Augmented Reality and E-Commerce: Bridging the Physical-Digital Gap
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I grew up thinking the Mall of America was an unbelievable epicenter of retail commerce. Touted as the biggest mall in the world -- even equipped with an amusement park -- the Minnesota complex boasted stores of all kinds: toys, clothing, furniture, home furnishings. I think you get the point.
Then this thing called "e-commerce" came along and basically made the Mall of America seem like Main Street in small-town America -- less the roller coaster, of course.
With a few swipes and a click, consumers all across the country -- and world -- now have access to more goods than ever before. And they can do all of their shopping from a couch. The e-commerce craze has made shopping easier than ever, it seems.
However, it gets complicated when someone finds shoes on final sale and wonders how they will fit -- or sees a couch on Amazon and wonders how it will look in the living room. There's glassware that might fit in your kitchen cabinet, but you can't be sure.
The ease of e-commerce certainly has helped the busiest among us shop. However, the abandonment of brick-and-mortar retail has caused us to forget about certain fundamentals of commerce that make us more informed.
Wouldn't it be great if, somehow, we could meld the best of both -- integrate traditional shopping with online shopping?
I think of it this way: Let's find a way to bridge the physical and digital worlds.
Actually, we already have found a way, and it's called "augmented reality."
What Is Augmented Reality?
Virtual reality is being used in health care. It allows medical students to practice dangerous procedures and gain experience without actually operating on a human. It can also help surgeons determine the best point of entry for surgeries.
Augmented reality weaves interactive digital elements, such as informative overlays and 3D previews, with physical world surroundings. That's the technical explanation.
Practically speaking, the technology allows us to take a physical space and digitally place objects into it using the camera on our phone or tablet. It's already a vital component of social media today. Those digital bunny ears your friend is wearing in that Facebook picture or Instagram post? That's augmented reality.
AR is making its way into every aspect of our lives, as consumers are starting to see the benefits of utilizing this new technology.
Google Maps, for example, currently is testing the use of augmented reality to help with directions when walking. Instead of looking at a digital map, you soon may be able to look at the actual sidewalk and surroundings with arrows overlaid to help with navigation.
When you think about navigation, it too has abandoned some of the benefits the physical world offers. Pre-Internet, when you didn't know where you were going, you would stop and look at a map. Though that might be "analog," the digital world hasn't veered much away from that.
Yes, apps like Google Maps give us real-time directions, but we still need to consult the digital map on our phone in order to understand where we are going.
Recent advances, however, have laid the foundation for retailers of all shapes, sizes and kinds to use augmented reality as a marketing and sales tool.
Practical Uses in E-Commerce
Moving sucks. It really does. Anyone who enjoys moving is probably a masochist. There's possibly nothing more stressful than having to fill a whole new space.
Benefits of Virtual Reality
Think about buying furniture: You get out your tape measure, take note of a room's dimensions, visit a website, see if something fits, decide it fits, make the purchase, but then find out when it arrives that it makes the room look too cluttered. Or too small. Or too massive. Or not cozy enough. Or a million other different things that may force you to return the item only to start the process over.
Breathe. It's OK. Augmented reality provides a solution for the stressed-out shopper.
With augmented reality you could go to an e-commerce site that sells furniture, select what just might be your new couch or table, and point your camera at the precise point you want to place it. You can then see how that specific product might look in that specific room.
Jaron Lanier created a virtual reality device in the 1980’s (EyePhone 1/HRX) and costed up to $49,000 for the goggles and gloves.
It would be like watching a trailer of your new home. Augmented reality allows you to decorate an entire space before you actually make a purchase. Swap things out. Add picture frames to a table. Look at color schemes.
That's just one area of e-commerce.
Take the clothing industry as another example. Let's say a consumer wants to buy a pair of shoes that are on final sale. When you can't return an item, there's understandably a lot of waffling.
Shoes, in particular, all fit differently. Some are narrow, others are wide. Sizes run differently depending on the brand. Then there's determining where and when you might wear them.
Would they look good with these jeans? Or how about this dress? Do they match a particular shirt you plan to wear with them?
At the risk of sounding like a game show host, I'll stop asking questions. I think you get it. There are a lot of factors that might prevent someone from purchasing a pair of shoes.
Of course, trying them on would rid consumers of those problems, but that's not possible when making a "final sale" purchase on an e-commerce site.
Or maybe it is.
With augmented reality, you actually can try on the shoe -- at least digitally. Consumers could point their phone at their foot and see how the shoe fits. They could create the outfit in question digitally and get a feel for how everything would look put together.
Actually, the AR impact on e-commerce is endless.
E-commerce companies aren't trying to bring a date a bouquet of flowers. The end goal isn't to try to impress customers, but to continue to push product and increase margins.
Ultimately, that's the goal of any expenditure, especially one on technology.
That is the precise reason augmented reality is such a hot topic among e-commerce professionals. Augmented reality can help achieve those financial goals in a number of ways.
Among the biggest trends in the e-commerce space is to provide free shipping on returns. It's the hallmark of what has made Amazon such a juggernaut in, well, just about every industry. It encourages consumers to spend more freely, which is great for e-commerce retailers.
Free shipping is a service that costs money. In the case of Amazon, there are shipping and labor costs associated with this offering -- but it's not going away, given that it certainly is a lead driver for Amazon.
Yet cutting down on the number of returns unquestionably would increase the margins of the e-commerce companies offering free delivery. Augmented reality also has the potential to reduce shipping and other logistics costs for online sellers.
Things like product reviews certainly help to limit returns, but it's still motivated by the individual. One review isn't necessarily indicative of another's opinion.
As per the study conducted by Forbes on World’s Most Valuable Brands in October 2015, showed that 75% of these industries have created some form of virtual reality or augmented reality experience for customers or are the ones developing the technologies.
Augmented reality, however, could help limit the number of returns because of its ability to allow consumers to "try before they buy." Essentially, you maintain the best characteristics of brick-and-mortar shopping while still retaining the ease that e-commerce retail offers consumers.
In the case of large-ticket items, augmented reality actually has been improving on the "physical" shopping experience. Consider the furniture example: Consumers used to have to go to the furniture store and measure the dimensions of a piece, and then go back to their home to see if it would fit.
In this case, augmented reality is melding those two experiences, and once again, reducing returns.
Still, there exist even more opportunities to increase revenue through augmented reality. It provides e-commerce companies with a way to upsell their customers.
Say you're buying the aforementioned pair of shoes. A company could suggest pants or other garments that might go well with your initial purchase. Through augmented reality, you could see how the outfit would look all put together.
There would be a direct correlation between the technology and additional expenditures beyond that first pair of shoes.
The Bottom Line
Undoubtedly, augmented reality could be an incredible boon to the e-commerce industry.
It's like grating Parmesan on spaghetti, improving something everyone already loves. With just a few more swipes and clicks, augmented reality can help consumers become more educated shoppers.
That ultimately will help e-commerce companies increase revenues.
While the e-commerce boom unquestionably has made the shopping experience easier -- and for many, more pleasant -- it has caused society to abandon fundamentals of retail that are still critical to the shopping experience.
E-commerce has made shopping easier than ever, but that can be improved upon by allowing augmented reality to incorporate the best of brick-and-mortar shopping into the online experience.
Then the Internet truly will represent a new Mall of America.