The evolution of Spatial Commerce

I’m sitting on my couch at home, watching my children during their screen time: the older one is immersed in a multiplayer session of Fortnite, and it’s interesting to see how every afternoon he meets his classmates in the lobby, discussing between matches about the new game skins they just bought with the virtual currency “V-Bucks” and how this will influence their outfits at school the next day. The younger one, on the other hand, is engaged in one of the many virtual worlds of Roblox: he is selecting one of the available cars to race with, and it’s incredible how he knows more about car brands than I do and how he is becoming attached to some of them.

These are much more than “gaming” platforms; they are genuine brand experience spaces where users socialise, express themselves and, most importantly, purchase digital and physical goods.

A generational issue

As the purchasing power of new generations increases, specifically Generation Z, the retail landscape has undergone a significant transformation. The way Z consumers interact with brands and make purchasing decisions has radically changed. This generation, known for its digital savviness, is redefining shopping experiences by leveraging new platforms and technologies. Snapchat and TikTok are revolutionising how young consumers discover and share products, using AR filters and virtually trying products before buying.

These tools allow them to see how a product would fit into their daily lives and get real-time feedback from friends and family, turning the shopping experience into a social event. This trend indicates a broader movement where digital interactivity is becoming essential.

The integration of augmented reality and immersive technology in shopping meets the needs of an increasingly digital generation and represents an extraordinary opportunity for brands to innovate, solidifying their relationship with their customers.

At Sketchin, we see this convergence of retail, e-commerce, immersive technology and artificial intelligence (AI) as a crucial moment. For example, AI-enabled shopping assistants are becoming more common, offering personalised recommendations and simplifying the shopping process. This benefits the customer experience, increasing engagement and brand loyalty.
Our perspective is that this integration creates new opportunities for brands to connect with their customers on a deeper level, creating physical and digital spaces that enable the expression of themselves and their values.

What do we mean by Spatial Commerce and why is it relevant?

The development of technology is driving these new consumer habits at an overwhelming, fast, and exciting pace. The technological trajectory is decidedly clear: from the era of personal computers to the Internet revolution to the explosion of smartphones, technological development has always had a clear objective: to reduce the inertia between physical and digital. It is in this context that what we define as Spatial Commerce is taking shape.

With the growing influence of AI assistants in purchasing decisions, it becomes crucial for brands to maintain their relevance by aligning their values and experiences with those of their customers, regardless of whether the store is online or physical. Every space becomes an opportunity to create meaningful experiences, avoiding interactions becoming mere AI-mediated transactions without any brand involvement.

The importance of AI Assistants and the role of visualisation in product narratives

Today, we are witnessing the disruptive nature of smart agents that, integrated into our devices, will perform many increasingly complex tasks for us. They can conduct research for us, select the best products, and return results through a simple conversational interaction. They can even shop for us, eliminating the need to visit the physical or digital store.

Is this the end of e-commerce designed for users? We are certainly facing a significant evolution in online shopping. However, at Sketchin, we strongly believe that not all interactions in the purchasing process will occur solely through a smart agent. The motivation lies in the brand experience. The purchase of many products is driven not only by a functional need but also by a desire to become part of a set of brand values in which consumers feel they resonate.

A space for brand experience

While AI assistants facilitate a smoother discovery process, it is crucial for brands to maintain a strong experiential promise to ensure that customers choose to experience what the brand offers. Memorability is one of the main objectives of the brand experience, and being able to rely on all human senses increases the likelihood of achieving this goal during the customer journey. Immersive technologies, such as augmented reality (AR) and virtual reality (VR), play a key role in this context, allowing consumers to experience products in an engaging and interactive way before purchasing and living memorable experiences that could never be achieved through a simple conversation with a bot.

Brands that can sell not only products but a culture with values relevant to people have a unique advantage in the immersive space.

The different forms and technologies of Spatial Commerce

It is essential to clarify that Spatial Commerce does not refer to a specific destination or channel. It is simplistic to think of it only as buying products with a virtual reality headset; this is just one interpretation we can give.

