MCO 608_ Managing a Contemporary Business Information System

COURSE TITLE:

Managing a
Contemporary Business
Information System
Responsibility

Student: Mai Nguyen Hoang Nam

ID : 12-01087

COURSE CODE

MCO 608
Monitor: Prof. Alexander Pulte/ Son Dien Trung

1
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

[Managing a Contemporary Business Information System]

A Research Project Presented in Partial

Fulfillment of the Requirement for the
Degree Master of Business
Administration

Submitted by: Mai Nguyen Hoang Nam

UBIS

September, 2021

2
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

Executive Summary

Virtual reality is growing in popularity and is seen as a technological breakthrough for future sales.
This article will introduce virtual reality, its potential and challenges. Also, discuss how VR is
changing sales and some additional uses for VR in sales. From Case 14-2: Virtual reality study the
before you buy concept, the article will explain how Holoroom works at Lowe's and what are the
advantages of using Holoroom in Lowe's. Because of the 8-page limit, it is not possible to fully
clarify the value of VR as well as the issues raised. However, I will try to provide the most useful
information on the subject.

3
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

Table of Contents

1. Provide An Introduction To Virtual Reality ............................................................................ 5

1.1 Types of Virtual Environments ........................................................................................ 5
1.2 Components of a Virtual Reality System ......................................................................... 5
1.3 Virtual Reality Applications............................................................................................. 6
1.4 Obstacles in Using VR Systems ....................................................................................... 6
2. Discuss How VR/AR Is Changing Sales .................................................................................... 6
3. What Are Some Additional Applications For VR/AR In Sales .................................................. 8
4. How Does Holoroom Work At Lowes ....................................................................................... 9
5. What Are 2 Advantages Of Using Holoroom At Lowe’s ......................................................... 11
6. Conclusion ................................................................................................................................ 12
References ..................................................................................................................................... 14

Table of Figures

Figure 1 Customers experience VR/AR at Lowe's (Image source: lowesinnovationlabs.com) ... 11

4
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

1. Provide An Introduction To Virtual Reality

Virtual reality (VR) is a system that helps simulate computer graphics, creating a lifelike world.
VR is understood as the use of computer-generated three-dimensional images to create the illusion
of experiencing things that do not actually exist in the real world environment (Woodford, 2020).

Previously, one could only use two-dimensional environments to illustrate a three-dimensional

object. A third dimension has been added thanks to VR technology so that users can interact with
objects in a way that was not possible before. When using virtual reality, stereo sound and tactile
sensations enhance immersion in the three-dimensional real world. With VR technology, the
environment is created vividly and interacts with the user in real time through the user's reactions.
In VR terms, the everyday physical world is called the information environment. Augmented
Reality (AR), Mixed Reality (MR), Extended Reality (XR) are variants of VR.

1.1 Types of Virtual Environments

There are two major types of user environments in VR: exocentric and egocentric (Khadka, 2020).

Egocentric environment is the environment in which the user is completely immersed in the VR
world. Technologies commonly used in this environment include virtual retinal display (VRD),
uses lasers, and head-mounted display (HMD).

Exocentric environment is an environment where the user is given a “window view.” In this
environment, the user can only view it on the screen, data is still rendered in 3D. 3D graphics are
the main technology used in exocentric environment. The data in the exocentric environment
cannot interact with objects as in an egocentric environment.

1.2 Components of a Virtual Reality System

Virtual reality system includes the following components:

 Visual and aural systems: These components help the user can see and hear the virtual
world. Example: HMD.
 Manual control for navigation: Commonly used is the data glove, which is an input device,
much like a mouse. This component allows users to navigate in VR environments,
experience limited tactile sensations, and control various objects. For example, determine
the shape, size, and hardness or softness of an object.

5
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

 Central coordinating processor and software system: This is the component that generates
and manipulates high-quality 3D image graphics, that must be displayed quickly, and the
monitor's refresh rate must be extremely fast for real-world rendering.
 Walker: When the user walks or turns in different directions, this input device captures and
records the movement of the user's foot in the process.

1.3 Virtual Reality Applications

Virtual reality is applied in many industries such as military (such as flight simulation); medicine
(such as bloodless surgery); entertain; education; conferences and many other business
applications. Virtual reality is expected to be the future of retail and bring many innovative
experiences in different ways to consumers. The applications of VR have been highlighted in
Challenge Question Unit 8 and will be mentioned more in the following sections.

