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Blog Posts: Retail Law Advisor

Retailers: Embrace Virtual Reality Now (But Also Be Careful)!

We’ve previously addressed the hype that it is only a matter of time until brick and mortar retail succumbs to its online competitors. While we concluded that brick and mortal retail is not in danger of immediate extinction, such retailers cannot ignore that today’s culture requires the incorporation of technology into almost every aspect of the business. In fact, one recent study provides that almost three-fourths of “successful” organizations surveyed indicate that they have made investments in improved marketing technologies, including technologies that enable the organizations to create more personalized experiences for their customers. One of the most exciting – and possibly “game changing” – pieces of technology in the market today is virtual reality (“VR”).

What is VR? Simply put, VR is exactly what it sounds like. The user of a VR headset is placed into a three-dimensional, simulated reality that offers 360-degree views and, usually, interaction with the virtual environment. This technology has the potential to open numerous avenues for retailers to personalize the customer experience. Of course, VR is only as good as the retailers that choose to embrace it. Luckily for those consumers that are waiting for VR to hit the mainstream, some of the biggest retailers are already adopting the new technology. For example, eBay Australia has recently partnered with a large retailer to create, what they call, the world’s first VR department store. Using “eBay Sight Search,” shoppers can browse and select products by simply gazing at the item using the VR headset. A representative of eBay explained that they are not intending to replicate the ecommerce experience in a virtual environment; rather, they are “taking the best elements of traditional retail and expanding on them to improve browsing, selection, personalization and efficiency.” Creating a VR store is only the beginning.  Take, for example, the partnership between Kantar Retail, a leading retail and shopping consultant, and SensoMotoric Instruments, a developer of computer vision applications. The two companies recently partnered to incorporate eye-tracking technology into a VR headset. The VR headset tracks how consumers react to signage, displays, products and packaging. Such data could provide extremely valuable insight on the efficiency of marketing techniques utilized by retailers.

Even brick and mortar retailers are turning to VR to improve the customer experience. For instance, consumers often have trouble visualizing how furniture sitting in a showroom will fit into their living space. Technology developed by Cimagine allows consumers to actually see how the furniture would look if it were placed in their home. VR technology can also have a broader impact on how brick and mortar retailers market their brand.  Tommy Hilfiger shoppers have the ability to wear VR headsets in the store that will provide an inside look into the company’s fashion shows, which in turn influences how those consumers view their shopping experience.

It seems clear that, in the coming years, the retail experience will be influenced by VR. However, retailers that welcome VR must also be weary of the legal environment that is still developing along with the technology. Currently, when VR developers incorporate music, photographs, brand names or logos into a virtual experience, traditional trademark and copyright laws apply. This means that retailers utilizing VR will need to pay close attention to the details of the virtual realities that they create in order to market their brands and avoid intellectual property disputes. The reproduction of another individual’s music in a VR experience , for example, may not seem like a big deal (after all, it’s in a virtual reality), but it could constitute copyright infringement.

While the utilization of VR alone will certainly not determine whether certain retailers are successful or not, the willingness of retailers to adapt to consumers’ ever increasing technological expectations may ultimately determine which retailers continue to thrive. And, of course, all utilizers of VR, including retailers, will have to learn to navigate the evolving legal environment surrounding VR technology.

Updated April 2018: Co-Author Benjamin Kayden is now Director of Legal, DC Office at Oxford Properties Group