Immersion can exist in different forms and devices: from a much richer web experience enabled by 3D and virtual worlds (an example is the Walmart Realm initiative) to augmented reality where it is possible to anticipate the product, like IKEA Places, to fully immersive experiences where brands like Alo Sanctuary allow a real yoga session during product selection. We are not talking exclusively about technological destinations but also channels, from digital experiences enjoyed from the comfort of home to an enhanced physical store.

In this hybrid digital dimension, where channels integrate seamlessly, new perspectives and experiences emerge. The ability to integrate immersive technology and advanced analytics allows brands to create highly personalised and engaging experiences, strengthening customer loyalty and differentiating themselves in an increasingly competitive market.

Designing Spatial Experiences

Creating effective experiences with a spatial component requires the integration of three key elements that form the foundation of these new interactions.

• The value of play and discovery
  Integrating new engagement mechanics, many of which will come directly from game design, is crucial for spatial experiences. With over 3 billion gamers worldwide, the gaming sector makes evident the centrality of play in human behaviour. People continuously play and love doing so in different contexts. The more enjoyable and interactive an experience is, the greater the loyalty and engagement of customers. For example, applications developed by E.l.f Cosmetics integrate gaming elements to offer engaging and unexpected product discovery experiences.
  
• The value of community
  One of the most important aspects of spatial commerce is valuing and leveraging content generated by communities. Making individuals part of the brand and its values fosters deeper connections and loyalty, allowing brands to create authentic and engaging experiences. For example, using user-generated content (UGC) can significantly enhance engagement, as demonstrated by brands that encourage their customers to share experiences and feedback through social media platforms.
  
• Unlocking new brand narratives
  These two elements enable the creation of new brand narratives that resonate with contemporary consumers. The intersection of community value and gamified engagement generates new value, increasing brand loyalty and customer satisfaction. The ability to configure and personalise products in real-time through 3D rendering and virtual previews makes the shopping experience more personalised and rewarding.

The role of design

The designer’s role is evolving in this new landscape. With the right user experience and spatial interfaces, extended reality could perfectly integrate our physical and digital lives, acting as background support for daily activities while reducing information overload. However, poorly designed extended reality could do the opposite, worsening information overload by amplifying the assault of ambient noise.

With these premises, design, as always, will take on the role of interpreting technology, aiming to prioritise the objectives of companies as well as improving people’s lives.

Designers must now acquire skills in immersive technology to create these enriched experiences. The ability to create interactive and visually engaging content is crucial for the success of spatial experiences. Platforms like Shopify are developing tools that allow designers to integrate augmented and virtual reality features into their e-commerce strategies, making online shopping experiences more immersive and personalised.

In this context of evolving design towards three-dimensional spaces, at Sketchin, we have recently organised a hackathon in collaboration with Bezi to offer designers the opportunity to transfer their experience in 2D UI to immersive 3D environments. Using the Bezi platform, participants created product cards complete with details and prices for a virtual store, combining creativity and technical skills in a new context.

In the studio, we also have ongoing training programs aimed at updating our designers on emerging technologies and software to ensure that our Immersive practice continues to develop skills aligned with new digital standards.

The impacts of Spatial Commerce: what opportunities for business?

The integration of community values, playful engagement, and immersive technology is transforming how we design the shopping experiences of today and tomorrow, and it also changes how companies can leverage these technologies to remain relevant and thrive.

Many companies and sectors have already started developing Spatial shops; StockX, Decathlon, JCrew are just some of the brands that have released their version of Commerce on Apple Vision Pro and Meta Quest marketplaces. The number of brands introducing immersive and virtual elements continues to grow daily, along with the average time spent and the corresponding conversion rate.

We do not yet have a critical mass comparable to the numbers moved by tech giants, but it is an evident signal that we are facing an evolution of interaction between brands and consumers.

Where to begin?

At Sketchin, we consider every initiative and every touchpoint as a piece of a larger mosaic that is the customer experience of the companies we work with. Our systemic approach aims to make every new initiative and channel effective and efficient so that it can always be well integrated with the as-is systems within the planned customer journey.

To do this, we have developed a framework capable of outlining the best direction and form that a Spatial Commerce could have within the realities we collaborate with through a few workshops.