To many, Virtual Reality (VR) is a thing of the future… one of those fads that seems too futuristic to already be impacting people's lives, and many don’t realise the incredible potential of something that’s already become a futuristic reality of today.

I’ve found it’s already a huge space, and one of the most fast-paced and emerging areas for innovative marketing, and it’s set to explode. Offering exciting opportunities and adventures in not just marketing, business and technology, but across the board, and has already proven to benefit most industries in very unique ways.

This blog post will bring you up to speed on the VR environment at present, explaining where it began, where it’s at so far and its future direction.

To start, there are three main types of new ‘realities’: Virtual, Augmented and Mixed Reality. I’m going to explain each one and bring in relevant marketing examples where possible. I’ll start with the most well known…

What is Virtual Reality?

It’s the term used to describe a 3-D, computer-generated environment, which can be explored and interacted with by a person, currently achieved through wearing a Head Mounted Display (HMD).  The person becomes part of this virtual world or is immersed within this environment and whilst there, is able to manipulate objects or perform a series of actions. Think of it as the Matrix where you can ‘plug-in’ and be ‘in’ the game. It’s also used in the context of simulating presence in the real world (like watching a sporting event live).

When did Virtual Reality really become ‘real’?

The current age of VR began in 2010, when Palmer Luckey, a Californian teenage inventor who amassed an extensive private collection of around 50 different HMD’s, created his first VR Headset prototype called ‘PR1’ in his parent’s garage at the age of 17. This has gradually evolved into what’s known today as the ‘Oculus Rift’.

2 years later in 2012 he launched a $250,000 Kickstarter campaign to help develop and commercialise it, and raised $2.4 million!

2 years later again, Mark Zuckerberg bought the company for $2bn saying virtual reality could be the next big social platform and connect more than a billion people.

What’s the driving force behind Virtual Reality?

The biggest current influence is coming from the Gaming and Entertainment industry, where there are two main types of VR experiences:

Cheap Thrills – Mobile VR

The first is a cheaper, lower quality and less immersive experience that uses VR apps on your mobile phone, which is then held in front of your eyes by a specially designed headset. Through the use of the phone screen and inexpensive lenses it produces a basic VR system. It offers a less immersive experience due to a much lower quality and lack of what’s termed ‘positional tracking’ which is the ability of the device to track your head’s position in a room. This tracking is critical for highly immersive experiences. As a battery-powered device the power drains too quickly from this to make it viable, unlike the tethered headsets.

It is however much more accessible due to the device being your mobile, which is already in the hands of millions of consumers, which makes it a much more realistic avenue for marketers and businesses at this stage. The key mobile headset competitors are Google Cardboard, Google Daydream and Samsung Gear VR, explained in more detail below.

Google cardboard

As simple as it sounds – Google cardboard is a design that uses 2 Bi-convex lenses in a cardboard frame that holds your phone in place, and can be bought online for about £12, or you can make it at home by downloading the kit on Google’s site. Your phone needs to have a gyroscope to work and overall experience is obviously poor but a cheap and easy introduction nonetheless.

Google Daydream View

A smarter, comfier and higher quality product (£69) from Google, except you will need to have 1 of only 2 Daydream-ready phones: the Google Pixel and Motorola Moto Z.

Samsung Gear VR

Partnered with Oculus and using Oculus apps for gaming, this is Samsung’s successful product for mobile VR at £99 for the newer 2016 model. Requiring the latest Samsung Galaxy phones only hasn’t stopped it being one of the most successful VR headsets on the market from sales numbers so far.

The Mind Blowers – Computer Connected VR

The more expensive, but much higher quality VR experiences are coming from the likes of HTC Vive, Oculus Rift, and Sony PlayStation VR.  These highly immersive experiences are achieved through a much more technically advanced HMD that is connected to either a high performance PC or a game console to create a truly impressive move-around or walk-around virtual space, where you can interact with your surroundings.

For tech heads, tech lovers and fans of trying the ‘latest and greatest thing’, here are the 3 most well-known premium VR headsets on the market today:

HTC Vive

At £659, it’s a full system VR experience that requires a powerful PC to run, but means you’ll get a state-of-the-art, highly immersive experience from 32 headset sensors providing 360° motion tracking, a 110° field of view for captivating immersion, eye-popping graphics with smooth action, and two handheld motion tracking controllers… just to name a few specs. With ‘positional tracking’ you’ll need (and want) an empty room to roam around and play in, and is necessary for the infrared sensors setup.

Oculus Rift

So this is Palmer Luckey’s VR baby, bought by Zuckerberg for $2bn. The Rift is one of the most exciting VR systems you’ll find. However just like the HTC Vive it requires a beefy PC to connect and power it. At £549, the standard package is at the moment around £110 cheaper than its rival, and does include an Xbox One controller, but you’ll want to splash out the extra £189 for the Touch Controllers to get the full interactive experience.

