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Is the world of luxury ready to embrace the possibilities of VR?

An experience is perhaps the only differentiator brands have when it comes to retaining customers, more so, in the world of luxury. And enabling that are technologies such as virtual reality and augmented reality.

What was once our mere imagination, often splashed across the screens in movies (think Minority Report and The Matrix), can be pretty much created today using these technologies. For those not yet completely familiar with the world of VR, here’s the simple breakdown of what VR does – it recreates specific environments which can be either fictional or based on a real-life place and seeks to engage the sensory functions and create a life-like user experience for participants.

As eager marketers rush to embrace the possibilities VR presents for their industries, one question to ask is how VR will impact the elite world of luxury. Given the exclusive reach and nature of luxury, it is still perceived to be largely traditional.

Challenges and Possibilities

But that reality is fast changing. One hospitality brand which has made a substantial investment in VR technology is Carlson Rezidor Hotel Group. The hotel group engaged a globally renowned international design visualisation studio to produce virtual experiences for its luxury hotel line Radisson Blu. Thorsten Kirschke, Asia Pacific president for Carlson Rezidor Hotel Group, told Marketing that VR provided “an immersive and sensorial approach” to its brands which is ultimately “extremely beneficial to owners, investors and guests in visualising their investment and creating brand awareness”.

In May, it launched its VR interfaces featuring Radisson Blu and Radisson RED rooms, social and food and beverage spaces.

“Our technological edge seeks to redefine the design process by providing owners and investors the ability to provide on the spot feedback with virtual walk-throughs. VR delivers value to our partners through a practical, portable tool,” he told Marketing.

The brand hopes to open fresh dialogue and deliver to partners a personalised and experiential engagement, along with a sensorial appreciation of Carlson Rezidor’s brands. The brand has been steadily embracing new technologies for some time now.

In February this year, Carlson Rezidor Hotel Group launched “BluPrint”, a new interior design programme for Radisson Blu’s global portfolio of hotels, followed by a downloadable “BluPrint” app that allows consumers to enjoy a 3D experience and a sneak preview of a BluPrint city or resort room.

“In doing so, we remain nimble and flexible in our drive to stay ahead of changing guest expectations, and capture new audiences to ensure stronger returns for owners and investors,” Kirschke said, adding the response by participants and the media to its new VR offering has been positive. According to Kirschke, developers and owners shared that this technology helped them grasp brand differentiation very quickly and the unique selling points of each brand through each space’s sight and sound effects.

“It also gives them a good inclination of the target profi le of each brand simply by experiencing the headsets,” he added.

Meanwhile, late last year, Shangri-La Hotels also announced the integrating of VR experiences into its worldwide sales efforts. Using Samsung Gear VR headsets across all global sales offices, the hotel chain produced immersive 360 videos for more than a quarter of its 98 hotels and resorts.

“Customers are adopting new technologies at a pace that few brands can match, and nowhere is that technology adoption faster than across Asia. Brands have to evolve at the pace the consumer or risk becoming irrelevant,” said Steven Taylor, chief marketing officer at Shangri-La International Hotel Management.

According to Taylor, adopting VR allows the brand to break down geographical barriers that previously existed between its hotels and guests. This allows potential guests to experience the hotel and all its offers, quite literally, without having to move much from where they are.

The VR promotional videos created by the brand can be watched online on a 360-degree video player; or for a fully immersive experience viewed on a VR headset that uses the Oculus platform. The Oculus powered headsets then enable travel advisors, meeting planners and potential corporate clients to virtually experience Shangri-La Hotels and destinations around the world.

“Virtual reality makes it easier for our customers, clients, partners and guests to book our hotels and that will have a signifi cant revenue impact now and in the future,” he said. “VR is a platform that could empower our sales teams globally and transport our customers to, quite literally, the other side of the world.”

Virtual reality is also expanding rapidly into destination marketing allowing consumers an unprecedented in-depth immersion into local flavours of a city or country. According to Taylor, this means VR opens up doors to reach out to targeted guests who have heard about the brand, but never experienced what it is like to stay at one of its hotels.

