Virtual car showrooms: Augmented Reality (AR) and Virtual Reality (VR) enhancing customer experience

Conventional vehicle showrooms have remained essentially unchanged for a long time, and their benefits are clear. They offer a physical place for customers to examine cars, interact with the relevant salespersons, and then make their decisions. However, in the current digital era, the shortcomings of such physical locations are increasingly being realised. For instance, car dealers face the challenges of limited space, limiting their scope for displaying vehicles. To deal with such challenges, disruptive technologies (like artificial intelligence and augmented and virtual reality) are being increasingly deployed and the concept of virtual car showrooms is gaining prominence. Besides, to truly stand apart in the market, vehicle OEMs and dealerships are increasingly focussing on enriching customer experience at customer touchpoints. In fact, according to a survey by Cox Automotive in 2023, 79% of dealers believe that the use of in-store digital tools will make processes more efficient and 86% of potential vehicle purchasers believe that using digital tools can save time in showrooms.

This blog explores how digital technologies like Augmented Reality (AR) and Virtual Reality VR) are enhancing customer experiences. Want to delve deeper into the technologies that are enabling digital transformation in the automotive industry? Please check out our recent report: Digital Transformation in the Automotive Industry.

Augmented Reality (AR) and Virtual Reality (VR) play a central role in enhancing customer experiences

Vehicle OEMs and dealerships have started deploying digital retailing solutions enabled by AR and VR in sales and marketing channels to provide customers with personalised and immersive experiences. These technologies empower buyers to personalise vehicle configurations by modifying both the exterior and interior features while visualising their customised vehicle in real-time, reducing the need for dealers to maintain physical inventory in showrooms. Additionally, dedicated VR configurators allow dealerships to offer immersive virtual test drives, simulating diverse road conditions and environments such as city streets, rugged terrains, and varying lighting conditions (such as day or night). This enhances customer engagement, elevates the overall buying experience, and ultimately boosts conversion rates. A study by Automotive News found that those dealerships who integrated virtual reality showrooms and augmented reality test drives experienced a 20% increase in customer conversions compared to traditional sales methods.

Benefits for customers, OEMs and dealerships

The benefits of virtual vehicle showrooms for customers, OEMs and dealerships are manifold, and include:

• Time savings – since smart showrooms enable AR/VR-based virtual vehicle experiences, customers do not need to physically travel to the showrooms, thereby saving time.
• Environmental benefits – less travel by customers can reduce traffic congestion and greenhouse gas emissions, ensuring sustainability.
• Increased operational efficiency – offering AR/VR experiences to customers allows OEMs and dealerships to streamline their operations.
• Financial savings – OEMs and dealerships can also benefit from reduced requirements to have vehicles physically in stock. They can reduce their showroom space (thereby reducing rental and other overhead expenses) and reduce staffing costs.

Concluding remarks

Augmented Reality (AR) and Virtual Reality (VR) are revolutionising car showrooms by offering virtual immersive, interactive, and convenient experiences for customers. These technologies can help to enhance customer engagement, streamline decision-making, and provide a futuristic approach to car buying. As adoption grows, AR/VR will continue to redefine the automotive retail landscape, making vehicle discovery and exploration more engaging than ever.