The challenge of implementing virtual reality in business demands “more design thinking, less German engineering”. That’s one of the findings from the new German Brands Report 2017 – Virtual & Augmented Reality. The report’s co-author, Alexander Schröder, presented key findings at last week’s EACD Debate in Munich. Alexander spoke to Communication Director about how VR is set to change business communications, what his research tells us about the CEO perspective on VR, and why first-hand experiece should be the first step in implementing VR.
One of the audience questions at the Debate was whether we can be sure that virtual reality is here to stay, and not just a trend like Second Life. How do you answer that question?
New technologies and applications come and go. Only the ones that create an added value for consumers or businesses break through. VR has already been around for several years and moved out of the experimental phase. Today there are many examples that demonstrate that VR has the power to create immersive experiences, influence buying behaviour, reach out to a global audience, reduce costs, save time and create new business models and revenue streams. That’s why companies like Microsoft, Samsung, Google and Facebook are investing billions in this industry. These investments are increasing market penetration and bring down costs for VR equipment. Second Life never really moved out of the experimental phase or gaming sector, because it did not solve any problems or offered better solutions to anything.
Your report Deutscher Markenreport 2017 – Virtual & Augmented Reality states “VR will change marketing and communications”. Can you give us some concrete examples of this?
VR will change the way people interact with brands. Car buyers will test drive their new cars on the Pacific Highway. Travellers will check hotel rooms before they book them online. High potentials will meet the CEO in her office before they decide to join the company. Customer service will be more personal than ever before. VR will make this possible for an unlimited number of people all over the world. New touchpoints and applications will replace existing ones. Technology and content partnerships will pave the way for multi-brand platforms and new ecosystems. All these relationships need to be managed across all markets and channels. Marketing and communications must adjust to this. Communication and storytelling will become more important to connect people, products and brands.
Among other questions, the report asked CEOs how they believe VR will influence their businesses. Can you sum up the CEO perspective for our readers?
Many CEOs know that VR will influence their business. The key question is how they can benefit from the new technology. They understand that it is important to move fast. The internet showed many CEOs what happens when you just wait and see what happens. They won’t make that mistake again. Quite a few companies are already developing new VR-driven business and revenue models to stay ahead of the game. The lack of experience and expertise is the biggest bottleneck. CEOs know that this needs to change.
For anyone reading this who is excited by the possibilities of VR and wants to see it in use at their company, what should their first step be?
First, you need to personally experience VR. You will not understand the opportunities VR brings without personally experiencing it. Second, you need clear, overarching objectives and ideally corresponding KPIs for your VR initiatives. This helps to justify investments, to manage the development process and to avoid isolated solutions. Identifying opportunities to create value for your customers along the customer journey is key for successful VR applications. Don’t overengineer ideas and applications. Build prototypes to test and learn quickly. Focus on customer value and not on technology. Our Virtual Reality Future Lab does just this and offers a jump-start into the VR world.
To read key insights from Deutscher Markenreport 2017 in English, click here.