As such, Shangri-la decided to first target travel consultants with its VR efforts.

“We wanted to focus our first VR efforts on travel consultants because of the critical role they play in the traveller’s decision-making process and the feedback has been wonderful,” he said.

“We have heard positive feedback from many travel counsellors who have been able to virtually tour hotel rooms to better guide their clients’ choices.”

The brand has also seen a positive response from meeting planners who have been able to experience the Shangri-La ballroom before planning for an event.

A new way of thinking

At a recent conference organised by Marketing, Dane Fisher, managing director of Asia and Oceania at Infiniti Motor Company, said when it came to marketing luxury products, especially in the automotive industry, covering all the touchpoints, along with strong above and below-the line campaigns, are no longer enough.

As such, a new way of engagement is necessary. Also making waves in the VR field is Audi, which integrated VR into its content marketing strategy for its SG50 project as well as the launch of its new Audi A4 during the Singapore Motorshow. The initiative saw more than 6,000 participants using its VR application for SG50 and over 1,200 people experiencing its A4 application during its launch.

According to Anna Bory, general manager of marketing at Audi, choosing to use VR fitted the brand’s progressive mindset which places innovation at its core. It also allowed customers and prospects to experience the brand and its products in a whole new way, complementing its more traditional campaigns.

Both the initiatives, she said, resulted in an increase in brand awareness, social media reach, media coverage and even walk-ins. We are living in the digital age and we need to ensure that the experience we offer to our audience not only matches their lifestyle, but is always on top of the latest trends,” she said. For the SG50 VR project last year, the budget for the execution was only 30% of Audi’s usual media budget. What also helped in creating the campaign, said Bory, was not having a sales KPI.

“Having a sales KPI for such a campaign would have killed the idea. In this way, the pressure of sales was lifted and the team had the freedom to come up with ideas,” she said.

She was also of the view that for luxury brands specifically, not always will every marketing initiative in the luxury industry be about direct sales. She admitted that while there wasn’t a totally accurate science of measuring the impact of the VR campaign, Audi did track the footfall to stores, during and post the campaign, and combined it with on-ground surveys to establish a correlation.

Eventually results indicated the campaign saw a more than 1.85 million Facebook Challenges and possibilities .But with every new initiative challenges are bound to arise. Bory added that ensuring a premium quality and experience, while working under the limitations of current hardware and infrastructure, was one such challenge.

Kirschke said the key challenges for VR lie in ensuring the utilisation of the required engineering and technology advances.

“As it is a fully immersive experience, resolution for the display has to be substantially high, with quick update rates. It is vital to look into various aspects such as surrounding environments, sounds and motion to ensure that serious simulations are incorporated,” he said. But the future remains bright, he added. As more luxury brands jump on the VR bandwagon, more will be done in enhancing the experience of the customer as technology advances. This will not only help prospects gain a more complete access to what a brand has to offer, but do so in a more realistic manner to help informed decision-making.

According to Kirschke, the hospitality and travel market will embrace VR’s strong adoption moving forward. Already plans are underway to have VR technology incorporated into the content offerings of Carlson Rezidor’s other hotel brands.

“We are also moving into the next phase of our exercise to embrace VR in a broader way, and increase product differentiation knowledge with plans to visualise the rooms, meetings and event spaces of our other brands,” he said. Shangri-La’s Taylor added virtual reality is genuinely at the cusp of transforming the way people do business today. Shangri-La is currently looking at partnership opportunities with other travel suppliers.

“We are accepting virtual reality for the revolutionary new sales tool that it is, and integrating it across an entire global sales organisation. In terms of future impact, it’s open for imagination,” Taylor said.

He added VR will become increasingly accessible to consumers as the cost of headsets reduce dramatically, and that means that brands which can create inspiring content, representing unique and aspirational experiences, will reap the greatest rewards. “I think the opportunities here are endless and we’ve only just begun,” Taylor said. For the luxury auto industry, the use of VR will be indispensable, according to Bory. This is more so as the level of customisation that luxury brands such as Audi are offering, increases.

“VR will help to support the sales team at point-of-sales. Maybe one day, virtual test drives are possible,” Bory said.

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