Keywords

1 Introduction

V-commerce terminology in marketing and business literature is becoming increasingly prevalent. Various authors agree that v-commerce will “reshape the retail landscape” (Ango, 2016; McKone et al., 2017). However, the concept’s shared origin between academia, industry and the media combined with ubiquitous implementation, introduced ambiguity to the v-commerce terminology; which currently embodies different, and even contradictory, connotations contingent upon the various stakeholders (i.e., often due to contextual differences). At present, three different usages of v-commerce terminology can be observed: (1) A stream of authors, predominantly practitioner literature, that relates v-commerce to digitally native vertical brands and vertically integrated commerce (i.e., vertical commerce; Dunn, 2016). (2) A stream of literature that associates v-commerce with virtual commerce (e.g., Jin & Bolebruch, 2009). (3) A final stream of literature that refers to voice commerce (Beaumont, 2017; Zhang, Liu, & Li, 2009). The following paragraphs will expand on the different interpretations of the v-commerce abbreviation.

1.1 Vertical Commerce

The development of Internet-based commerce and the competitive and fast-paced nature of global markets have revived retailer’s interests regarding vertical integration—which can be described as combining two or more stages of production and/or distribution, that are usually separate, under a single ownership (e.g., Buzzell, 1983). Dunn (2016) coined the term Digitally Native Vertical Brands (DNVBs), describing brands that are born on the internet and are maniacally focused on the customer experience (a.k.a., v-commerce brands). DNVBs primarily use e-commerce channels for interaction, transaction, and story-telling and rely heavily on their loyal customer base and user-generated content to spread the word (for examples of DNVBs in different industries see Pixlee, 2017). Adhering to the concept of vertical integration, DNVBs bypass traditional supply chains and distribution channels and implement direct-to-consumer models. This enables these online (niche) retails to offer consumers high-quality products at reduced costs while at the same time enhancing their product gross and contribution margins. Although there are potential downsides to a vertically integrated business model (e.g., supply chain complexities and difficulties in scaling; e.g., Dunn, 2016; Wertz, 2012), rising investment activity and acquisitions (i.e., Unilever bought Dollar Shave Club for US$1 billion; Unilever, 2016) could usher in a new era of cult brand monotheism, e-tailers and vertically integrated commerce.

1.2 Virtual Commerce

A lexical definition of virtual is “not physically existing as such but made by software to appear to do so” (Oxford dictionary, 2018). In line with this definition, Javornik (2016) defined virtuality as a “media’s capability of showing virtual elements or virtual worlds, as experienced by the user through immersion or telepresence in the environment created by computer graphics or visual elements”—adopting an experience-based perspective (cf., Steuer, 1992). To facilitate immersive and interactive experiences, alternate reality technologies (Table 1) are utilized; which can be classified along a virtuality continuum (Milgram & Kishino, 1994).

Table 1 Alternate reality technologies
Full size table

Virtual commerce encompasses conducting commerce through these medium types. Therefore, this paper defines virtual commerce as: electronically mediated commercial transactions that originate from an alternate reality technological platform and involve either digitally-generated or real-world products and services.

1.3 Voice Commerce

Voice activated commerce pertains to user interaction with commercial platforms and applications that utilize natural language speech recognition to enable self-service transactions over the telephone and other connected devices (e.g., Dennis & Harris, 2003, p. 205)—as such, voice recognition technology substitutes the online point-and-click decision-making process by introducing spoken command methods. This shift towards conversation-based e-commerce is influenced by technological progress, including, but not limited to, improvements in the fields of: artificial intelligence, cloud computing and machine learning. Alongside there is the consumer’s rising acceptance and comfort levels towards conversational user interfaces (i.e., smart speakers, such as Amazon’s Echo and Google Home, that are often linked and or controlled by virtual voice assistants like Apple’s Siri and Microsoft’s Cortana). Although voice commerce brings in new challenges for retail (e.g., privacy concerns could fuel increasing restrictions regarding access to walled-garden personal data accumulated from voice interactions, inciting tension among digital ecosystems and potentially raising the cost of platform neutrality; Gartner, 2016), it is likely that consumer demand for voice commerce will continue to rise as industry leaders proceed to innovate.

