fashion retailers).

Why it matters: It makes sense that retailers and brands are increasingly looking to immersive experiences to help them stand out and deepen their connections with consumers.

  • That’s increasingly important given Amazon and Walmart’s outsized share of retail ecommerce sales. Our forecasts expect Amazon will account for 37.6% of US retail ecommerce sales this year, and Walmart will make up another 6.8%.
  • The companies that will realize the greatest gains are those that implement experiences aligned with their customer bases’ behaviors and interests.