Virtual Reality's Effect on E-Commerce Business

This article discusses the potential impact of virtual reality on the e-commerce industry. It explores the opportunities and challenges of implementing virtual reality in online shopping platforms and how it can enhance user experience. The research methodology includes analyzing existing literature and research on the topic.

Running head: VIRTUAL REALITY’S EFFECT ON E-COMMERCE BUSINESS
VIRTUAL REALITY’S EFFECT ON E-COMMERCE BUSINESS
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Table of Contents
Introduction................................................................................................................................1
Problem Statement.................................................................................................................2
Research Questions............................................................................................................3
Research Methodology...........................................................................................................3
Introduction to the Management Report....................................................................................4
Critical Research Analysis and the related findings..................................................................4
Virtual reality and related opportunities................................................................................5
Virtual reality and its user experience enhancing nature.......................................................5
Threats related to the implementation of Virtual Reality.......................................................6
Differences between Conventional and Potential VR based Online Shops...........................7
Conclusion..................................................................................................................................8
References................................................................................................................................10

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Introduction
With its substantial growth in the industry, e-commerce has emerged to be a vital part
of life. The growth of the e-commerce industry can be well understood from the fact that
Walmart though being one of the largest retailers have been run over by Amazon. The
evolution of technologies has resulted in the shifting of the physical markets to virtual ones.
A significant amount of investment is done on the communication tools and technologies that
utilize the internet to the revenue of the firm and to gain the trust of its customers. The
technology used helps to enhance the usability of the shopping websites and helps
maintaining and increasing the trust of the customers (Martono et al. 2016). The platforms
are user friendly as the customers can post their feedback and the reviews updated by the user
help the new customers to know the product better. Recommender system is an advanced
search technology that recommends products to the customers based on their previous history
of purchasing (Parise, Guinan and Kafka, 2016). The predictions made by the recommender
system help the site to post relevant suggestions for the particular user. The technique helps
those users who are clueless about how to search for an available product. The various
researches that have been conducted claim that Amazon has earned 33% of its revenue from
the recommendations made by the recommender system. The shopping platforms are
investing more on such tools and techniques, which are not only aiding them in increasing
their sales but are also a help for the users.
Problem Statement
Virtual reality is no more restricted to the world of gaming and entertainment industry
rather it has spread its roots within the e-commerce industry as well. The role that virtual
reality can play for medium, small and large-scale industries is yet to be discussed and
investigations made on what will be the future position of e-commerce when supported by

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this technology. The usage of virtual reality in the arena of e-commerce is confined to
research work that requires investment of lot of efforts (Wong et al. 2015). The applicability
of the technology to the e-commerce sector and the process by which it can help improve
customer’s experience needs to be analyzed. Thus, the following research will consider the
topic that how in future virtual reality will affect the e-commerce industry.
Research Questions
The questions that need to be researched based on the above scenario are as follows:
 What could be the possible impacts of the virtual reality technology online shopping
platforms?
 How can the technology enhance user experience and increase the e-commerce
websites usability?
Research Methodology
In the sphere of gaming and entertainment, virtual reality has already made its
presence but in case of online shopping platforms, its contribution is yet to be analyzed. As
the concept of the technology is just in its infant phase and is limited to the field of research
only, the existing evidences on the same can help proceed with the analysis (Stoyanova et al.
2015). The methodology includes investigating the available literature and it will act as a
source of secondary research. The current trends and updated knowledge on this specific
domain will be portrayed. The research that will be conducted based on secondary data that
will focus on analyzing the qualitative nature of the data available from different sources. The
existing literature can be used for studying the topic in depth (Huang et al. 2016). The
literature and considered to qualitatively analyze the topic are from online repositories,
libraries and certain books. The secondary data has been referred to in order to carry out the
research.
The research is supported by secondary data and it re-analyzes reviews critically and
interprets the previously available data concerning this domain. The sources of the data are
the work of the academics, researchers and business experts. The secondary research is all