1.4 Obstacles in Using VR Systems

The obstacles of VR are the ability to high-speed transmission and related technologies have not
really developed to provide the best user experience. Other obstacles include confusion between
the VR environment and the real environment, mobility and other problems with HMDs, difficulty
representing sound, need for additional computing power, safety and privacy, simple interface…
VR technology needs further development to overcome the above barriers.

2. Discuss How VR/AR Is Changing Sales

According to a survey by Worldpay, 84% of people in China believe that VR/AR is the future of
shopping. In Japan, 66% of consumers want more offline stores to deploy VR/AR (Strohanova,
n.d.). At the London, VR helped Audi increase new car sales from 60% to 70%, 50% of customers
booking cars based solely on virtual reality experiences (Digital, 2020). This shows the potential
for VR/AR to drive sales. Today, more and more businesses are using VR, AR and MR
technologies in different creative ways.

 Simplify decision making - Personalized shopping experience

Thanks to VR/AR, customers at Uniqlo can try on a dress by pointing their smartphone camera at
the dress to see different colors without trying on. Or at L'Oreal, the Genius app helps customers

6
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

try on cosmetics by taking photos of themselves and applying virtual L'Oreal products to the
images (Insights, n.d.). VR/AR can provide contextual information to consumers, show products
before buying, give consumers confidence to make faster purchasing decisions, whether e-
commerce or traditional retail system. By personalizing their products, customers are less likely to
return goods and three times more likely to purchase, spending approximately 10% more
(CAFE24, 2021). In addition, products that are complex to order can have long and difficult sales
cycles. Thanks to the immersive VR experience, guests are likely to switch faster.

 Advanced Galleries

Virtual reality can help retailers put their products on the virtual storefront. For example, with cars,
providing different interior colors of the same model, or too many models, will overload the
showroom. BMW has created a mobile app that allows shoppers to choose from various features
such as paint colors and interior materials, and at the same time, show users how a new car will fit
into their garage (AKOPYAN, 2016). Marriott offers an innovative way for customers to attend
their events without having to be physically present. VR technology that helps bring locations to
customers is a great way to drive additional sales (BETHESDA, 2015).

 Gamification

Gamification is known as a way to increase sales by rewarding virtual users to incentivize

customers to purchase. Gamification combined with VR/AR makes shopping an engaging game
that makes customers associate their shopping experience with the positive emotions provided by
a certain retailer.

 Engagement - Create better shopping experiences

Along with reason, shopping decisions are closely connected with emotions. When they
experience an unforgettable product through virtual reality, the more they want to feel these
emotions in the future. So VR/AR encourages shoppers to buy products that they associate with
positive feelings. Virtual reality also attracts young people because they are customers who love
new technology experiences. VR/AR helps retailers drive more engagement and generate more
revenue. For example, Lego uses a Digital Box that allows consumers to virtual interact with
products of interest to them by creating detailed 3D models of completed works (Augmented
reality in Lego stores, 2013). Or with Uniqlo's AR mirror, shoppers can instantly share an image

7
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

of a new suit with their friends on social networks without even trying on (UniQlo's magic mirror,
2013). Another example is at Tesco, with Tesco Discover, kids can take selfies with Elza and add
different accessories like hats to user portraits, thereby increasing customer engagement, helping
to increase sales collect.

From the above facts, it can be seen that virtual reality has the power to influence customers'
purchasing decisions. When customers feel connected to a certain item, they have a deeper sense
of ownership and will be more sensitive to purchasing this product. Due to its visualization and
interaction capabilities, VR/AR can encourage shoppers to purchase products. Not only that, this
technology also helps customers to eliminate doubts. Before buying a product, customers often
weigh the pros and cons to make the right decision. Customers will be more willing to look for
another retailer if marketing efforts fail to reassure customers. AR/VR can help increase sales
because it allows users to truly test your products and eliminate any doubts.

Covid-19 has inconvenienced every aspect of our lives, including our retail experiences. Even
many countries lock their doors, self-isolate and force work from home. This makes consumers
increasingly reluctant to go to brick-and-mortar stores. As a result, VR/AR can enrich consumers'
shopping journeys and help them make better decisions, and drive sales even in many of the
predicaments.

