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Kevin  Root

Kevin Root Founder

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Virtual Reality – 70% Would Choose A Retailer Site With It Over One Without

Google, Apple and Microsoft are all reported to have large scale Virtual Reality projects in development. Google had announced that their Daydream VR platform will join Facebook’s Oculus and Samsung’s Gear VR in the mobile platform provider space.

Google’s announcement is significant. As a platform provider, they have the ability to create a standard – a kind of Android operating system for VR. This will likely lead to more mainstream adoption by developers and consumers and that will usher in a whole new marketing tool for a variety of retailers including automotive OEMs – and dealers.

Much has been written about how the automotive OEMs are using or plan to use Virtual Reality. Audi rolled out their VR system at CES this year and reports they will install the system in a number of locations worldwide. Volvo already offers consumers the ability to take test drives of the XC90 using Google’s low cost Cardboard VR headset and Toyota let visitors at the NY Auto Show test safety features using VR.

So is VR the next marketing fad or a serious tool? The answer may lie in how consumers feel about using it. We set out to answer that question and in March, Root & Associates agile research team put it to a panel of 700 in-market car shoppers.* We wanted to go beyond the gee-whiz factor of a pretend drive along a curvy coastline and understand if VR could provide actual value for real vehicle shoppers.

The scenario we developed involved a consumer downloading a dealer-provided VR app to their smartphone which enabled them to walk around the vehicle, open the back doors of a sedan, look at the grain of the leather and the stitching on the seats, then reach for a virtual child’s car seat and put it in place. Then get into the back seat next to it and evaluate the amount of available room. Next they could compare another model the same way – all from the convenience of their home or office.

64% of in-market car shoppers said they would definitely or probably use it while only 20% said they would not.**  More importantly, 70% said they would choose a dealership website that offered this capability over one that did not.**  Some sub groups, including Asian Americans and IT professionals, were decidedly more likely to feel that VR-assisted shopping could help select a dealership from which to buy a new car.

Our study also found that consumers with higher levels of education and those with children expressed even more interest in VR-assisted auto shopping. The stated benefits center around the convenience of narrowing down a make or model before arriving at the dealership.

So while VR today is more of a novelty than a marketing tool, what are the real chances of seeing widespread adoption? That will rely on consumers acquiring headsets. Bloomberg’s Intelligence analyst Jitendra Waral estimates that headset sales may top $1 billion this year and reach $21 billion by 2020. This is something that has not escaped the attention of leading auto technology providers. “It could happen as early as late this year or next year” said CDK’s Max Steckler, VP Global Product and Solutions, when asked when he thought VR-enabled dealer websites might become reality. “Content will drive the best consumer experiences for the foreseeable future” he added.

Why would dealers want to embrace such a tool? Efficiency. Savvy dealers are actively looking for ways to reduce the time consumers have to spend in the dealership to purchase a car. VR-assisted shopping has strong potential to help consumers greatly narrow their selection before they arrive at the showroom, which will improve overall efficiency for both sales reps and shoppers.

My bet is that we will see VR-enabled marketing tools at more than one booth at NADA in 2017.  Time to expand the marketing tool belt.

Cheers,

Kevin

Read more of my analysis on my Insights Blog.

**Source: Root & Associates, Agile Insights, Automotive Website Concept Evaluations March 2016

Tori Zinger

I think this is super-cool; I would definitely use it when first scoping out vehicles of interest to determine which dealerships to visit, but I don't know that I would trust a "virtual test drive."

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