How will VR change marketing?

Virtual reality is the latest technology to promise a new, ‘disruptive’ means of reaching customers. However, will it demand a change to the way marketers do business? How does VR map against traditional ideas of the ‘five Ps’ and the sales funnel?

virtual reality


A YouGov survey from last year revealed 6% of the UK population owns a virtual reality headset. In terms of penetration, this puts VR ahead of tablet computers at the equivalent time of widespread release. Elsewhere, Statista predicts that the AR and VR market worldwide will exceed $209 billion in the next four years.

With this rise in popularity, marketers are tasked with deciding how to deploy VR technology within the framework of their existing models and strategies.

Virtual reality and the five Ps

 One of the most widely used marketing models is the ‘Five Ps’, which stands for people, place, promotion, price and product. However, how this traditional method of understanding marketing integrates with new technology such as VR, is an interesting concept for marketers.

To begin with ‘People’, brand guardians and marketers usually have a strong sense of the target customer for each product, in terms of age, status, location and set of interests. Whether a VR application will be appropriate and successful depends very much on who it is aimed at. Older customers are less likely to own a headset than a millennial, for instance, and are probably less likely to want to try one in a shop. Applying this aspect of the model leads us to the important question of whether a VR execution is appropriate for the target customer group.

In terms of ‘Place’, VR has opened up possibilities for customers to experience products remotely. For example, car dealerships now use headsets to allow customers to view models that are not on the premises. The B2B world has been quick to adopt virtual reality, and today’s trade shows are full of headsets offering delegates the chance to explore a product before committing to a purchase. In the case of substantial orders, such as for construction equipment or airliners, VR can be a crucial differentiator in terms of building customer trust in the product and checking that it’s fit for purpose.

This is closely tied to the next concept of ‘Promotion’: by transporting users into a self-contained virtual world, virtual reality headsets can capture the imagination like no other technology. The key metric here is engagement – brands are using the technology to deepen the relationship between the customer, the brand, and the product. For instance, Toms shoes, a brand well known for its ethical values, has built a VR experience that enables customers to visit the locations of its charity work, to see the direct impact of their purchase.

Many travel brands have also been quick to spot the potential of VR to communicate the benefits of a given destination, by allowing potential customers to ‘visit’ places virtually before they, say, buy a holiday or book a flight. For example, hotel chain Marriott created a series of VR Postcards, or travelogues, to bring journeys to life to inspire prospective customers.

Similar thinking influences the ‘Product’ aspect of the Five Ps model. Although many people now use the internet for buying goods such as shoes and clothes, one of the largest hurdles to even further adoption of this channel is the basic fact that it’s difficult to get a feel for things on a two-dimensional screen. Of course, VR overcomes this difficulty to a large extent. Chinese online retail giant Alibaba has already introduced a virtual shopping experience, which allows people to ‘shop’ in iconic New York department store, Macy’s.

When it comes to ‘Price’, VR offers the opportunity to innovate in this regard as well. Consumers are used to the idea of ‘online only’ offers, which motivate customers to return to the site in future to get a good deal. Marketers are now using the same principle with virtual reality, offering customers who use the technology special discounts. If customers start to internalise the idea that ‘it’s cheaper on VR’, this is likely to motivate them to use it more frequently for shopping.

Another way consumers are being encouraged to spend more time with the technology is through the development of VR communities. For example, Facebook Spaces can be accessed using Oculus VR, and is designed to be a virtual social space for shared experiences. Although VR communities are in their early stages, as more people experiment with this new form of social networking, advertisers are sure to follow. It’s easy to imagine some brands, such as Red Bull, creating and managing their own VR communities, bringing together extreme sports fans, say, in a virtual alpine skiing environment.

Virtual reality and the sales funnel

The sales funnel is another model used by marketers to describe the journey of a customer from initial attention (A) of a product or service, through to interest (I), desire (D), and action (A). The AIDA model is a useful way of grouping together consumers in relation to a ‘conversion’ or ‘sale’, and helps to direct marketing activity.

Brands are increasingly using the technology to communicate product offerings to customers, activity which largely takes place towards the top of the funnel. By seeing the product in a virtual world, the customer can overcome any barriers to purchase relating to suitability or style.

Certainly, nothing captures and holds the attention of consumers like a virtual reality headset. Rather than your message being lost in the snowstorm of other marketing in the on and off-line worlds, you can be sure customers are receiving your message – and yours alone – once they are experiencing your execution using a headset.

It’s clear that tried tested marketing models such as the 5P’s and the marketing funnel can comfortably accommodate VR. In fact, using these models as a starting point reveals the full range of possibilities afforded by virtual reality, particularly in terms of attracting new customers. It also reveals how many other options are available to deploy this innovative technology in a marketing strategy.

With the CIM Digital Diploma in Professional Marketing, you can develop your strategic skills to implement a solid digital strategy and continue to adapt to new technologies.

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