3. What Are Some Additional Applications For VR/AR In Sales?

Try before you buy: IKEA is known to be the largest major retailer with thousands of the best
showrooms in the world, but it is difficult for users to visualize what the goods will look like in
their homes. Likewise, the builders and other home improvement industries grapple with this
problem. IKEA has launched an IKEA Place service that helps customers preview what they plan
to buy in their home (Lunden, 2017). For B2B companies, salespeople can use virtual reality to
provide better product demos that show customers how their product can really help them. AR/VR
allows customers to actually preview and test a product to make sure they want to buy it.

Retail Virtual Stores: Retailers can take advantage of AR/VR by creating a virtual store app that
makes it easy for customers to navigate through their store and find the item they're looking for.
Dent Reality (https://www.dentreality.com/) has helped shoppers who need help navigating

8
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

somewhere in a mall, airport, or retail store with a virtual reality experience that helps figure out
the shopper's location and use virtual paths and arrows to help them find their destination.

Gamification: Users can play games in virtual space but earn rewards or points to redeem in real
life. On the MyVegas app, customers can play different gamification, earn coins and redeem
rewards (Weinberger, 2015). Prizes include free (or discounted) hotel rooms, buffet meals, or
tickets to a show. By using virtual reality with gamification, hotels continuously engage customers
and keep them coming back.

Sell in a lively way: The Internet has not been able to eliminate the traditional newspaper, and
virtual reality technology has helped customers have more novel experiences. Users can view the
live images on the front and back covers of journal The New Yorker in virtual reality. Or like
Vespa, the famous Italian scooter company, also links its own printed magazine pages using AR
(Admin, 2018). Customers can scan ads and view a variety of vehicle models, including colors,
styles and accessories. This makes customers happy and sales come alive, easier.

Removes language barriers: Many companies face language barriers when they reach new markets.
This takes a lot of time and money, making sales difficult. Virtual reality technologies offer many
options to avoid most language problems. Many theaters are now adopting virtual reality to enable
theatrical show subtitle support. Even deaf people can now listen to music thanks to subtitles on
virtual reality glasses. Eliminating these problems makes selling easier.

In the field of sales, the application of VR/AR is huge. The examples above are just one of many
different ways to use virtual reality in sales. Businesses today are getting more and more creative
in applying VR/AR to sales.

4. How Does Holoroom Work At Lowes?

Large retailers like Macy's, Kohl's or Lowe's are increasingly financially hurt as more and more
consumers shop online. Therefore, in response, retailers have made great improvements. In 2014,
Lowe's Innovation Lab launched Holoroom. Holoroom is a VR/AR platform that Lowe's uses,
powered by Marxent's Visual Commerce application. Holoroom is a virtual reality home
improvement design and visualization tool that helps homeowners have an intuitive, immersive

9
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

experience in their dream room. Holoroom's aim is to help clients visualize their home
improvement projects by providing an intuitive, immersive VR experience.

Lowe's says most customers are stalled because it's hard for them to visualize the end product. In
contrast, these home improvement projects are worth $70 billion (Gepp, 2018). Lowe's says that
many clients think they lack the confidence and skills to do a do-it-yourself (DIY) project. So
Holoroom provides them with a more effective training tool so that customers can learn DIY in
their own ways. The Lowe's Holoroom includes 3 main ingredients:

 The Lowe's Holoroom's content management system houses thousands of unique 3-D
product SKUs, with a full range of surfaces, textures, and colors that customers expect. It
includes many products such as paint, flooring, kitchen equipment, bathroom of Lowe's...
 Next, the client will use a tablet to draw a diagram of their room, floor, wall, door, etc. in
2-D.
 Finally, the customer will proceed to select the items that have been added to the design as
virtual 3D objects. After selecting the desired items, customers will be provided with an
Oculus Rift headset (by Facebook) to help customers see and feel the space they have
designed. The controls on hand will help them make any adjustments. Markers on the walls
and floor of the Holoroom helps inform scale so that products appear correctly sized for
the environment. In addition, customers feel lifelike by haptic feedback, such as the
vibration of the drill bit through the controller. For example, when a client wants to tiling
a shower or mixing the mortar, simulations guide the processes so they can complete them.
Similarly, customers can easily arrange their dream home such as interior layout, paint
color, etc. and easily edit it until they are satisfied.

