How Virtual and Augmented Reality are Changing Retail Commercial Real Estate Development

BY BRANDI SMITH

The retail industry is changing at an unprecedented rate. Customers are looking for immersive shopping experiences, while retailers are seeking innovative ways to stay ahead of the competition. This is where virtual reality (VR) and augmented reality (AR) come in. These technologies have the potential to revolutionize the retail industry, and, as a result, retail commercial real estate development.

VR and augmented reality AR are two related, but distinct technologies that are transforming the way we interact with the world around us. VR is a technology that uses computer-generated environments to create a completely immersive experience. With VR, users wear a headset that completely blocks out the real world so they can interact with a virtual environment as if they were physically there. On the other hand, AR is a technology that overlays digital information onto the real world. With AR, users can see and interact with digital content superimposed on top of the physical environment, using a device such as a smartphone or smart glasses. While both VR and AR could transform a variety of industries, they differ in their level of immersion and the way they blend the digital and physical worlds.

In the retail industry, VR and AR can provide customers with immersive and interactive experiences. According to a report by MarketsandMarkets, the AR and VR market is expected to reach $114 billion by 2027, with the retail sector being a key driver of growth. Retailers are investing in these technologies to provide their customers with a more engaging shopping experience. Some of the most exciting use cases for AR and VR in retail include virtual try-on, interactive product catalogs and virtual showrooms.

VR and AR are also transforming the commercial real estate development industry. These technologies are being used to design and market new retail spaces, as well as to attract and retain tenants. For example, VR can be used to create virtual tours of retail spaces, allowing potential tenants to explore the space before signing a lease. AR can be used to overlay virtual signage on physical storefronts, providing retailers with a new way to promote their products and services.

“With advancements in augmented and virtual realities, you can expect to see once technology-immune industries like commercial real estate to experience rapid growth in online competition,” said Goman+York Analyst Dave Correia.

These technologies are also helping developers to create more efficient and sustainable buildings.

“Architects can use VR at the initial design phase to test and evaluate different design ideas. This enables more informed design solutions. AR technology can be used for developing virtual design at full scale,” explained Surabhi Kejriwal, Real Estate Research Leader for Deloitte. “The use of virtual components for physical objects can save the current prototype costs. Further, companies can add nuanced details around fixtures and fittings to create a better sense of the finished development.”

However, there are some potential challenges associated with the use of VR and AR in retail commercial real estate development. These include the high cost of implementation, the need for specialized skills and training and the potential for technological glitches and errors.

“Similar to any new technology, companies need to consider the return on investment from potential investments in these technologies,” Kejriwal added. “In addition, companies would benefit from understanding the flexibility and scalability of these technologies at various stages of use.”

While the use of VR and AR in retail commercial real estate development is still in its early stages, the potential benefits are clear: more immersive shopping experiences and new opportunities to attract and retain tenants. As the technology continues to evolve, we can expect to see even more innovative uses for VR and AR in retail commercial real estate development.