Get ready for the new shopping reality
An augmented reality model accessed through web browser – Web AR.
Would you order a shirt online if you couldn’t see a picture of it?
Probably not. And very soon you will not order it if you can’t try it on first – even if you’re doing online shopping from the comfort of your home.
Sounds unreal? Well, this is just one aspect of how augmented reality (AR) is changing our shopping experiences, and how retailers need to adapt to the new reality.
AR also adds additional possibilities for shopping in stores. Retailers face high prices of real estate, of keeping many items in stock, and have to deal with the sustainability aspect of producing more goods than they can sell. But what if they could present the customers with a – literally – endless aisle of goods in all shapes, sizes and colors without expanding their stores or inventories.
AR can do this. And the technology to do it on phones, tablets, in smart glasses, in interactive mirrors or using projection devices is not science fiction. It’s here, it’s real, and it’s already boosting customer engagement and conversion rates.
All about the customer experience
For online sales, the e-commerce platform Shopify and the US-based 3D technology provider Vertebrae both report of data that show increase in online conversion rates above 90% for products with AR content compared to products without.
This is no surprise to Nageswaran Vaidyanathan. He recently finished his PhD from the digital department of Copenhagen Business School with a thesis entitled ¨Enriching Retail Customer Experience using Augmented Reality¨.
Nageswaran Vaidyanathan, PhD
“The reason behind the future of retailing and how retailers continue to experiments with formats and offerings is reflected in the title of my thesis. It’s all about the customer experience,” he says.
He points to a study by Gartner from 2018 that shows how in 2010, 36% of companies competed based solely on customer experience. In 2018 that number had gone up to 89%. The pandemic has further illustrated the continued dependencies on technologies to augment retailing with superior customer experience.
“We live in a customer-driven world. It’s the informed customer, not the retailer, that dictates the desired experience. For the shopper, AR provides for new channels for shopping, and a feeling of being treated special via personalized and customized product and service offerings. Without leaving home, you can try-out options, understand the impact of the product in your home setting where and when the goods will be used, perform what-if scenarios for future needs, and have a sense of enjoyment and fun,” Vaidyanathan says.
Watch WebAR in action on an iPad
Where to start
Vaidyanathan’s research includes multiple case studies. One with MasterCard, another with Infosys, and one by the Danish design brand Louis Poulsen. The first two cases being in-store retail experiences providing customers with near-endless opportunities and immediate purchase possibilities, and the latter being an app by Virsabi letting customers interact with augmented design lamps in their own homes.
Although these experiences use different augmented reality technologies, they share a common starting point that all retailers can learn from when adapting to an augmented future. Once again, it’s all about the customer experience.
“They have used design thinking to center their solutions around the human aspect. In my doctoral research, I identified impact mechanisms that enrich retail customer experience using AR. For the retailer, it allows for redefining the customer touchpoints in their shopping journey, providing a sense of contextual control that is personalized. The touchpoints can be non-linear and allow the customer to make decisions on the product or service at their personalized convenience,” he explains.
Personalization combined with interactivity give the shoppers an immersive experience, and as everything is digital the retailer gets access to data and can combine it with data based on the customer’s history of previous purchases.
“Even for online shopping, retailers can provide a personalized, safe and secure customer experience where the shoppers feel that they are being cared for just like they would in-store,” Vaidyanathan says.
Customers and technology are ready
Given that augmented reality provides advantages for retailers and shoppers alike, Vaidyanathan is certain that the AR as part of a shopping experience will be taken for granted in a very near future.
“I’m not expecting every store to have interactive mirrors or headsets with endless aisles. But if you sell things online, you should immediately look into webAR where you show 3D models of your goods in AR straight from the website – after all, a 90% conversion rate should speak for itself. These models are done with existing technology, and customers are accustomed to them from the funny filters in their social messaging tools. With 5G being rolled out, the models can be bigger and more accurate and load faster, and the retailers can get more and better data,” he says.
The largest barriers seem to be lack of knowledge about the possibilities, the reluctance to embark on a digital journey, and then finding the right technology partner to provide the model.
“Until someone develops a drag’n’drop solution where your 3D design model is automatically turned into the right file format for AR, you need to work with one of the technology partners developing these models. But if your conversion rates almost double, then the price of turning a handful of items into AR models is a very wise business decision. AR will be the future reality of retail, and it’s a future that even smaller online retailers can enter step by step, and where the biggest brick and mortar retailers can take giant leaps to make shopping a unique customer experience and distance themselves from the competition,” Vaidyanathan says.
You can read Vaidynanthan’s thesis here.