10
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

Figure 1 Customers experience VR/AR at Lowe's (Image source: lowesinnovationlabs.com)

Thanks to Holoroom, instant learning moments and widely scalable training opportunities to
empower both customers and employees around the world. Role-playing helped clients gain the
confidence and skills needed to start a project. The goal of every experience Holoroom creates is
to strengthen customer trust, whether it's design capabilities, project skills, or purchasing decisions.
Holoroom has helped improve customers' willingness to try new products, making it easier for
customers to make decisions and even providing professional tips.

Lowe's is trying to take Holoroom to the next level by adding scents to the customer experience
(Gepp, 2018). Scent is a very powerful sensation that helps anchor memories for the longest time.
And they are also developing other sensory experiences.

5. What Are 2 Advantages Of Using Holoroom At Lowe’s?

First of all, Holoroom enhances the customer experience. VR and AR can help customers share
their ideas in completely new ways. There are two different types of experiences at Lowe's. One
of them is the instructor-led experience, helping users experiment and help them design their
kitchen or bathroom in Lowe's Holoroom. The other type is a DIY experience, no staff is required,
but customers can explore freely. Lowes' studies show that thanks to VR, inexperienced people
have improved performance similar to those with experience. It is great that customers can try it
before they buy.

The second benefit that Holoroom offers is that because customers have a great experience, they
can share the designed space with others by sending it to YouTube 360 and can watch it at home
using Google Cardboard. Cardboard is an ultra-low-priced ($15) headset that attaches to a

11
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

compatible, VR-enabled mobile phone to deliver a VR experience. As a result, the customer

experience is preserved longer, causing them to order real products and services for their home,
which in turn helps increase sales. Customers share positive experiences with friends and
acquaintances is the dream of all businesses. Lowe's will be promoted for free and become more
known for the great experiences they have brought to their customers.

Besides, Holoroom helps build a huge data system from customers. Normally, customers have the
habit of choosing a lot of products of different websites in the product selection process, so it is
difficult to get the data about the products that customers want. However, with VR/AR, Lowe's
can see exactly the items that customers have selected and tested. They can also track consumer
behavior much more accurately than cookie-based systems can.

Another cool thing is that Lowe's can share its 3-D design portfolios with other retailers. Other
retailers also want a premium user experience. Lowe's would want the lowest cost of asset delivery
and the highest amount of exposure in the retail store. VR/AR will give retailers and product
manufacturers like Lowe's an incentive to offer a new level of sales.

In short, thanks to Holoroom, customers are about 40% better able to remember the steps to
complete a DIY project. For employees, more than 90% think VR training has helped them better
serve customers (Grensing-Pophal, 2018). On the Fortune 500 list, Lowe's operates more than
2,000 stores. They have not only embraced, but doubled down on their foray into virtual reality
training that will bring attention to the viability of rapidly evolving and increasingly cost-effective
technology across the globe.

6. Conclusion
Retail is an ever-evolving industry, is once again subject to change. In addition to shopping simply
for convenience, consumers are also looking for new experiences. Virtual reality can be powerful
decision-making tools for customers if it fits the experience at the right point in their journey.
Retailers who are using VR and AR expect to increase sales and profits. However, AR and VR are
still emerging technologies that should have a clear and absolute path to ROI (return on
investment). It takes long-term thinking to develop and prove correct.

Although virtual reality has many advantages, consumers still prefer the actual shopping
experience because the process is a social aspect. Even consumers may have a bit of a backlash

12
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

because they feel that retailers are overloading them with loads of new technology. In that case,
Lowe's needs to carefully assess the customer's response to Holoroom's efforts. DIY helper will
be a good idea if customer use it and find it really useful. Additionally, as VR becomes ubiquitous,
Lowe's will need to ensure Holoroom is superior and most convenient for consumers.

