The Impact of Virtual Reality on the Customer Experience in the Luxury Industry

Abstract

Luxury companies are renowned for offering exceptional customer service while maintaining value by being competitive and innovative in terms of customer experience. The luxury industry has traditionally resisted technology because it is seen as antithetical to luxury values. However, competition and market pressures coupled with global pandemics have forced luxury retailers to adopt a variety of technologies to engage customers, prompting luxury retailers to leverage significant technological innovations to improve the customer experience. Virtual reality (VR) is an innovative channel for marketing communications that can facilitate the luxury industry. Due to less research on technological innovation in the luxury industry, this paper focuses on the impact of virtual reality on the customer experience in the luxury industry. A critical analysis of the literature concluded that virtual reality's main impacts are improved communication with consumers, created an immersive experience, and enhanced customer loyalty. The paper made three recommendations for luxury retailers to use virtual reality to enhance the customer experience, which is customer-focused, prioritizing the physical and mental well-being of consumers, managing the customer experience, and aiding with personalized engagement marketing.