After years of research and improvements, virtual reality (VR) has now hit the mainstream. Tech giants like Google, Facebook, Samsung, HTC, Huawei, and many others have been introducing VR devices that bring realistic worlds to life. In the 1990s, virtual reality was mostly associated with science fiction movies and games. Virtual reality is increasingly seen as a technological powerhouse in a multitude of industries, including healthcare, education, training, and retail. History of Virtual Reality and its Future Prospects Before delving into the current role of virtual reality and its future prospects, let's take a look back at how it all began. The first virtual reality device, Sensorama, was used by a cinematographer named Morton Heilig in the 1950s. The Sensorama machine featured a built-in seat used for 3D movies and generated vibrations and sounds to make the users feel as though they were a part of the movie. Since then, many pioneering innovators have been motivated to create new gadgets that deliver a high-quality experience, such as the Oculus, PlayStation VR, and others. Virtual reality use cases VR has several business use cases where it is improving processes, safety, and knowledge in many firms. Retail Ikea: A whole new home and retail VR application In 2016, Ikea launched a one-of-a-kind virtual reality kitchen in Australia, allowing customers to explore a virtual kitchen and visualize its features. This immersive experience was set up to influence the way customers shop for IKEA products. Through this feature, customers could choose different types of fabric, wall colors, and lighting depending on their preferences. This way, Ikea inspires confidence and helps in customers' decision-making. Nike: VR experience in Nike stores Some of Nike’s physical stores are equipped with VR tools. Nike offers clients a virtual reality experience that immerses them in various phases of the supply chain. Customers can scan items such as shoes or apparel to access information about the item. They can also enter a virtual reality environment to experience the many processes in Nike's supply chain and walk through Nike’s manufacturing process. Manufacturing Boeing: The use of VR to upgrade the Boeing manufacturing process Boeing is using VR in the manufacturing of the 737 MAX 10. This experience allows engineers to visualize the manufacturing process, the tools, and the technologies displayed so they can predict potential problems. All of that helps engineers gather data, make any necessary changes, and incorporate these changes into the production system. The company also uses VR for wiring airplanes. Using VR, technicians can readily identify where the electrical wire runs by walking around the airplane, examining the wire renderings in full detail, and receiving instructions hands-free. Renault: The Renault Group's Virtual Reality and Immersive Simulation Center The Renault Group uses virtual reality for vehicle-related virtual design. Virtual reality helps the engineers see the vehicle architecture through an immersive 3D experience and upgrade the designs of the trucks. It allows the designers to test the vehicles without having to make a physical prototype, which saves time and costs and helps in decision-making. Training Verizon: VR to enhance employees' self-defense Verizon, which is a wireless network operator, has started using VR for training to guide employees through dangerous scenarios. Verizon is investing heavily in training its employees. The company is offering self-defense training to teach its employees how to act in case of a robbery or any attack on their commercial shops. Verizon gives headsets to their employees and teaches them how to defend themselves in case of a robbery. This is done by displaying all the steps and instructions to be followed. The future of Virtual Reality in business According to Statista, virtual reality is rapidly expanding. The consumer and corporate VR industry is predicted to exceed USD 12 billion in 2024, up from USD 4 billion in 2020. According to the projections, businesses are very interested in this technology and are willing to invest in it as it saves time and money and allows them to keep up with the market's technological advances. [caption id="attachment_8295" align="aligncenter" width="543"] Consumer and Enterprise virtual reality market revenue wordwide from 2019 to 2024[/caption] VR headset unit sales are expected to increase significantly from 5 million headsets in 2020 to 14 million headsets in 2024. Analysts are also expecting an upgrade to more fashionable, accessible, and small devices. Otherwise, interest is significantly