How augmented reality is revolutionizing e-commerce

In addition to all the negative news from the economy that we are bombarded with every day, there is one sector in particular that cannot complain about a lack of attention from customers: Online retail.

In times when we are all expected to stay at home whenever possible, it makes sense to run our errands online. Accordingly, the available delivery slots at Coop@home and LeShop are fully booked for a long time.

However, the growing sales and profit figures in the online sector are by no means a coronavirus symptom, but part of an ongoing shift away from bricks-and-mortar retail. The growth of the e-commerce market is impressive:

Mobile commerce (m-commerce) in Switzerland, Europe and globally from Aioma AG

An increasingly large proportion of this business is attributable to transactions made from mobile devices such as smartphones or tablets. In 2016, m-commerce accounted for more than half of the global e-commerce volume for the first time. This share is now over two-thirds, and the trend continues to rise.

In addition to ever better hardware with larger screens and constantly improving store systems, the main advantage of m-commerce is obvious: the smartphone is always in your pocket, purchases can be made conveniently via the credit card stored with Apple Pay between checking the latest Instagram stories and reading the daily news.

Despite all the convenience, there are still areas in which bricks-and-mortar retail has clear practical advantages over online retail. For example, when it comes to deciding which color of a new sneaker looks better on me or how big a piece of furniture actually is, there are still narrow limits for customers on their cell phones.

This “final frontier” could now also fall thanks to augmented reality.

Augmented reality is the enhancement of the real world with digital data. Basically, it involves using a device (smartphone, tablet, AR glasses) to display data such as 3D models in space, thereby merging the real world with the digital world.

This is made possible by ever-improving hardware and software. Depth and motion sensors on smartphones and tablets ensure that they can recognize surfaces such as floors and understand their relative movement. This is how the device knows where we have placed something.

Screenshot from “Adobe Aero“: The iPhone sensors recognize the ground and place a point layer on which the 3D data can be anchored:

This naturally opens up new worlds for online retail. If customers cannot or do not want to come into the store, this relationship must be reversed. In other words, to bring the products to the customer’s home.

Online wholesalers such as Zalando have long understood this and therefore send their products to customers’ homes and back again free of charge. However, this involves a logistical and financial effort that very few companies can afford.

So the challenge is to find a way to make a product available for customers to try out at home without having to send it back and forth. Augmented reality makes this child’s play.

Of course, every functional expansion of the web store or website involves an initial outlay. Ideally, this should be amortized through additional revenue.

The technology has not yet been on the market long enough for precise statements to be made. However, initial studies on the subject are very promising.

Let’s stay with the example of furniture. According to the home study by German furniture retailer Otto, “How does it look?” is the most important criterion when buying furniture. The second most important criterion is functionality. Or in a mixed form:

“What does this look like in my home and how does it fit into my existing interior design concept?”

Studies by the University of Lucerne also show that consumers are willing to spend more money on a product that they can view in AR than on traditionally presented products. In addition, the barrier to purchase is lowered, which further strengthens the effect.

A study by invespCRO came to the same conclusion, finding that 40% of users were willing to pay a higher price for a product that they had previously been able to view in augmented reality.

A look at the consumer group that has used AR the most to date also reveals some very interesting figures: A study by ARtillery shows that high-income users between the ages of 25 and 44 use AR applications particularly frequently. This is precisely the target group that is of particular interest to marketers and store owners:

The examples above show what is already possible for companies. Until now, however, an app was always required for implementation. Despite all the advantages that an app brings, there are also a few hurdles. On the consumer side in particular, the effort involved in downloading an app is significantly higher than browsing the web store via a mobile browser.

There is good news for all those companies that are still shying away from having their own app: AR technology has recently become available on the web. This means that even small and medium-sized online stores have the opportunity to make their products available to customers via augmented reality. With today’s possibilities, it is even easy to redirect the user from the desktop to the smartphone and thus into the AR application.

The easiest way to augmented reality for store operators is Genie AR. Insert the button into the product description – done.

One of the first companies in Switzerland to use the technology is the online plant retailer feey. The plant retailer’s store is a good place to test the advantages of AR in the user journey.

In summary, the following can be said:

• Online retail via smartphone is growing rapidly
• Thanks to a technology push, augmented reality is also on the rise
• Initial studies indicate that AR will be a strong sales driver in m-commerce
• Thanks to Web-AR, the technology is also affordable for small and medium-sized companies

Interested in adding AR functionality to your website or webshop? We would be happy to advise you and explain the various possibilities.