Omnichannel is no new concept in retail, especially after the outbreak of COVID-19. Brands can no longer rely solely on the brick-and-mortar in-store experience as consumers are now flocking to the internet to shop. Even more so, they expect a unified, customized experience, with 76% of consumers being more likely to buy from brands that personalize experiences across touchpoints, according to McKinsey & Company [1]. Thus, building an omnichannel shopping experience is no longer a nice-to-have but a strategic priority.  

Offline and online shopping: a co-existence  

When e-commerce comes into life and forever changes the retail landscape, doubt remains about how online shopping would end the existence of brick-and-mortar stores. But it is not the question of “online or offline”; instead, they are complementary. Online shopping undoubtedly boomed in recent years and was accelerated by the pandemic. According to UNCTAD, the average share of global internet users that purchase online went from 53% in 2019 to 60% in 2021. Some countries even experienced a sharper increase, such as UAE, doubling from 27% to 63% [2]. Despite such a boom, brick-and-mortar stores remain a strategic distribution channel for retailers. Indeed, nearly half of the surveyed consumers prefer in-store over online shopping, attributed to factors such as the ability to see and feel physical products [3]. What is more, the retail sector is now experiencing a reversal of what happened during the pandemic – in-store sales are growing at a higher rate than online channels (13.4% and 2.2%, respectively). Online-focused retailers, who quickly expanded during the pandemic, now face a capacity abundance [4]. Consumers no longer want offline/online-only shopping; they expect a smooth, seamless and highly integrated experience of both.  

Given the shift in consumer behavior, retailers that invest in a solid omnichannel strategy enjoy a competitive advantage over pure-online/offline players. On the one hand, higher revenue is achieved as omnichannel consumers shop at a higher frequency. According to McKinsey & Company, in the apparel category, omnichannel customers shop 70% more often and spend 34% more than pure-offline shoppers [5]. On the other hand, in most categories, retailers with omnichannel presence achieve organic search as much as twice that of online-only players. This translates to lower investment in paid marketing and an additional profit of up to 5% of sales [6].  

 Global retail giants are already participating in the omnichannel game. Previously online-only brand – Amazon – has now stepped foot in the brick-and-mortal playfield. Amazon Go - its very first offline convenience store chain - makes headlines for being cashierless. With technology such as AI, multi-sensors, and state-of-the-art CCTV cameras, the chain allows customers to shop independently without the hassle of checking out. This also means the company can keep track of consumers’ habits, send corresponding offers and discounts, and offer a customized shopping experience. As a result, brand awareness and customer retention are greatly improved, with 57% of surveyed Americans are excited to see similar tech-enabled stores in their neighborhood [7].  

 AR/VR for an enhanced omnichannel experience 

 Consumers should be the main focus of any omnichannel approach, and AR/VR is the vehicle for brands to become consumer-centric. According to Eclipse, 71% of consumers say they would shop more often if they used AR, and 72% reported making unexpected purchases because of AR [8]. AR/VR bridges the gap between store and home, and with help from AI and machine learning, brands can now engage with consumers in a way never been done before. The pandemic has fostered a new demand in retail - the ability to see and feel a product on a digital platform. With stores closed down, the live, in-store experience had to become virtual, and AR/ VR is the perfect solution to this new demand. Consumers no longer have to take physical trips to the store during a pandemic, yet can still “touch and feel” the products. And this could translate into higher brand awareness, improved customer experience and higher brand loyalty. Indeed, studies show that products that offer interactions with 3D/AR content have a conversion rate of 94% higher than those without [9]. It is because AR helps ease consumer doubts, aid decision-making, and consequently accelerate sales.  

Global brands are beginning to leverage AR/VR technology. The world’s most valuable furniture retailer is already incorporating AR/VR into its strategy and bridging the gap between in-store and online shopping. Combining the technology with its mobile app, the company allows customers to digitally place furniture in their houses with real-time customizations, browsing through 2,000 catalog items right from the comfort of their own homes. The furniture giant even took a step further by launching additional features. With a joint effort by AI and XR (an umbrella term for AR and VR), the company now allows customers to take a full scan of their rooms, virtually delete current furniture and replace them with its products. This helps customers have a full picture of how the new furniture interact with others and fit into their home, hence aiding decision-making without the hassle of physical try-out.  

 Metaverse for retail?  

Metaverse – a current buzzword – refers to an “integrated network of 3D virtual worlds” accessible through a VR headset. It is a fast-emerging space where people can shop, be entertained, and blur the lines between physical and digital life. Given its potential, the metaverse is expected to empower the next evolution in omnichannel retail, with AR/ VR being the key vehicle on that journey.  

Big brands such as Ralph Lauren and Gucci are already on their path of exploring a new business model called “Direct-to-Avatar” (D2A), where they will be selling products directly to avatars - the consumer’s digital personas on the metaverse. Their products are no longer made of atoms but bits and pixels. Even the runway has made its debut on the metaverse. The first ever Metaverse Fashion week was held last March, featuring luxury brands and household names. It is now possible for consumers to sit next to the runway, try and buy any outfit they like in a matter of seconds – all in the virtual worlds of the metaverse. Simply put, companies will not only be selling products on the metaverse but also offer new worlds of virtual experience for consumers. 

 With the incredible success that AR/VR games like Minecraft, Fortnite and Roblox have achieved, the next generation will undoubtedly be familiar and comfortable with virtual worlds. It is only a matter of time until they want to see their favorite brands on the metaverse. Major tech players have already invested billions of dollars into making the metaverse an indispensable part of e-commerce. Hence, a good starting point for companies looking to engage with consumers on the metaverse is to build up their resource pool involving AR/VR,5G internet, blockchain, crypto, and NFTs. It is only a matter of time until the metaverse becomes the new playground for retail, and brands with plans in place from now will take the lead.   


[1] McKinsey & Company, The value of getting personalization right—or wrong—is multiplying  

[2] UNCTAD, COVID-19 boost to e-commerce sustained into 2021, new UNCTAD figures show 

[3] Raydiant, Report: The State of Consumer Behavior 2021 

[4] CNN, Shopping in stores is back and thriving. Here's why  

[5] McKinsey & Company, Ready to ‘where’: Getting sharp on apparel omnichannel excellence 

[6] McKinsey & Company, Omnichannel: It’s time for the online tail to wag the retail dog 

[7] Piplsay, Amazon Go’s high-tech retail: How excited are Americans about it? 

[8] Eclipse, The Impact of AR on Retail  

[9] Harvard Business Review, How AR Is Redefining Retail in the Pandemic 


Author FPT Software