turning to VR in business, which will automatically increase sales of devices and foster competition between the biggest producers to innovate and discover more features that will make the experience more enjoyable. [caption id="attachment_8317" align="aligncenter" width="568"] Virtual reality unit sales worldwide according to Statista[/caption] In conclusion, the transformative impact of augmented virtual reality is unmistakable as it shapes the future, undergoing significant evolution in just a few short years. Leading technology giants like Google, Microsoft, and Sony are at the forefront, investing substantially to innovate and adapt to the rapidly expanding market, exemplified by their investments in augmented VR devices. Succeeding in today's dynamic landscape hinges more on embracing new technologies than mastering traditional processes and value chains. In the fiercely competitive market, companies recognize the pivotal role of technologies in driving success augmented VR not only impacts market size and applications but serves as a catalyst, enhancing sales, building confidence, and facilitating informed decision-making. Explore the vast potential of augmented virtual reality. Sources: Statista Researchgate Usdigitalpartners TechTarget Retailsee Forbes Foundry4 Business.panasonic Demodern
E-concession strategies for luxury brands are increasingly vital, especially as China remains a major player in the global luxury market with consumers accounting for 33% of the global luxury goods spending in 2018 with predictions to reach 46% by 2025 (more than Americans, Europeans, SE Asians and the Japanese combined). Additionally, experts estimate that half of the purchases will be made domestically, driven by a series of moves introduced by the Chinese government including lowering import duties and taxes on luxury goods. Despite the domination of the store-based retail channel in the luxury goods market in China, e-commerce is continuing to disrupt the luxury retail sector through digital platforms, integral mobile apps (Wechat), facial recognition and AI. The penetration rate of e-commerce for luxury products is growing at a fast pace and estimated to reach 13% by 2021 from 5% in 2016. Considering this, luxury players have been questioning on what is the best channel to invest in: Brick & Mortar stores? e-commerce? or perhaps investing in both for a perfect omnichannel customer journey. In the online retail context, Fashion luxury brands have been trying different operating models: brand owned channels, Mainstream B2C channels and Luxury verticals. The chart below² shows how major luxury players are active in brand owned channels, while the participation in marketplaces and e-commerce websites remains low in China: In adopting e-concession strategies, luxury brands globally, and particularly in China, have shifted from a wholesale model to an e-concession model to increase the online penetration. In this model, brands control pricing, assortment and the supply chain whereas marketplaces offer platform infrastructure, tools (product management, secure payment system, etc.) and the customer database. In addition, this model allows a better strategy integration rather than making brands inventory available via the site. In China, major luxury brands partnered with the biggest e-tailers and e-marketplaces (JD.com and T-Mall) on online flagship stores and mobile apps to expand their online footprint: - The Italian fashion house Prada Group has formed a partnership with JD.com, This deal, set in June 2019. Included in this partnership. featuring Prada’s fall/winter collection. - Back in 2015, Tag Heuer, a Swiss Luxury watch brand has also announced an exclusive e-commerce partnership to include the establishment of TAG Heuer's first China online flagship store on JD.com's marketplace platform. - Tapestry, the house of modern luxury accessories and lifestyle brands: Coach New York, Kate Spade New York and Stuart Weitzman announced a strategic partnership with T-mall (Alibaba Group) in adopting the Flagship Store 2.0 which provides the brands with powerful tools to feature customized content, and offer a rich shopping experiences for customers. - Aside from Tapestry, more than 150 brands with products ranging from apparel and beauty items to watches and luxury cars (Alexander McQueen, Chanel, Bottega Veneta, Cartier, Burberry, etc.) are listed in the T-mall Luxury pavilion that was launched in 2017. - Not only brands, but European Luxury e-tailers such as Net A Porter are also capturing the rising wave of the flagship store integration by Chinese marketplaces: Yoox Net-A-Porter signed with Alibaba