All of the above-mentioned developments are expected to deeply impact the retail industry. However, to advance marketing research practices and increase understanding regarding v-commerce within the public discourse, it is imperative that we clearly distinguish these advancements. This research advocates to ascribe the v-commerce terminology exclusively to virtual commerce; and use different prefixes for the other concepts, respectively vi—for vertical (integrated) commerce and va—for voice (activated) commerce. The underlying rationale is that throughout the years, commerce has consistently advanced by moving alongside and making use of technological revolutions (i.e., the internet); and most practitioners and academics agree that the rise of virtual and augmented reality can be considered as the next technological revolution (e.g., Steinicke, 2016, pp. 33–43). In addition, former one-letter commerce prefixes all refer to the medium type and or technology. Examples include: E-commerce, which can be defined as “the use of electronic means to exchange information and to carry out activities and transactions” (i.e., electronic commerce; Wyckoff & Colecchia, 1999); M-commerce “any transaction with a monetary value—either direct or indirect—that is conducted over a wireless telecommunication network” (i.e., mobile commerce; Barnes, 2002) and T-commerce “electronically mediated commerce through interactive digital television” (i.e., television commerce; Arroyo-Cañada & Gil-Lafuente, 2016). Adhering to this pattern, v-commerce should relate to virtual technology. It can be argued that virtual commerce, like m-commerce before (Coursaris & Hassanein, 2002), should be regarded as a subset of e-commerce—although some people have phrased it to be the “next step” (e.g., Alexandru, 2017).

2 V-Commerce and the Impact on Business-to-Consumer Retailing

In 2010, Jones stated that “a host of technological and social forces needs to converge in order for v-commerce to flourish” (p. 56) and it can be reasoned that we are currently at that stage. The maturation of VR and AR technologies heralds a fundamental shift in moving from the internet of information towards the internet of experiences (i.e., in which experiences replace information as the basic unit of currency; Kelly, 2016), and it can be argued that therein lies the biggest premise of virtual commerce; the potential to transform online shopping experiences and provide a (near) real-world equivalent (e.g., Papadopoulou, 2007). This is primarily because a virtual commerce interface, if properly designed, can support natural shopping behaviour by providing a more personalized, immersive and interactive experience (e.g., Chittaro & Ration, 2000). From a societal point of view, the consumer shift towards the v-commerce will be mainly driven by the younger age cohorts, since they are technology savvy, known to associate with brands to express their identity (e.g., Saxton, 2005) and already spend more money on ‘experiential purchases’ (cf. Van Boven & Gilovich, 2003).

2.1 Current Implementations of V-Commerce

The retailing industry is starting to transform due to virtual technologies impacting all stages of the retail ecosystem. This paper takes a business-to-consumer approach and focusses on “front-end” implementations of virtual commerce. V-commerce will change the meaning of “what you see is what you get” since it provides consumers with the possibility to experience and explore different features of a product or service before the actual purchase. Notwithstanding the interesting development perspectives for brick-and-mortal retailers, research by Chesney, Chuah, Dobele, and Hoffmann (2017) indicates that this could be a major disrupter for online shopping, potentially bridging the trust deficit that might have prevented people from making purchases in web-based e-tailing environments in the past. Various retailers are already experimenting with different implementations and although currently virtual commerce is still in the early adoption phase, it can be expected that in the (near) future virtual commerce will be implemented on a more global scale. Currently, two main implementations of augmented-reality interactive technology (ARIT; e.g., Huang & Liao, 2015) can be distinguished; namely, enhancing the consumers shopping experience by utilizing it as a product try-on technology and employing location-based intelligence to offer interactive, contextually-relevant (personalized) experiences. With regard to virtual reality technology, the two main implementations that can be identified are employing virtual-reality as a new sales channel and implementing it as a channel for brand building.

