Facebook Spaces & the risky virtualization of retail

As Facebook pushes into VR with Spaces, columnist and Bitly senior content strategist Blaise Lucey takes a look at how will virtual reality will affect e-commerce and the retail experience.

Facebook Spaces & the risky virtualization of retail

During Facebook’s annual F8 conference — which had to happen seven times before I decided “F8” was a play on “fate,” despite Wikipedia telling me it’s pronounced “eff eight” — Facebook showcased a potentially virtual future.

Facebook Spaces is an attempt by Facebook to create social spaces that are built entirely within virtual reality. Visit places with your friends, virtually. Talk in exotic settings. Organize the next family reunion on the top of Mount Everest. This is one of the ways the social network is trying to leverage the $2 billion purchase of virtual reality company Oculus Rift.

Right now, while you can create an avatar and travel into the world of Facebook Spaces, there is only limited functionality. You can use a virtual selfie stick to take a virtual photo with your virtual friends. You can sketch objects. You can take a tour of different environments. Other than that, it’s pretty much a chat room.

But it made me start to think about how virtual reality could impact the retail experience — especially because the retail experience as we know it is already dying. And then I wondered if, in the future, there will be anything physical at all in the customer experience itself.

Screen shopping

Since October 2016, 89,000 retail employees have lost their jobs, The New York Times reported. More than 8,600 stores are expected to close this year. From RadioShack to GameStop, Macy’s and Walmart, retail businesses of every kind and experience are suffering. And there’s no doubt that it’s because of e-commerce. The e-commerce industry, valued at $400 billion, could grow by 12 percent this year.

Point-and-click has replaced drive-and-shop or walk-and-shop. Yet the customer experience for retail customers is still more immersive. It’s important that businesses don’t forget that a tangible, tactile purchasing journey is still critical. That’s why the average conversion rate for e-commerce websites is about 3 percent. Average conversion rates for in-store purchases hover in the double digits.

With Facebook Spaces and other virtual and augmented reality programs, we may start seeing the virtualization of that same experience. As e-commerce tries to pick up the slack of the retail industry, teams will attempt to mimic the physical with the virtual.

In a sense, this is already what’s happening on channels like Instagram and YouTube and many apparel sites. You can give your measurements for different clothes and have them hand-picked. You can watch tutorials for makeup and fashion tips. If you could virtualize yourself into a store with your friends and try different outfits or look at various products, would you feel more compelled to buy? Or would you feel the same as you do when scrolling through items?

Saving the economy from ourselves

As retail sales slow and stores close, that lost revenue has to be made up by e-commerce sales. That’s placed a frantic emphasis on product page optimization, A/B testing, shopping cart abandonment, button placement and a million other pixel-perfect details.

What experience is e-commerce trying to create for customers today? What is a company like Amazon competing on with same-day delivery and one-click buy buttons?


Facebook Spaces is, at present, a video game with no levels. With worse graphics. The business value could be in virtualizing retail experiences for clients. But if you virtualize it, will anyone log into Facebook with their avatar to shop with the representations of their friends among a crowd of helpful chatbots?

Or will they prefer to point and click?

The convenience of e-commerce has made it more appealing to consumers, but not necessarily more profitable for businesses. By investing in virtual retail, you’re not just competing with the stores in driving range — you’re competing with the world.

The purchasing space

When surveyed, 60 percent of US households said they know little to nothing about virtual reality. While Pokémon Go gives us an example of augmented reality gone right, the paying user base dropped by 79 percent in two months. It’s clear that consumers can be moved and interested by virtual and augmented reality devices and applications, but they are still seen as a nice-to-have.

It’s not the price of VR devices that is going to be most prohibitive for businesses. It’s content and use cases. While VR customers who live in rural areas or are less mobile may benefit from exploring a virtual clothing store, it’s doubtful that this will make companies any more revenue than before. And it’s doubtful there will be a wave of device adoption in those households.

The e-commerce customer experience is defined by optimizing simplicity. Any complication — from page load time to an extra page between the cart and the “buy” button — can scare customers away. Will a store in Facebook Space really be so enjoyable that it improves the bottom line, or will it simply create a virtual horde of loiterers and bargain bin shoppers who seamlessly look for the cheapest deal while ignoring chatbots?

The customer experience is not about channel. Customer loyalty isn’t about product. It’s about content. Until e-commerce businesses create a reason to engage with the brand beyond purchasing as easily as possible, VR will be more virtual than reality.

Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.


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