a joint venture (JV) deal in 2018 to bring its platform to Chinese consumers. Under the deal, Net-A-Porter and Mr Porter launched mobile apps, as well as flagship stores on Tmall Luxury Pavilion. In Europe, Burberry and Gucci approached luxury retailers Farfetch and MatchesFashion for unique e-commerce collaborations: - British luxury label Burberry was the first brand Farfetch partnered with on this basis: For the first time, technology developed by Burberry has been integrated to the Farfetch API – the platform’s operating system - allowing the brand’s entire global inventory to be available through an ecommerce platform. Burberry has since said it’s extremely happy with the results. - Gucci which seeks to boost sales and margins, is also looking to turn more of its collaborations with 3P and multi-brand retailers such as Matchesfashion.com into online concessions, where it controls everything from the product collection and selection to their presentation. Since Chinese consumers are eager for superior and premium experiences as well as innovative solutions, brands and retailers could think of personalized services that add a value to the e-shoppers experience such as Virtual try-on services, matching suggestions performed by AI, 24-hour white-glove dispatch, and distinctive shopping bags. Saad Ibenbrahim – Senior Associate at Infomineo Sources: The Future of Luxury: A Look into Tomorrow to Understand Today – Bain & Company – January 2019 China Luxury Report 2019 – Mckinsey & Company Vogue Business – November 2018 Fashion Network – April 2019 JD.com Blog – June 2019 This Is Money – June 2019 JD.com Press Release – September 2015 CPP Luxury – November 2019 Alizila – January 2020 The drum – October 2018 Farfetch Press release – February 2018 Businesswire – September 2019 China’s next retail disruption: End to end value chain digitization – PWC - 2018
As the GCC retail sector adapts to the transformative potential of Artificial Intelligence (AI), its impact on customer relations and sales is becoming increasingly recognized. Retailers across the GCC are ramping up their AI investments, projecting a global annual expenditure of approximately 7.3 billion dollars by 2022. This strategic pivot highlights the sector's commitment to enhancing retail experiences through technology Artificial intelligence has become a future strategic imperative for retailers. Through enabling process automation, customers’ experience personalization and demand prediction, artificial intelligence can increase overall revenue and productivity. According to Business Insider projections, AI is to increase profitability in retail and wholesale by nearly 60% by 2035. Quick to spot the potential, retailers in the GCC are eying AI and are making considerable strides to push towards embracing technology to enhance retail experience. Three notable examples of large, GCC based, retail groups accelerating AI deployment are the following: Majid Al Futtaim (MAF): Majid Al Futtaim is an Emirati holding company that operates in 15 countries across the Middle East, Africa and Asia. According to its CEO, Alain Bejjani, digitization is a crucial component of the company. Some components of the digitization strategy of MAF are the following: + Build a data-driven knowledge through heavily investing on Data Analytics. Mainly the company is planning to develop “the Majid Al Futtaim Golden Customer Record” by collecting customer and transaction data from its various business units namely Carrefour, Vox and WI-FI, this is in the aim to turn the vast amounts of collected data into results in real time. + Enhance the company’s advanced analytics capabilities through recruiting data engineers and scientists that will integrate the company’s various departments and also launching MAF’s own School of Analytics and Technology that will offer curriculum for nearly 40.000 employees. The curriculum is said to include everyone in the company from the CEOs to frontline workers. + Explore new technologies by partnering with LA based technology company I.am, that will provide MAF with its Omega platform which is an AI powered conversational and contextual voice assistant that delivers deep cross domain knowledge for a smooth customer experience. Al Shaya: Al Shaya is an international retail franchise operator based in Kuwait; it handles around 90 consumer retail brands across the MENA region, Russia, Turkey and Europe. Last year, and as part of a wider transformation plan to enhance operational efficiency and assist ongoing growth and innovation, Al Shaya has agreed on a multiyear partnership with Manthan, a leading provider of AI- augmented advanced