Volumental 3D Scanner

The Next Dimension of Customer Experience: Seven Action Points for Immersive Shopping Journeys

By Filippo Battaini, Research Manager, and Sofia Poggi, Research Analyst, IDC Retail Insights Europe

Why Personalisation Is Important in Today's Retail 

Personalisation of the customer journey is key to successful customer experiences. Failing to make shoppers feel unique results in alienating and frustrating interactions and encourages consumers to go elsewhere.

According to IDC's latest research, 40% of consumers would shop somewhere else if the experience is not personalised. Today's shoppers are channel agnostic and expect to be offered a consistent — and personalised — approach, regardless of the channel. 

Personalising the shopping journey helps retailers understand customers better and tailor their products and services to meet specific needs and preferences. Retailers know the value of providing personalised experiences: according to IDC research, over the next two years 48% of retailers will focus their innovation efforts on acquiring and retaining customers through more personalised offerings.


Expanding Personalisation Through the Third Customer Experience Dimension

The shopping journey continues to evolve as immersive technology becomes part of the customer experience. The "traditional" convergence between online and offline is now complemented by a third dimension — an immersive experience enabled by technology such as augmented reality (AR) and virtual try-ons. Three core elements are foundational to an immersive retail customer experience:

  • Customers: identifying and analysing customers' needs, behaviours and preferences

  • Data: collecting and managing customer data to ensure their needs and preferences are met, and managing that data to ensure accuracy, security and integrity

  • Technology: the likes of AR, virtual reality (VR), digital twins, virtual try-ons and the metaverse are (re)emerging and leveraging data through artificial intelligence (AI) and machine learning (ML) to enhance personalisation of customer journey models

IDC expects immersive technology to contribute substantially to retailers' efforts to improve the customer journey. By 2024, 65% of retailers are expected to invest in visual commerce to enable personalisation through 3D product configurations and virtual try-ons to reduce complexity through image-based interfaces.

How Immersive Technology Enhances the Footwear Shopping Experience 

The shopping experience for footwear and other retail categories can be significantly improved using immersive technologies such as virtual fitting, which combines AI, ML and computer vision to help consumers identify the right fit and make it easier to shop across different brands and channels. Personalisation is key here not just to deliver the messages and content that resonate with the shopper, but also to ensure that the right product is always offered to the shopper.

Store associates and other staff play a key role in the shopping experience. About 60% of consumers surveyed by IDC said they would shop elsewhere if store associates are not knowledgeable about the product or do not provide personalised advice. It's important that customer-facing staff have the right tools to identify customer preferences and needs. This includes AI and cognitive technologies for experience personalisation, which half of surveyed retailers plan to adopt in the next two years. 

By gathering data on the consumer, immersive technology enables staff to provide effective and personalised recommendations. This complements the augmented experience that is increasingly available to shoppers, with 38% of fashion retailers planning to adopt AR and VR for immersive customer experience over the next two years, according to IDC. 

Greater personalisation in the customer journey through immersive technology has clear benefits for brands' and retailers' bottom lines. According to industry sources, retailers that embrace personalisation and product recommendation technology see on average a 20% increase in sales.


How to Provide Immersive and Personalised Customer Experience

Personalisation of the customer experience is essential in today's omni-channel retail and will be even more so as immersive experiences continue to expand. Forward-looking retailers are embracing the third dimension of customer experience by adopting immersive technologies, through which they can leverage data to build effective personalisation strategies by: 

  1. Collecting and analysing data on customer preferences, purchase history and behaviour to better understand individual needs and tailor experiences
  2. Maximising the effectiveness of marketing and communication by using customer data to deliver relevant promotions and messages to each customer via the most appropriate channels
  3. Offering a consistent omni-channel experience by providing a seamless experience across all touchpoints
  4. Using AI/cognitive technologies to suggest products based on individual preferences and past purchases
  5. Offering customised in-store experiences by leveraging immersive technology such as AR, VR and virtual try-ons to provide personalised and immersive shopping experiences
  6. Using conversational AI to respond to customer questions and provide personalised recommendations in real time
  7. Providing personalised customer service by training employees to recognise and respond to individual customer needs and preferences

Knowing each customer's requirements and preferences through an effective personalisation strategy enables real-time, contextual customer journeys and results in a better shopping experience. It also generates positive returns in terms of sales, customer acquisition, customer loyalty and long-term customer value.

In today's complex omni-channel retail environment, companies can't afford to interact with shoppers without developing personalised approaches. With the shopping journey comprising a multitude of interactions and touchpoints with the consumer, being relatable and developing an inside-out knowledge of the shopper is crucial for customer acquisition and retention.