AR Implementations

The most obvious fit for try-on technology are retailers where fit is crucial (e.g., retailers selling clothing). However, it does not stop there. CaratLane, one of India’s largest online jewellery retailers, implemented this technology to introduce the world’s first virtual 3D jewellery Try-on app—implementing facial recognition and three-dimensional imaging technology to turn the user’s laptop or smartphone screen into a mirror (Business Standard, 2015). MAC Cosmetics implements this technology on location in their New York retail store (Stolyar, 2017; i.e., stationary virtual mirrors, a.k.a, AR-mirrors). Another example is the IKEA Place app, which lets consumers experience how true-to-scale furniture would look, and fit, in their house (IKEA, 2017). Currently, most AR apps require consumers to use their hand-held (mobile) devices. However, it can be argued that with recent technological advancements in the field of wearable augmented reality devices, and particularly Augmented Reality Smart Glasses (i.e., devices that are worn like regular glasses and merge virtual information with physical information in a user’s view field; Ro, Brem, & Rauschnabel, 2018), business potential and opportunities for value creation will continue to grow. Regarding location-based augmented reality, multiple apps exist that link augmented reality with GPS systems, geospatial data techniques and location sensors of mobile devices (e.g., Streetmuseum, which provides historical information about landmarks in London; BBC, 2010). Utilizing this technology, Blippar (2017) provides a business implementation by employing rich media units (i.e., digital banner ads) that deliver content and features designed to drive active consumer engagement and interest in products. Since this technology can be implemented in almost any camera-accessible web and mobile environment, it facilitates scaling exposure across audience segments.

VR Implementations

Providing the first virtual reality department store, eBay and the Australian retailer Myer provide a good example of implementing VR as a sales channel (eBay, 2016). Utilizing a smartphone based virtual reality viewer, consumers could inspect items (i.e., move, rotate, zoom-in), access real-time product specifications (e.g., product range, pricing and stock information) and finalize purchases through the eBay app. To enhance consumer uptake, Sydney residents could sign up for a special exhibition tour and 15,000 VR viewers were made available to consumers free of charge. Implementing VR technology for brand building can take multiple forms, virtual brand storytelling being the most obvious. A showcase example is provided by The New York Times who partnered up with Google to create a line-up of 360° virtual reality films that could be made available to their (print) subscribers. The first project (i.e., The Displaced, which focusses on the lives of three children whose lives have been uprooted by war) won them the Entertainment Grand Prix at the Cannes Lions International Festival of Creativity (Adweek, 2016). Other examples of VR brand building include: (1) Product demo’s, demonstrating product attributes, features and functionalities (e.g., Chevrolet VR experience; Chevrolet, 2018). (2) Live streaming of events (e.g., Topshop London Fashion Week; Campaign, 2014), and (3) co-creation (i.e., NIKEiD VR Studio; RGA, 2016). Overall, it can be concluded that v-commerce offers exciting and new opportunities for brands, businesses and the retail industry—opportunities that we are only just beginning to explore.

3 Discussion

At this point it seems unlikely that v-commerce will render well established m-commerce and e-commerce practices completely obsolete—although, tech executives (e.g., Zuckerberg) have previously mentioned that alternate realities have the potential to become the next major computing platforms in the future (e.g., Heath, 2017). Nevertheless, v-commerce does offer a new platform for consumer-brand interaction that can supplement existing digital and physical channels. Therefore, retailers that are pursuing a true omni-channel strategy should start to consider how v-commerce can become an integral part of their overall approach (e.g., as marketing and or customer service channel). Concurrently, the Marketing Science Institute (MSI, 2016) has encouraged the academic community to gear their research efforts towards the delivery of integrated, real-time and relevant experiences in context. Therefore, future research efforts should focus on addressing: (1) Contextual differences (e.g., online vs. in-store settings). (2) Differences between consumer segments (e.g., acceptance, trust and brand-self connection). (3) Cross-channel effects, interoperability and comparative effectiveness between different v-commerce channels and/ or traditional advertising platforms, preferably relating it to market segments and or product categories. (4) Generating universal v-commerce measurement metrics. (5) Establishing laws and regulations (e.g., regarding data ownership/privacy). We encourage investigations into these potentially fruitful avenues of future research and practice.