Why Walmart and other F500 companies are using virtual reality to train the next generation of American workers

Key Points
  • Several F500 companies, such as Boeing, UPS and Walmart, are folding virtual reality into worker education and training programs.
  • Companies have seen retention rates and productivity numbers rise when they use VR as a training tool.
  • Augmented reality is another tech tool companies are opting for to upskill their workforce.
Caption: Walmart employee trains on Oculus VR headset

Virtual reality hasn't exactly revolutionized the video game industry, like many predicted it would. The chicken-and-egg problem of a small user base and few compelling software titles, along with the fact that the physical weight of top-tier headsets discourages users from multi-hour sessions, has cooled some of the excitement.

But as that momentum has slowed, VR has found a new growth area, one that's expanding faster than anyone imagined: corporate training facilities.

Several Fortune 500 companies, such as Boeing, UPS and Walmart, are folding VR into worker-education programs on a wide scale. And some have been happily impressed with the results.

"We find that [drivers] are ... learning the verbiage much faster, and its the same verbiage they have to use when out on the road with their supervisor," said Laura Collings, training manager at UPS. "Virtual reality has unlimited possibilities. We're looking at every opportunity we can right now."

UPS uses HTC Vive VR headsets to help drivers spot potential hazards when 'driving' down a virtual road. It's a training exercise that previously involved a touchscreen, but the company realized that in using that tool, it was sending the message that it was OK for drivers to take their hands off the steering wheel.

The training takes place in the company's 11 Integrad driver-training facilities around the world. Over a five-day period, new drivers are taught in a classroom setting, given demonstrations, then put in a VR environment. Since adding the VR component, the retention rate has climbed to 75 percent.

"You can train people faster, and people learn faster in a VR environment," said Collings.

Canada's Queens University and SimforHealth are counting on that as well. The two recently paired with HTC to open a VR training facility for medical students, letting them get experience in an environment where mistakes won't be fatal to patients. The facility will open in January 2019.

"Virtual reality offers exciting ... opportunities for us to realistically simulate a wide range of clinical situations," said Dr. Dan Howes, director of the Queen's Faculty of Health Sciences Clinical Simulation Center. "We want learners to make all their beginner mistakes in the virtual environment, not on real patients."

The facility's first scenario has students taking care of a virtual patient suffering from chest pains. To save him, they have to follow the right steps and order the right tests. The 8,000-sq.-ft. facility will eventually be used for other scenarios, including postgraduate training.

The new corporate-training tool

Walmart, though, is arguably the leader when it comes to VR training. The retailer started using VR at its 220 Walmart Academies around the United States last year. Those were tethered devices, meaning employees had to travel to the academies to utilize them. But VR has become more mobile recently — and now Walmart is rolling its VR program out to roughly 4,600 stores nationwide, to help train more than 1 million associates.

Life happens in 360, not 2D video. We test our associates on the content they see. Those associates who [used] VR as part of their training scored higher than those who didn't.
Brock McKeel
senior director of digital operations at Walmart

More than 17,000 Oculus Go standalone headsets are being sent to those stores, letting employees utilize the same academy training scenarios to learn new technologies, improving customer service and compliance. And the company quickly discovered, during its early testing phase, that the program engages workers unlike anything it's done before.

"We had associates standing in line to get trained," said Brock McKeel, senior director of digital operations at Walmart. "That never normally happens. So we knew we had something."

Like UPS, Walmart has seen retention rates increase once it used VR as a training tool. Test scores at its academies have increased 10 to 15 percent when students use VR.

"Life happens in 360, not 2D video," said McKeel. "We test our associates on the content they see. Those associates who [used] VR as part of their training scored higher than those who didn't."

Walmart is working with Strivr — a Menlo Park, California-based VR training company that is on CNBC's 2018 Upstart 100 list — to develop its training scenarios. The company, which has worked with professional sports teams, raised $16 million in funding earlier this month to fuel its employee-training software development efforts.

Walmart is using Strivr's virtual reality training modules on Oculus devices to train 1 million employees who work in its 4,700 stores but are unable to attend Walmart Academies for in-person instruction. Among training topics: disaster preparedness and working at a store on Black Friday (and how to handle those crowds).

(Those scenarios, for now, remain exclusive to associates who attend Walmart Academy, but could be added to the in-store lessons at some point.)

A Walmart employee takes a STRIVR course on Oculus Go.
Strivr CEO Derek Belch left a dream job coaching football at Stanford to help others train for theirs

JetBlue, United Rentals and Fidelity are also using VR to assist with employee training. And Tyson Foods credits a 20 percent year-over-year drop in injuries and illnesses to its VR-based general safety/hazard awareness training.

Boosting productivity with augmented reality

VR isn't the only technology being used by companies these days. Augmented reality is the favored approach by Boeing, giving technicians access to hands-free, interactive 3-D diagrams as they install electrical wiring in its aircraft. That has resulted in a 40 percent improvement in productivity, the company says.

Walmart's consdering AR, but right now, said McKeel, VR seems a better fit.

"We are looking and starting to understand our place in augmented reality ... understanding what efficiencies are there and really trying to be part of the space, [but] AR has a bit to go before it gets to scale before people know where they want it to be," he said.

Both fields seem set to continue growing at a healthy clip. ABI Research predicts the total AR market value will reach $116 billion by 2023. Research and Markets estimates the total VR market will stand at $32.9 billion.

Increased retention rates are certainly reason enough for companies to be excited about using VR as a training tool, but it has an added benefit as well: cost. Training facilities cost hundreds of thousands, if not millions, of dollars to build. Sending out-of-town employees to them racks up travel expenses. And the lost time for training is considerable.

A computer capable of running a VR headset costs as little as $1,000 these days, though. And a Vive, which lets trainees explore the physical space in the VR environment, costs $499.

An Oculus Go, meanwhile, retails for just $199 and can be used with an iPhone. That's, in part, why SuperData Research believes the company will sell 1.8 million units over the next nine months.