In line with the fast approaching holidays, Best Buy reveals that half its stores will host VR headset demonstrations so consumers can experience virtual reality immersion.
Best Buy's VR headset demonstration started in May using Facebook's Oculus Rift, which was released before March ended. Hubert Joly, CEO of Best Buy, has revealed that the company plans to extend the demos to 500 of its stores during the holiday shopping season. Aside from the Oculus Rift, Best Buy will also run 200 demonstrations for Sony's PlayStation VR, which is scheduled for an October release. The demos will rotate between multiple locations.
"It's going to be really cool and fun for our customers," says Joly in an interview. "Virtual reality has the potential to contribute to our growth."
Best Buy saw a 1.2 percent decline in domestic sales during the 2015 holiday shopping season because of consumers' waning interest toward mobile devices and the peripherals that come with them. Analysts have commented that the virtual reality movement is a big opportunity for Best Buy to turn things around and see an increase in sales. The electronics chain, with its physical locations and the VR demos it is doing, is seen as a unique advantage over e-commerce distributors such as Amazon.
"We're hopeful that virtual reality turns into a new traffic driver for Best Buy," Keybanc Capital Markets retail analyst Brad Thomas tells Bloomberg.
Although Best Buy wagers to catch the public's eye with VR products and attract them to its stores, Joly remains realistic and comments that a significant impact on sales should not be expected since virtual reality is still in its early stages. The substantial cost for each VR headset is also seen as a major deterrent.
Note that the Oculus Rift comes with a $599.99 price tag, while the PlayStation VR is purported to cost $399. Factoring in the computer hardware needed for a proper virtual reality experience, shoppers would need to spend almost two thousand dollars.
Thomas comments that while VR headsets attract gamers, it's hard to gauge how many others will also grab it. Thomas also thinks that if only the hardcore gamers pick up the headsets, it could alienate other consumers, which will lead to a slowed down mainstream acceptance.
"It's so early that no outcome would surprise me," Thomas concludes.
Forrester estimates that by 2020, consumers and enterprises will put to use 52 million units of VR headsets. Super Data research expects the VR hardware market to be worth $15 billion by the same year. Deloitte Global predicts about $700 million in VR hardware sales for 2016. The figure involves the estimated sales for 2.5 million headsets and 10 million game copies.
