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Leo Burnett Company, Limited
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http://www.leoburnett.ca
+416 925 5997

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How Retailers Can Level Up by Applying Gaming Innovations

VR and AR aren’t just for playing around. Here’s what retailers can learn from gamers, writes Arc Vice President, Strategy Director Fran Diamond

We sometimes cast about for the next “Uber” or the next “Facebook of X.” These new, disruptive companies seem to burst forth to fill a need no one knew they had. But for established marketers and retailers, let’s be real: This kind of transformation is hard.

That doesn’t mean you can’t find new ways to grow. How? Adopt and adapt the most ubiquitous and universal platform that exists today: gaming. While hard-core gaming may conjure images of the stereotypical gamer, remember that the mechanisms and behaviors of gaming trigger all of our reward centers. Inspired by the amazing Internet Trends 2017 from Mary Meeker and the Kleiner Perkins research team, I started to think about how the world of gaming might allow retailers to differentiate their value to shoppers.

As Meeker points out, marketers that look to gaming for innovation and engagement will tap into a mainstream and still growing user base of 2.6 billion gamers worldwide, capturing two generations (and counting) that have been gamified from birth (Gen X and Millennials).

Once-Unusual Game Principles Widespread
The best evidence of gaming tools seeping deep into our experience is that no one talks about “gamification” anymore. Because now, aspects of gaming are simply considered standard customer/shopper experience. Consider:

• Transparency and progress updates let you track your package, your meal delivery, your ride—even your taxes. This ubiquitous feature has its roots in gaming to let players monitor their progress through their gaming environment.

• Recognition, rewards and “level-ups” are now common practice at our favorite coffee and retail shops, such as Dunkin Donuts and Ulta Beauty, to encourage more visits and higher-value purchases.

• Mutual ratings and leader boards recognize not only top performers but also best customers and service providers. And it’s not only tech startups like Airbnb and Uber that rely strongly this feature; even Target has tested a simple thumbs up/thumbs down ratings system for customer feedback on transactions.

• Goal-setting and achievement markers nudge people into being more positive and productive with their lives. While Nike was a pioneer in gamifying behavior, the concept is widely integrated into areas as diverse as energy conservation and personal finance. For example, banking apps encourage savings and highlight areas where users can make small changes for better results.

• Integrated messaging, an innovation from the early days of online gaming, is now baked into every retailer website, and social platforms such as WeChat and Messenger are functioning as messaging platforms for brands.

Next Level Up Gamification
With gamification so standard we barely make note of it, next-level retail innovation feeds into well-known retail trends, such as creating differentiated experience, personalization and geo-targeting. As retailers get to know shoppers through behavioral data, they are starting to use Augmented Reality and Virtual Reality tools to increase shopper enjoyment, time spent in store and spend.

AI and Data Intelligence
Artificial Intelligence has been used in gaming for years to develop how the “game” responds to human players, based on vast data sets generated as part of game play. As to whether the game is truly learning or just offering simulated responses to data points is still subject to debate, but what is clear is we are at the beginning of applying AI to retail marketing. Some thoughts:

• Store layout and design. By measuring and aggregating shopper paths and progress through the store, retail designers can use AI to deliver store floorplans that are more profitable by increasing shoppers’ time in store or allowing them to get more efficiently to purchases they want.

• In-store support and help: Particularly for considered or complex purchases, simple AI interfaces, based on millions of data points, can help shoppers better understand their needs (based on shoppers like them) and direct them to the right product or configuration.

Virtual Reality and Augmented Reality
The Pokemon craze of 2016 trained us to look through the mobile camera for more information than the “regular” world shows us. Now as we see the next gen of Apple’s iOS putting full-on object recognition into the camera, AR will become much more useful and ubiquitous outside of gaming.

AR will be easy for more mainstream retailers to overlay into already existing systems. Some examples:

• Lowes, partnering with Google, is testing a robust in-store navigation tool that allows shoppers to quickly find the products they need.

• Modiface offers virtual try-ons for beauty products by using AR-tricked-out mirrors. Products like these can be customized to a shopper’s individual face or body (for virtual fittings), providing a level of understanding and personalization not currently available.

VR is being adopted and used mostly in gaming, allowing people to go deep into fantastical worlds, getting 360 views and feeling motion and sensation not possible with a console or PC system. Getting VR into retail is a leap for both marketers and shoppers, and it will be slower to be adopted by mainstream shoppers.

However, that is not stopping retailers from thinking about how VR tech can help their online retail can give shoppers more of the feel and fun of being in-store, bridging the gap between “functional” e-commerce and “experiential” in “bricks.”

Some early examples of VR show many widespread explorations:

• Luxury car makers have been working on VR showrooms for a while, and Cadillac seems closest to a true customer beta test.

Alibaba and eBay are creating virtual malls and stores.

• Ikea is testing a system that allows shoppers to design their own kitchens using a VR headset.

Retailers that test and adopt the core principles of gaming, while using the newest tools out there such as AI, AR and VR, will be better able to differentiate from competitors, as they tap into shopper desires for ever-increasing personalization, value, and unique experiences.

Fran Diamond is VP, strategy director at Arc Worldwide.