VR in IR:
The next step in investor relations?

Today’s investor relations (IR) teams have a challenge on their hands. Can they marshal and distribute the latest key data about their company before anyone else? Michal Kendereski, Digital Director, Luminous, discusses.

Horizon scanning shows no likelihood of this challenge diminishing; in fact, other technologies will need to be mastered and managed. Virtual reality (VR) is a technology yet to find mass take-up (although tech analyst firm IDC has predicted global sales rising from over eight million headsets in 2019 to more than 36 million by 2023, with over half of those being bought by the business market), but it already has interesting niche applications in, for example, training medical staff to carry out intricate procedures or allowing those employed in hazardous environments to practise, virtually for real, manoeuvres and techniques new to them. As the technology advances, price points will decline and the marketplace of applications (both consumer and business) will continue to expand exponentially.

But how will this impact the world of IR? Although VR technology is moving quickly and becoming increasingly popular, it’s fair to say that it has not yet gained widespread usage and producing content is neither quick nor cheap. So, while IR might not be flying the VR flag at the moment, the future could be very different if we consider how it might be used in the following scenarios.

Imagine the potential for such technology at a capital markets day. Rather than put up yet more PowerPoint slides, you could convey the analysts and investors to a virtual world.

Large investor events

Imagine the potential for such technology at a capital markets day. Rather than put up yet more PowerPoint slides, you could convey the analysts and investors to a virtual world and let them see and hear your new manufacturing site or proposed theme park and its rides in action. This, in fact, was how investors at a recent Babcock International capital markets day were given an immersive tour of one of the company’s state-of-the-art warships. Such a trip may well not have been possible in the real world for time, other logistical or security reasons. But in VR, there are not the same constraints nor any investor transport or off-site catering to organise; cost savings can be significant and your carbon footprint will be a little lighter than it would have been, particularly where overseas trips are concerned.

Site visits

As research has become commoditised and asset managers seek ever more bespoke interactions in order to gain unique insights into a company’s operations, increasing value is being put on site visits. Whether it is a factory or R&D centre tour or a store visit, the opportunity to take a first-hand look at a company’s operations with in-depth commentary from the IR team is an important part of the investment process. The challenge is the time and cost required to commit to these trips – the majority of facilities are located well away from the major financial centres, so a visit to a company’s operations is a major undertaking, involving flights, complicated logistics and valuable time spent out of the office. Likewise, these tours are also a time-consuming endeavour for the IR team and executives tasked with hosting the individual.

The use of VR in this context takes away the pain of organising these bespoke tours and significantly widens the potential audience. The IR team could produce detailed tours of their operating facilities, overlaid with expert commentary and pertinent financial details.

Product run-throughs

Another technology that could have very interesting applications in the corporate world is haptic technology – otherwise known as kinaesthetic communication or 3D Touch. Haptics create a sense of touch through the user experiencing forces, vibrations or motions. An example that most people will be familiar with is when their smart phone mimics finger tapping or pressing and releasing sensations as they use it. Haptic technology has enormous potential to be used in a business context, for example allowing remotely located investors to ‘feel’ a company’s products. A description of the products, with predicted sales figures etc., could be given simultaneously by the relevant team. The overall experience is very much an immersive, engaging one, with the user ‘living’ the company’s brand and products much more intimately than if they were to simply access them using traditional printed and online channels.

Whether in biotech, IT, manufacturing, retail, property development or the already mentioned health and hazardous industry areas, VR has the potential to make a powerful contribution to your investment case. And as MiFID II shows that it’s more important than ever to own and tell your investment case story, those who start planning for VR’s implementation now will be best placed to reap the rewards.

If you would like to know more about how you could better embrace digital communications or emerging technologies such as VR in your investor relations, please get in touch.

michal.kendereski@luminous.co.uk