Facebook Inc (NASDAQ:FB) is spending billions of dollars in virtual reality in order to get its Oculus Rift headset ready for launch early next year, but those with shares in the firm still aren’t sure how Mark Zuckerberg and his team plan to make money from the device. Demand is thought to be restricted to a small group of hardcore gamers, but that may be changing.
SapientNitro, teamed up with the The Line, a luxury clothes firm, in recent days in order to show the power that VR might have in online shopping. The demo used a Samsung Galaxy Gear VR headset, but Facebook is the firm with the best advantage in the world right now. Facebook, which is getting into online shopping, will be watching the market closely.
Buying real items in a VR world
The demo allowed a user to walk around a VR store and look at items. When their gaze fixed on a certain piece, all of the info related to it comes up, and the user is allowed to look at the item from all angles. Another demo allowed users to put clothes on an avatar and study them before making a purchase.
The idea shown off by the ad agency and the clothes store is a little clumsy, and relies very heavily on Skeuomorphism, the design doctrine that takes cues from the past designs even when they’re no longer needed. Facebook should be able to come up with something that puts the needs of the user ahead of archaic design and it could be the firm’s big move for E-commerce in the years ahead.
VR, like that used in the Oculus, could help to solve some of the problems inherent in online shopping such as not being able to see how a piece of clothing will look on a person exactly. With its advanced AI solutions and its VR offering Facebook could reduce those problems considerably and take a cut of sales at the same time.
Facebook could, for example, use 3D object recognition tech to create better measurements, both for customers and items of clothing. That could be used to inform the wearer of the fit of a dress or a pair of jeans, and show them how it will look on a model of themself.
The uses of VR and AI tech in online shopping are endless, and Facebook research teams will do a much better job of getting there than an ad agency and clothes boutique.
Facebook learns to make money in VR
Facebook spent $2 billion getting the Oculus Rift and it’s spent more again making the device ready for the market. When it arrives next year it will be used to play games and little else, but that could change and it could change very quickly.
There are some clear uses for VR tech in the world of shopping, and it’s one of the most obvious ways that Facebook can get a large cashflow from the space. The games market is a fickle one and relying on gamers to fund the Oculus into the future is a risky strategy.
Gene Munster of Piper Jaffray doesn’t expect VR to do much for Facebook in the short term, but there is real opportunity beyond that. In a recent report he wrote, “Although Oculus Rift won’t have a meaningful impact to earnings for the next couple of years, we believe this is the first step for virtual reality and we believe the Next Mega Tech Theme Is Virtual Reality.”
Facebook needs to show its shareholders how it’s going to use its investments in the area to boost total sales, and e-commerce may be the first big boost for the firm.