13
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

References

Admin. (2018, September 25). How Augmented Reality Can Revolutionize Print Media. Retrieved
from https://inkincaps.com/: https://inkincaps.com/2018/09/25/how-augmented-reality-
can-revolutionize-print-media/

AKOPYAN, M. (2016, 10 28). How BMW Is Using Virtual Reality To Develop And Market New
Vehicles. Retrieved from a.list: https://www.alistdaily.com/strategy/how-bmw-is-using-
virtual-reality-to-develop-and-market-new-vehicles/

Augmented reality in Lego stores. (2013, 8 4). Retrieved from RETAIL INNOVATION:
https://www.retail-innovation.com/augmented-reality-in-lego-stores

BETHESDA. (2015, SEPTEMBER 9). Marriott Hotels Introduces The First Ever In-Room Virtual
Reality Travel Experience. Retrieved from MARRIOTT INTERNATIONAL:
https://news.marriott.com/news/2015/09/09/marriott-hotels-introduces-the-first-ever-in-
room-virtual-reality-travel-experience

CAFE24. (2021, 2 24). AR and VR experiences take the front seat in online shopping. Retrieved
from https://news.cafe24.com/: https://news.cafe24.com/global/contactless-commerce-
augmentedreality-and-virtualrealityr-experiences-take-the-front-seat-in-online-shopping/

Digital, H. (2020, 4 22). How Can Businesses Reap The Benefits Of Virtual Reality? Retrieved
from www.hurstdigital.net: https://www.hurstdigital.net/blogs/dallas-video-production-
company-blog/448834-how-can-businesses-reap-the-benefits-of-virtual-reality#.YRh-
hYj7RxS

Gepp, M. (2018). Vive. Retrieved from Holoroom Test Drive: Lowe’s Reinvents ‘Try Before You
Buy’ with Virtual Reality: https://blog.vive.com/us/2018/06/18/holoroom-test-drive-
lowes-reinvents-try-buy-virtual-reality/

Grensing-Pophal, L. (2018, Mar 29). How Lowe’s Leverages Virtual Reality to Train Employees.
Retrieved from HR Daily Advisor: https://hrdailyadvisor.blr.com/2018/03/29/lowes-
leverages-virtual-reality-train-employees/

Insights, W. (n.d.). Here's How L'Oreal is Using Augmented and Virtual Reality to Create In-Store
Experiences. Retrieved from FUTURE STORES:
https://futurestores.wbresearch.com/blog/loreal-augmented-reality-virtual-reality-in-
store-experience-strategy

Khadka, R. (2020, March 26). Effects of Egocentric Versus Exocentric Virtual Object Storage
Technique on Cognition in Virtual Environments. Retrieved from
https://ieeexplore.ieee.org/: https://ieeexplore.ieee.org/document/9090509

14
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment
MCO 608_ Managing a Contemporary Business Information System

Lunden, I. (2017, September 13). IKEA Place, the retailer’s first ARKit app, creates lifelike
pictures of furniture in your home. Retrieved from techcrunch.com:
https://techcrunch.com/2017/09/12/ikea-place-the-retailers-first-arkit-app-creates-lifelike-
pictures-of-furniture-in-your-home/

Release, P. (2018, 11 20). A glimpse of the future: BMW Group uses virtual reality to design future
production workstations. Retrieved from BMW GROUP:
https://www.press.bmwgroup.com/global/article/detail/T0287223EN/a-glimpse-of-the-
future:-bmw-group-uses-virtual-reality-to-design-future-production-
workstations?language=en

Strohanova, C. (n.d.). How to Bring Value to Customer’s Shopping Experience and Increase Sales
with AR. Retrieved from Jasoren: https://jasoren.com/how-to-bring-value-to-customers-
shopping-experience-and-increase-sales-with-ar/

UniQlo's magic mirror. (2013). Retrieved from RETAIL INNOVATION: https://www.retail-

innovation.com/uniqlos-magic-mirror

Weinberger, M. (2015, Sep 19). This app saved me $120 in Las Vegas — and can save you even
more. Retrieved from https://www.businessinsider.com/:
https://www.businessinsider.com/how-to-use-myvegas-to-save-money-in-las-vegas-
2015-9

Woodford, C. (2020, June 5). Virtual reality. Retrieved from Explainthatstuff:

https://www.explainthatstuff.com/virtualreality.html

15
12-01087_Mai Nguyen Hoang Nam_MCO 608_Final Assignment