With some people requiring expensive PC upgrades like a new Graphics Processing Unit (GPU) or Visual Processing Unit (VPU), together with a powerful Central Processing Unit (CPU), things can get costly, but one of VR players’ main goals is to drastically reduce these power requirements and obviously their prices. Recommended minimum PC specs can be found on the official websites, and ready built, high-performance VR PC’s are taking the market by storm.

PlayStation VR

This more affordable introduction to VR costs £349 and uses the PlayStation 4 instead of an expensive PC gaming rig like HTC Vive and Oculus Rift. It’s had impressive reviews and feedback with near PC-quality performance and some great games out already. You will need the PlayStation 4 Camera (£40) as well, and can opt for PlayStation 4 Move controllers (Twin pack £69.99).

Microsoft’s partners breaking into Virtual Reality

Microsoft’s partners will also ship new lines of VR headsets or (Mixed-Reality HMD’s – explained later) to take advantage of the ‘Creators Update’ for Windows 10 with VR and holographic capabilities. So not specifically gaming, but headsets are said to be coming with the update in early 2017 from Acer, Asus, Dell, HP and Lenovo. Rumoured to start at $299 they will bring VR into mainstream in a way Oculus and HTC can’t.

‘Inside-out six-degree-of-freedom sensors’ means they can track their own position with internal sensors with no base stations or dedicated VR spaces which sounds good… a less powerful, roughly $500+ laptop is required and controlled using voice and hand gestures, 360-degree coverage and HoloLens controls all sounds even better… but it’s a shame the common tethered connection is still there. The future wireless goal is obvious here.

Futuristic body suits, haptics and kinaesthetic communication

Recreating the sense of touch by applying forces, vibrations, or motions to the user brings one more of the five senses into play, making it more immersive, and more realistic. These higher levels of immersion are what Marketers desire as immersion ultimately leads to conversion.

Tesla Suit

Tesla Suit lets you feel what you play with full-body haptic feedback for VR. It uses electrical stimulation to imitate anything from an explosion to in-game weather through it’s wearable ‘suit’. Check out their Kickstarter campaign video here.

Leap Motion

The Leap Motion Controller lets you literally reach into the virtual world by sensing your hands moving naturally in 3D. Check out the impressive Orion video here.

5 of the Best VR Marketing Campaigns

1. Marks & Spencer – VR Homeware

To promote one of M&S’s new ranges, consumers were able to wear VR headsets using Oculus Rift and Leap Motion technology, and could drag and drop items from the M&S LOFT homeware ranges into their ‘ideal living space’. Shoppers were able to share their designs via email or social media and the range was available to purchase on their website.

2. Marriott – The Teleporter

Using a VR headset and a telephone-booth-like structure, Marriott did an eight city tour of the USA transporting people directly to anywhere in the world, from a beach in Hawaii to mountains in New Zealand, totally immersing them in their dream destinations. Showcasing to consumers they have hotels all over the world, and wherever you go on holiday, it subtly reminds you Marriott is there for you.

3. Merrell VR – Trailscape Hike

First commercial use of walk-around VR using a medium sized room. People walked around as if they were hiking on the edge of a mountainside with rocks and boulders falling all around them as they moved. They experienced the adventure and excitement of climbing rugged mountains and related it to the brands well renowned climbing apparel.

4. Volvo – VR XC90 Test Drive

By wearing the headset people were transported inside Volvo’s brand new car on a test drive through scenic country roads, getting consumers familiar with the inside of the car, and making them have the excitement that a new car can provide, to try and help them sell more. It gained a mass of views online and loads of press with good reviews on the app.

5. Topshop – Catwalk VR Experience

One of the first VR retail experiences offering its members a unique front row experience of their exclusive fashion runway show during London Fashion Week. The experience won Project Of The Year by BT Retail Week Technology Awards and Best Virtual Event by The Event Tech Awards. It gained a huge amount of press and had hundreds of attendees producing very good publicity.

A serious VR future for e-commerce giant eBay?

Myer and eBay teamed up to make the ‘World’s First Virtual Reality Department Store’ for Australia. The gave out 20,000 Google Cardboard “Shoptacles” and users could view 12,500 products on the app, but only 120 products were shot and rendered in 3D to get an impressive 360 degree view.

Fairly easy to use but a slow user experience. Product images look ‘digitalised’ not high quality demanded today in order to bestow confidence and sell products well. It worked through recommending products, which are usually very loosely related, and you still had to pick up your mobile for final transaction so buyer process not fluid enough.

eBay’s eyes are set mostly on analytics from the ‘shoptacles’, like browsing data, dwell times and how the app can be personalised to show different results for different users, features which it says are “more credible” when gleaned from VR.