analytics. This partnership is to enable Al Shaya to streamline its current businesses by building an enterprise data lake from numerous data sources including back-end systems, customer engagement platforms, HR systems, finance and logistics, in the aim to act as an analytics hub. Overall, Manthan will provide Al Shaya with complete end to end analytics coverage enabling insight-based decision making across the breadth of its portfolio. Landmark Group- Home center: Landmark Group is a Dubai based conglomerate that operates mainly in the MENA region and South east Asia. Earlier this year, the group’s home retailer brand Home Center has started operation in its first fully automated National Distribution Centre in Sudair (Saudi Authority for Industrial Cities and Technology Zones- Modon). The facility is the first fully functional automated Distribution Centre of its kind in Saudi Arabia that operates state of the art AGVs (Automated Guided Vehicles) in conjunction with automated conveyor systems. The warehouse accommodates autonomous driverless vehicles that will help in streamlining processes, and further strengthen Home Centre’s position as the leading home-grown retailer in the region. Beside these three leading retail groups, more and more retailers across the GCC are getting serious about exploring what Artificial intelligence can offer. Based on 2018 Global Consumer Executive of Mind Survey, 40% of UAE- based CEOs in the retail industry plan to use AI in the next two years to enhance store experience. However, despite all the current hype around AI, it is an overlooked reality that to achieve AI’s transformative potential, companies need mature data practices as well as AI expertise. Also, it is primordial to ensure individual privacy which requires from companies to put proper data handling policies to ensure anonymity. Accordingly, it may be regarded as certain that the future of artificial intelligence in GCC retail sector is in a seamless correlation with how realistic retailers are in regard with their preparedness to deploy Artificial Intelligence. Nouha Abardazzou, Senior Analyst Sources: https://www.capgemini.com/research/building-the-retail-superstar-how-unleashing-ai-across-functions-offers-a-multi-billion-dollar-opportunity/ https://www.businessinsider.fr/us/the-future-of-retail-ai-2018-8 https://www.majidalfuttaim.com/en/who-we-are/vision-values https://www.arabianbusiness.com/business/389221-majid-al-futtaim-ceo-plots-path-to-21st-century-retail https://www.arabianbusiness.com/technology/411823-dubai-retail-giant-inks-deal-with-williams-us-tech-firm https://www.alshaya.com/en/about-us/ https://www.manthan.com/about-manthan/pressreleases/212-manthan/1214-manthan-signs-multiyear-partnership-with-alshaya-for-enterprise-wide-analytics http://www.landmarkgroup.com/int/en/home https://www.thehindubusinessline.com/info-tech/manthan-alshaya-deal-for-enterprise-wide-analytics/article25030756.ece http://www.arabnews.com/node/1455521/corporate-news https://www.zawya.com/uae/en/press-releases/story/UAE_retailers_will_increasingly_use_AI_and_VR_technology_to_enhance_retail_store_experience_KPMG-ZAWYA20180814093620/ https://docs.google.com/document/d/1IIc88UDvlA7cAsEQatwvaeh0OmkO_JpKnWLgHWQKG7M/edit
Despite the lack of appropriate electronic payment systems and sometimes limited access to internet, many experts and e-Commerce companies are positive about e-Commerce growth in Africa. According to a report published by Mckinsey & Company in 2013, e-commerce is expected to grow considerably over the next few years : “By 2025, it could account for 10% of retail sales in the continent’s largest economies, which will translate into some US$75bn in annual revenue.”[1] Beside, more and more African and International companies are interested in investing in the e-commerce market and aim to expand their activities in Africa. (more…)
Exploring the Retail Market in Egypt reveals it as one of the Middle East's largest and most dynamic sectors. With a population exceeding 86 million, Egypt stands as a profoundly lucrative market, particularly in retail. The youth population and its continuous exposure to social media is driving the economy; they are educated, open minded and technologically savvy. The obvious social shift has a significantly positive effect on Egypt’s economy. Social changes besides to the emergence of a more financially-comfortable middle class have caused intense shopping behavior. Moreover, “by 2018, more than 72% of households are expected to be in this middle-income bracket”, which represents the key demographic for increased future household spending (Invest in Egypt) (more…)