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about analyzing the qualitative data that is available from the existing work of some
researchers. In the following research secondary data has been critically analyzed and then
the inference made. The research questions will be answered with the help of the
informations obtained from these sources. The articles, research papers and reports from
IEEE, Google Scholar and some other libraries will be referred to in the process of the
research work (Javornik 2016). The conclusions will be a compact and specific work and
based on the data obtained from the various sources.
Introduction to the Management Report
The concept of virtual reality refers to scenarios that are computer generated and
simulate users’ experience through perceptions. Virtual reality can create environment that
have similarities with the reality or such an environment that could not be possible other than
using the technology. In spheres such as medicines, sports, entertainment and architecture the
technology has revealed its potential and in domains such as online shopping the technology
needs to establish it. At present, the technology’s hold on e-commerce is limited to paper
work and has no such significant role in this domain (Disztinger, Schlögl and Groth 2017).
The e-commerce platforms have not been able to make use of the virtual reality due to lack of
applicability of advancements in the technology. The application of the virtual reality in the
other domains can be a source of inspiration for the evolvement of the technology in the
online business arena. With reference to the fashion products, virtual reality can be a useful
tool that can attract the customers and control the behaviour of the users (Rese et al. 2017).
Thought there is no such specific role of the virtual reality technology in the e-commerce
domains but several research works claim that it could be the future of shopping from the
online platforms. The technology can highly satisfy the customers providing them with vivid
references (Altarteer 2016). The facts have been considered to recognise the role and
corresponding impact of the technology on the e-commerce industry. Virtual reality based
technology can help boost the growth of the e-commerce industry or the online shopping
platform.

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Critical Research Analysis and the related findings
Several studies indicate that virtual reality stands a position in the online shopping
platform. The process of online sale can connect to the real stories of the shopping experience
by the help of the technology (Yim, Chu and Sauer 2017). The concept is still not clear how
the technology can influence the customers shopping habits. The proposed research
methodology has been undertaken to find out what are the roles of the virtual reality
technology in online shopping domain. From the previous section of the report, the research
methodology has been followed in order to investigate the various roles and opportunities of
the virtual reality based applications on the e-commerce sector. The related review on the
available literature has been done to identify the opportunities and determine its ability to aid
the process (Wang et al 2015). The potential challenges have been recognised to align the
technology to the industry and methods suggested to deal with the same. The literature of the
data and facts available on this topic would help determine what its present implications are
and how in future the technology will affect the various sectors especially the online
shopping platform. The supported data also give an idea of the habits of the customers related
to the virtual environment.
Virtual reality and related opportunities
Continuous efforts are being made to utilize the virtual reality technology in the e-
commerce industry updating the experience of the users. There is a clash between the
researchers on the fact that whether the virtual reality has gained its position in the sphere of
online shopping. The virtual store of Microsoft HoloLens is one of the examples of the virtual
reality been used. A store based on this technology was introduced by Microsoft and the
customers could explore it by the help of VR-kits named HoloLens (Tarng 2015). The
HoloLens kit enables the customer of the company experience the virtual environment. The
customers can view the products and choose according to their needs. The kit helped
customers to explore the retail store in a virtual atmosphere and they had the experience of
the real store. The kit enables the customer to view items such as Xbox gaming console and
buy according to their requirements. According to Digital Capital, the revenue earned
annually will be up to 30 billion dollars by the year 2020. The virtual environment bridges