“We believe the next channel for retail will be virtual,” said Steve Brennen, eBay’s senior director of marketing and retail innovation. “We don’t build gimmicks…If retailers in the future are going to have an omni-channel strategy, it will include retailing a virtual world.” This proves the importance eBay is putting on VR in retail.

Early VR adoption hints VR as Shopify’s future?

The e-commerce platform giant has shown a key interest in early adoption of VR in e-commerce. They have developed their first VR e-commerce app called “Thread Studio” only available on the HTC Vive. Designed for testing T-Shirt or merchandise designs/logos with a virtual studio you upload designs and lay them out on 3D, pose-adjustable mannequins. App then saves print-ready files to send to print-on-demand provider, Printful.

Unlike online shirt customizers that just overlay your image on a 2D photo of a shirt, Thread Studio uses 3D shirts modelled to real proportions, so what you see in VR is closer to what you will get in real life.

VR as Google’s future?

What’s the last company Google acquired?

Eyefluence in October. They’re an impressive tech company that enables users to use their eyes as a mouse and make selections just from their eye movements. This could prove massively beneficial for e-commerce VR and current usability issues. This eye-tracking capability has more technical uses like ‘foveated’ rendering which uses your eye’s focus point on a high-density display to selectively choose areas on the screen out of focus where it can then display images at a lower-resolution, saving energy and helping lowering performance requirements.

What physical product did Google launch in October?

The DayDream VR headset.

What was the most exciting feature that YouTube (and other platforms) rolled out?

360 video.

VR as one of the most disruptive technologies

VR is a disruptive technology and for good reason. Below are just a few examples of its application to multiple industries:

Military Training

• Flight simulation.
• Battlefield/combat simulation.
• Medic training (battlefield).
• Vehicle simulation.
• Virtual boot camp.

Healthcare

• Streamed VR 360 degree surgery for medical student training.
• Medical Realities conducted the world’s first virtual reality live-stream operation, and was a huge success reaching people around the world, from China to Tunisia!
• PTSD and phobia treatment – exposure therapy to scenarios.
• If the patient has an affected limb, MindMaze can use VR/AR set-up to trick their mind into visualizing their movement, and then carry out simple actions like reaching and grasping. This process can literally teach the brain how to use the damaged limb again, and speed recovery.

Real Estate

• Virtual rooms, homes and tours.

Films and Entertainment

• Cinema in every house by putting on a headset.

Travel and Leisure

• Hotel virtual tours, holiday and hotel locations viewed through headset.

Sport

• Viewing in 360 degree front-row, prime-spot.
• Training teams and recreating the action in VR.
• Viewing from players perspective.
• STRIVR – human performance training from businesses to sports teams – creates VR training videos shot from the player’s eye-view of the action during practices. It then enables players to receive realistic, repetitive training by visualizing through VR headsets situations they will face on the field. For instance, quarterbacks can review the options and opportunities they missed by going through a play several times and reviewing each of their teammates’ positions.

Fashion

• Virtual and front-row seats to fashion shows (Topshop’s campaign), virtual stores and shopping malls.

Education (employing Leap Motion technology especially)

• Biology, anatomy, geology and astronomy.
• Virtual trips taking students anywhere on the planet.
• Recreate historical and natural sites.
• Engage, interact and integrate people and students all over the world.
• Aid learning through virtual worlds.

‘Augmented Reality’, is it any different to VR?!

Augmented Reality (AR) is the process of superimposing computer-generated images onto a real world object you’re looking at in front of you with the aim of enhancing its qualities. Pokémon Go may spring to mind, and its recent success has proven how engaging AR is to consumers and the success it can bring… $2 million dollars a day success!

A typical AR experience is likely to be a lot less exciting than meeting a dragon or flying a spaceship immersed a newly imagined world like VR, but it’s argued that the potential market for AR applications is actually a lot larger than VR’s.

Very basic ideas for e-commerce can be placing virtual vouchers or celebrities around cities offering special discounts and offers to generate engagement and buzz for brands.

IKEA’s successful head start in AR e-commerce

Although in its early e-commerce stages, we’re already able to superimpose a piece of furniture into our homes using IKEA’s AR catalogue allowing for more efficient, faster transactions with potentially fewer returns. They created an AR feature on their app that allowed customers to view and place 3D virtual products into their own homes. Allowing customers to see how their home could look with these products helps eliminate guesswork but adds certainty that the product is suited for their home.

Consumers can now test if shades of make-up suit their face with Shisedio’s makeup mirror, and even try on a pair of new trainers without even taking their shoes off with Converse’s shoe sampler.

Google doing the AR Tango

Lenovo shipped the first Tango-enabled smartphone in 2016, the Phab 2 Pro. Tango technology from Google introduces depth sensing, computer vision and room mapping to devices, which together enable for new and improved AR apps and utilities. It removes the need for trackers or markers, and gives more stable AR viewing.

