Augmented reality is going to completely change e-commerce for buyers and sellers alike – here’s why
In the balmy summer of 1995, an American entrepreneur who had just quit his job on Wall Street wrote a list of items he thought it would be possible to sell on the internet. It wasn’t long. He eventually came up with five contenders before narrowing it down to one – books. The entrepreneur’s name was Jeff Bezos and the company he incorporated that year was Amazon.
Two-and-a-half decades later, the e-commerce industry that Bezos helped popularise has massively exceeded even his expectations.
In 2018 alone, the industry grew by 14.2% in the US and globally is now worth an astonishing $18.84T. Not only is it possible to buy pretty much anything on the Internet (way more than Bezos’s initial five ideas), but the shift to online retailing has had a profound impact on a generation of shoppers.
Put crudely, if you are currently working for a bricks-and-mortar retailer, you really ought to be thinking about your future. In the US, UK, and across Europe, countless high-profile brands have already shut up shop – forced to close after losing customers to the Internet. There are a few sectors such as petrol stations, convenience stores, and car dealers that are holding out, but everything else is under an all-out attack from e-commerce. In the UK, an analysis by the Guardian highlighted that 1 in 12 stores have closed in the past five years, while in the US, commercial real-estate firm CoStar Group reported that in 2018, 155 million square feet of retail space has gone – a third more than the previous year.
Things are likely to become significantly daunting for real-world stores, too. An arsenal of technologies is set to address some of the weaknesses of e-commerce, giving online retailers even more of an advantage. Driverless cars or drones will accelerate delivery times, satiating consumers’ desire for near-instantaneous fulfillment. The widespread use of cryptocurrencies and streamlined digital wallets will present new payment opportunities for consumers while enabling online retailers to break into new markets.
Yet the big breakthrough will be in the personalization of products – where consumers can harness technology to optimize their purchases via mobile devices. The technology that will enable this to happen and change the industry forever is augmented reality (AR).
From a consumer’s perspective, the least satisfactory element in online shopping is not being able to interact with the product. There is anxiety associated with online shopping as customers wait for an object to arrive knowing the size or fit could be completely wrong. Returns are a massive issue for both consumers and online retailers.
From a consumer’s perspective, the least satisfactory element in online shopping is not being able to interact with the product. There is anxiety associated with online shopping as customers wait for an object to arrive knowing the size or fit could be completely wrong. Returns are a massive issue for both consumers and online retailers.
In the US alone, Statista predicts that return deliveries will cost $550B by the end of 2020, 75.2% more than four years prior. In the UK, Invesp estimates that over 30% of all online products are returned.
The challenge of delivering a more seamless e-commerce experience to reduce returns is on the minds of many entrepreneurs. But I think for many their vision is too small. The sector needs a radical new trajectory. E-commerce companies should not just be attempting to replicate the brick-and-mortar shopping experience; they need to create an entirely new shopping ecosystem that will inspire consumers.
The power of personalization
Today, AR is giving the online retailer a wealth of tools to engage customers and generate sales. These tools are rooted in psychology; they draw humans closer to the items they are interested in.
The most important examples enable users to fully see what the item they intend to buy looks like either on them (if clothing or accessories) or in their home (furniture or decorating products). This is so important for a retailer. It gives people a sense of ownership, and even though the potential customer is shopping online, they are already as close to making a purchase as they would be if trying something on in-store.
I believe that the next wave of innovation in e-commerce will be constructed with 3D face tracking software. The system harnesses mobile devices’ cameras and adds augmented reality to create filters, beautification options, and more. Customers can try items on in a fraction of the time it would take to even enter a changing room, let alone travel to a shop!
AR, especially Face AR, will become more widely used when it is teamed with other technologies such as artificial intelligence, visual-recognition software, and ultimately 3D printing.
AI could be harnessed to analyze a person’s face to determine their skin tone, age, or any blemishes, then recommend products that the consumer could try on virtually using face-tracking software. For Gen Z – a demographic with a notoriously short attention span – this innovation is ideal. It uses a format they are comfortable with and delivers something highly useful and personalized.
Choosing a product that is the right fit will no longer be a gamble. Keep an eye on how Amazon is approaching this. In an effort to take customization to the next level, Amazon acquired the 3D body-scanning company Body Labs. Most likely, Amazon will also strategically acquire an AR-based service that delivers a perfect fit for consumers.
Choosing a product that is the right fit will no longer be a gamble. Keep an eye on how Amazon is approaching this. In an effort to take customization to the next level, Amazon acquired the 3D body-scanning company Body Labs.
Personalization via AR is already happening for big-ticket purchases like cars, allowing consumers to choose the colors, style of trim, and accessories. Jaguar’s virtual interior collaboration with Blippar is a prime example.
Yet that innovation is only part of the story when it comes to personalization. With face-tracking software, customers will be able to tweak the shape, design, and colors of eyewear, jewelry, and more, after experimenting with different looks. When customers place an order, it will be for a tailor-made product via a 3D printer. At last, customers will be able to create their own products, unique to a degree that would have been dismissed as science fiction a few years ago.
More and more online retailers will challenge real-world experiences by creating virtual product aisles. These could be projected on to a living-room wall with consumers, potentially wearing AR glasses, reaching out to them using AR-driven hand-gesture technology and placing items in their virtual shopping baskets.
“Don’t obsess over data as a tool, obsess about the future,” said Zazzle cofounder Jeff Beaver a few years ago. He was right. The e-commerce boom of recent years has changed shopping forever.
Augmented reality is now set to take shopping to new and exciting places. How successful it proves to be isn’t just about the tech – it is also down to the vision and ambition of retailers.