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the gap between the customers and the retail stores thus providing a better opportunity to the
users (Pantano, Rese and Baier 2017). Virtual reality could provide realistic online shopping
experiences to the customers thus; it is of great interest to the retailers. Reports suggest that
retail giants are working on their platforms to bring in virtual reality technologies in order to
adopt the new advancements in the shopping world. The consumers are enthusiastic about the
implementation of such a technology and look forward to the better interaction with the
retailers. The distance between the retail shops and its customers are decreased by the help of
the virtual reality based technology thus attracting the customers and benefitting the
organization. The ease of choosing the fashion brands in a virtual environment can provide
the customers with thrilling experiences and as an emerging technology if a certain
organization successfully adopts the technology it would be beneficial to brand name of the
firm. Virtual reality based platforms can get popular amongst the customers due to their
attractive nature and characteristics and serve as an opportunity for the organizations to grow
substantially.
Virtual reality and its user experience enhancing nature
The investigations by IPSOS, a globally accepted market research group found that
50% of the German population were interested to use the technology for advanced online
shopping experience. Fashion brands for example Adidas and the North Face are trying to
implement the virtual reality experience for their users so that their customers can try the
outfits in the virtual environment and have a clear 360-degree angle view (Papagiannidis et
al. 2017). The virtual reality technology is capable of more rather than just the way the
brands are using it. The customers want the retailers to make use of the virtual reality
technology that will help them to check the colour and pattern of the product they are buying.
These techniques come up with an extensive method of bridging the gap between the online
retailers and the customers by providing them with a virtual environment (Bonetti, Warnaby
and Quinn 2018). It will act as an interactive and innovative medium fascinating the
customers and thus increasing the revenue of the firms. Virtual reality gives its users an
opportunity to get a good understanding of the products and respective features along with
vivid user experience. The online and the in-store customers can interact with the variety of

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products making use of the VR tools (Kang and Johnson 2015). The technology also provides
an opportunity to the customers to experience animations of the working process of electrical
appliances that will enable them to get a better understanding of the product. There is lots of
scope for the virtual reality technology in future to strengthen the environment based on VR
for the products. Virtual atmosphere can provide the customers the real feel of the shopping
environment and thus can effectively increase the revenue of the firm where it is
implemented.
Threats related to the implementation of Virtual Reality
The concept of virtual reality brings it with many opportunities for various sectors of
business but until date, it has been successfully adopted only in the platform of games. The
virtual reality based technology is tough to be implemented as it is a complicated process and
in the e-commerce domain, it can pose certain threats if not executed properly. The
technology keeps the potential to deliver in the e-commerce domain but is in its infancy.
Virtual Reality provides opportunities in areas such as business to consumer, business-to-
business and consumer to consumer irrespective of the sector of the online industry. With
opportunities, there are also certain limitations to the technology (Alam et al. 2017). While
integrating the technology with the existing scenario many challenges could be faced.
Researches previously made on this topic illustrate that much of time will be required to
implement virtual reality based platforms rather than the conventional ones. Owing to the
graphical works that have to be done in order to implement the virtual reality based
technology makes it time consuming. The technology has to enable the users to experience
high-speed interaction and be able to navigate the platform thus requires intensive graph
work. Virtual reality in the area of the e-commerce sector, the most probable threat is the
fading of the balance between the created virtual environments providing multiple catalogues
and the actual facilities being provided to the customers (Pantano, Rese and Baier 2017). The
researches done on this technology being incorporated in the online shopping sector require
that the customers have sound knowledge about the virtual environment before the online
companies invest on these. The researchers, online retailers and investors are not aware of the
gain related to the implementation of the technology so the process of integrating VR based