Wayfair, an American furniture company, was one of the first big retailers to release a Tango-enabled app. With WayfairView, similar to IKEA’s app, customers can superimpose furniture into their home before purchasing.

‘Mixed Reality’?! What is that?

For me this is where it gets most interesting and exciting. This is the least well known of the trio right now, but ironically may have the easiest road to mainstream consumer adoption if the tech works as advertised.

In theory, Mixed Reality (MR) lets the user see the real world like AR, while also seeing believable, virtual objects like VR. It anchors those virtual objects to a point in the space you’re viewing around you, making it possible to treat them as “real”, at least from the perspective of the user viewing the MR experience.

Microsoft’s less goofy looking HoloLens is the front-runner for MR devices, according to Microsoft it seamlessly blends high-definition holograms with the real world, improving the way you do things every day, and enabling you to do things you’ve never done before… here’s their very impressive promo video.

As exciting at it looks, the development edition will set you back £2719 so prices certainly need to come down in order for mass adoption to take place.

Rumours are also out Apple will reveal a pair of AR/MR smart glasses in 2017, and San Francisco-based Osterhaut Design Group (ODG) recently unveiled its two latest products, the R-8 and R-9 smart glasses, both capable of a wide variety functions like displaying high-quality video and most features offered by any high-end Android tablet. Both said to be available in the second half of 2017 at $1,000 and $1,799 respectively.

Current Issues with VR for Marketing

1. Cost and Quality

Requires consumers to have access to a quality headset, which is prohibitively expensive for most, and consumers less likely to buy ‘digitalised’ products. Marketers want to offer the most immersive experiences, which the more accessible, cheap and poor quality VR devices don’t produce yet.

2. Weak VR Content

For the most part VR Content is weak because it’s only commonly hitting 2 of our 5 senses (visual and audio) and even those senses are 1995 Internet at best. There is also a lack of VR content at present but as popularity and publicity increases for VR, so too will VR content.

3. Need Simple Monetisation Methods

Easy monetisation of objects or services needed in VR. How can we quickly collect payments for things consumers buy or use to get information, and process them right from the headset?

4. Larger VR Distribution

Until VR becomes mainstream and everyone has their own VR headset at home, V-commerce will remain a virtual possibility.

5. Vertigo and Motion Sickness

VR headsets are a cause but much fewer cases with higher quality devices.

6. Requires Investment by Stores

It’s taken decades for a lot of bricks and mortar stores to successfully provide decent quality e-commerce stores. Even now, many of these offer relatively unsatisfactory experiences.

The significant investment level required to build top quality v-commerce experiences could be a big obstacle in an industry with traditionally slim profit margins.

7. Do We Really Need VR?

The beauty of e-commerce was that you could order a book or a dress while on your lunch break – it was quick, efficient and easy and it filled a big need – people didn’t have the time to visit physical stores to shop.

Maybe v-commerce doesn’t fill an obvious need (at the moment) in the way e-commerce did.

Method in the Investment Madness

There was an insane amount of Virtual Reality funding in 2016, but why so much? Here’s a few statistics:

•  AR/VR revenue forecasts by 2020 range anywhere from between $50bn to $150bn.
• Digi-Capital forecasts that the AR and VR market will hit $120 billion in revenue by 2020.
•  Goldman Sachs predicts it will be an $80 billion market in 2025.
• Pokemon Go earning over $2 million a day – the fastest game ever to reach $600 million in revenue, which it did in just three months.
•  AR and VR investment reached $1.1 billion in the first 2 months of 2016. More than 2015 in total.
• VR market is now ripe for transformation in 2017. Developers, consumers, investors, and hardware makers have a host of options from which to choose, each with their own strengths and shortcomings.
•  Killer App catalyst – the environment is poised for the first killer VR app to hit the market sometime in 2017, which will be a major catalyst for consumer adoption of VR hardware.

‘Magic Leap’ of Faith – the top secret billion-dollar Mixed Reality start-up

MR’s highly secret start-up Magic Leap now has a $4.5bn valuation after possibly the largest C round of funding in history, with no commercial product launched – just 2 videos!

Investment came from some of the biggest names: recently Alibaba at $794million, Google, Qualcomm Ventures, Warner Bros, J.P. Morgan, Fidelity, Morgan Stanley, T. Rowe Price.

Summary

This scale of investment doesn’t happen for a ‘fad’, it proves the importance being put on Virtual Reality in the world today and the obvious position companies are taking in preparing themselves for a VR, AR and MR future in not just business, but everyone’s daily life. It’s already stretched its reaches into multiple, and many otherwise unrelated industries, and is being applied with highly beneficial, yet futuristic capabilities that many people still don’t know exist. The future of VR is an exciting prospect and it’s only just beginning.