We live in a world where we interact with our smartphones before interacting with family, and the internet can tell us what we need before we actually know we need it. Therefore, it is no surprise that technology is now deemed to be a fundamental need in life. The rate at which technology is developing and infiltrating almost every part of our day to day activities is frightening. One can’t help but wonder when the day will come where ‘old fashioned’ human interaction is a distant memory.
Admittedly, as a human I’m slightly terrified by the developments in the tech world. Something which the marketer in me fully embraces. An aspect of these developments which has gained weight over the past number of years is virtual reality. An ever-growing concept, it is known to many from the success of the virtual app ‘Pokémon-Go’. A sub element of this virtual reality is virtual shopping, this is something Tesco initiated in order to provide the highest level of customer satisfaction in their market of South Korea.
In Korea, working professionals have one of the longest working days in the world. Understandably, this has led to tedious tasks such as grocery shopping being met with “do I have to?” approach in the nation. This is an obvious disadvantage, and the issue was further highlighted when Tesco shifted its focus to the Asian market. This was due to a fall in sales in its domestic market. From here, it completely revolutionised its operations in South Korea, setting the bar high for adapting to the local customer.
Korea: A Smartphone Hub
A study of smartphone ownership rates shows that Korea top the list with over 88% stating they own a device. Tesco capitalised on the mobile usage of the Korean population in order to optimise their profits by shifting their focus from physical stores to pushing online sales. With the staggering figures of smartphone users, it was important to target mobile shopping in addition to traditional desktop websites.
Tesco Korea: Virtual Shopping
The Future of Shopping is Virtual
real world vs virtual reality
Tesco’s rationale here is simple. Why spend money needlessly on funding the opening of new stores when customers can be targeted in the mobile marketplace? And that is exactly what they did. Virtual stores were constructed in subway stations, bus stops and anywhere with a high level of foot traffic. Tesco changed walls into shopping isles with images of products as they are seen in-store. Customers simply utilise their smartphones to scan the QR codes of the products they would like to purchase, adding them to their basket, ready for a quick checkout. From here, the customer selects a convenient time for their groceries to be delivered. Genius, right?
Providing for the Customer
The added value created for customers with this initiative is monumental. Tesco sales increased 130% within three months, in addition to their number of registered users increasing by 76% – a staggering achievement on anyone’s terms. Since Tesco’s success, virtual shopping is now being trialled by Peapod in Chicago along with eBay working on creating the first ever virtual department store.
The way in which Tesco embraced this development in technology in order to satisfy their local market in South Korea highlights the reach and possibilities virtual reality presents to marketers. The value created for both brand and customer is nothing short of fascinating, and shows how putting the customer at the heart of company initiatives is the key to marketing success.
We might soon be virtually feeding our virtual dogs virtual food, which sparks the question – how much virtual reality is too much? Where do we draw the line? For now, though, we can sit back and admire its greatness and opportunities.