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systems with the online shopping platforms will take time and until today is a big challenge
to the retailers (Bigne, Llinares and Torrecilla 2016). There are still some examples of the use
of the virtual reality based software in the online shopping domain but the attempts that have
been made are confined to certain limits based on the controlled environment for less number
of products and this serves as a good initiative in the sphere of e-commerce. The development
and integration of the virtual reality based system will take a lot of time and require lot of
efforts to be invested in the research and development. Efforts have been made to inculcate
the technology in the online shopping sector but as it could not be executed properly that is
the potential of the technology have not been well-addressed therefore still it remains
unknown to the users and the retailers.
Differences between Conventional and Potential VR based Online Shops
With the convergence of Virtual reality into e-commerce, the incorporation of VR
into the process of online shopping has attempted several times. The leaders of the industry
such as Amazon and eBay do acknowledgement of the fame acquired by VR (Anderson et
al., 2016). The way they made it clear was to set up programmes regarding the introduction
of Virtual reality, but on a limited scale. However, the significant concern among the many
was the emergence of perspectives from both customer and retailer ends about the way the
introduction of VR will change the traditional online shopping process. The section presented
below gives a comparison in brief for both the types of shopping experiences.
The primary comparison that is intended to find in the first place is the difference in
the functionality between the conventional and VR based online shops, that is, the doable in
the VR shops that are not present in the conventional ones. The first change will be noticed in
the VR shops regarding its visual presentation of the categories and products, which will be
much more enhanced as compared to the primary texture and image based presentation in the
conventional stores (Bonetti, Warnaby & Quinn, 2018). VR stores will offer the users to
make a cross-comparison among the products and resulting into upselling by letting them put

9VIRTUAL REALITY’S EFFECT ON E-COMMERCE BUSINESS
the products next to one another, providing the customers with a lively experience (Gao &
Su, 2016). While in the conventional store the user has to go to every product and check the
specifications of it and have to move to another for description (Wardhana & Pradana, 2016).
Other than providing experience in aspects of availability, interaction, accessibility and
feeling, the VR based shops can do the sorting and recommending algorithms that will give a
possible suggestion of what the user has bought in the past and what the user will be
interested to buy in future. However, such algorithms are available in the conventional store
but usage of VR can make the suggestions much more personalised for the user. Research
related to the particular industry says that retailers are positive towards the introduction of
Virtual reality into the process of online shopping and they also claim this introduction to be
the future of e-commerce (Kim, Ko, 2019). However critical analysis from researchers stated
the replacement of the feel and shopping experience by virtul reality is still far way than what
is expected (Bilgihan, 2016)
Conclusion
The usage of virtual reality in the sector of online shopping business can be point of
potential profit for the retailers of online shopping and will be a provision area of assistance
for the customers. From the time virtual reality started developing, efforts are made to
enhance the quality of shopping experience online in comparison to that of the conventional
online stores. The pace of the implementation of VR in the industry has not been considerable
as it is challenging to transform the whole business with the application of new trends. Using
Virtual reality in the industry has its own benefits both for the retailers as well as the
customers. The usability of the online systems for shopping will increase considerably
depending on the experience to the customers while using it with great visual impacts. Other
than that, the real feel that the customers will receive while shopping online with the usage of
VR will make the experience close to the customers. Besides, the introduction of new trends

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will let the revenue to boost up with the increased usage of the system and will also help in
the spreading of the system towards different society worldwide. Apart from that trust
between the customers and the retailers will be developed based on the user satisfaction that
will increase with interactive system hence leading to increased revenue by increased
usability. The later part is achievable with more personalised content to the user with the help
of VR in the industry that will suggest the users to buy more products that will be relatable to
them.
The main questions related to the research are:
 What are the factors in terms of society, infrastructure and motivation in the society
that affects the e-government services in aspect of performance in Arab countries?
 How the above-mentioned factors in the previous question are relatable to the
performance of e-government in Arab countries?
Inspite of high assurance of potential regarding the delivery of services by e-government,
many researchers put lights on the challenges that have to be faced by the government in
order to motivate the citizens towards the use of e-government services. The social,
infrastructural and motivational factors in the society are playing significant roles in the
decrement of adoption ratio of e-government services in developing countries such as
Emirate. Such factors behave as barriers towards the development and adoption of e-
government services. The aim of the proposed research is investigating such factors in detail
manner that are affecting the e-government services to be efficient in Emirates from the point
of view of citizens. The research will be focussed on the particular context of Emirates and
the investigation will be done on the citizens using research tools, however the inferences that
would be generated from the research could be presented in a generalised manner for the
countries facing same barriers.

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