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October 5, 2020

Can augmented reality save e-commerce from the curse of the free return?

Shopping and e-commerce figures are constantly being looked into, but how is augmented reality changing the way we shop?

View in AR

E-commerce is nothing new, but it's now our primary method of shopping and online retailers are facing new challenges. One major stumbling block is the cost of returns that are affecting operational costs — but how serious is it?

Described as a 'major headache' that can attack profit margins, new methods are being put into place to tackle an issue that by the end of 2020 will cost $550 billion, 75.2% more than four years prior — Statista.com

Enter augmented reality. A term first coined by researcher Tom Caudell of Boeing, who used it to develop flight training technologies throughout the 1990s. But what exactly is augmented reality and why is it tipped as a tool that could tackle the issue of shopping returns?

What is augmented reality?

Cast your mind back to 2016, and you may remember the inescapable sensation that was Pokémon Go. This mobile app saw millions of people chasing animated characters that would pop up into your real world – even the bathroom!

Using your device's camera, augmented reality brings digital information and objects into the physical world as we see it.

To learn more about AR try our demo

Although we may not have heard of it in all its glory, AR has been busy working behind the scenes to change how we see the world.

It has contributed towards enhanced navigation systems, sports analysis illustration and interior design. AR is being expanded throughout all industries to allow for an enhanced user experience in ways we never thought possible. From fun Snapchat filters, to seeing how that IKEA armchair looks in your front room, experts have started to tackle the problem of returns.

New uses for AR are being discovered and you don't need to download a specific application, it's also available as a web-based solution.

AR Commerce and Value for clients

User experience is paramount to how consumers view, select and buy goods online. In today's competitive market, AR is being leveraged as a tool that can make all the difference.

The days of scrolling through pages of fixed images are fading, with enhanced innovative ways taking over.

With customers ready to part with their money, AR gives them a chance to experience the product before making a decision.

Let's take a look at a couple of scenarios to better understand how AR works for the consumer and replicates an offline shopping experience.

AR Commerce Scenario 1:

The kids Bicycle

The great all essential piece of kit that every child should own, but which one is going to be the best fit, not only for your child but the space in which you live?

With millions of bicycles on the market the choice can be overwhelming. Using the AR functions available, we can now look at enhanced 3D images that will give us the tools to make better decisions.

AR allows you to inspect every detail of the bike and you'll also be able to see how it measures against your child, all from the comfort of your mobile device.

AR view

AR Commerce Scenario 2:

The new car

The time has come to consider a new car and consider is the key word with the sheer number of variants to think about. You've decided on a brand/type and now you want a closer look.

By using what AR has to offer, you can take a virtual tour of your chosen vehicle on your device and even place it in your garage to get a real feel of the size.

AR is breaking down barriers and allowing us to be more informed about the choices we make and with such purchases, the devil is in the detail.

AR for businesses and consumers

A well-informed customer is a happy one this can be seen in the form of fewer returns, which can be financially beneficial for businesses.

AR can assist a customer with decision making that can ultimately reduce the increasing costs of returns for businesses.

2020 has shown us that businesses both big and small need to respond to the ways in which the world can change and it's looking like AR may be able to assist. AR is not limited to the business/consumer market. It also serves a purpose for high quality demonstrations at a time where physical meetings may not be able to take place.

With more online retailers entering the market, competition will inevitably increase and a company using AR may have the edge.

An important lesson that COVID 19 has taught us is that businesses will continue to move forward regardless. AR shows us that you can still have the retail therapy effect so many customers long for at a time when reduced numbers will visit a shop. Getting us as close to the 'real thing' as possible sums up why this is such a valuable and progressive tool.

AR for e-com is easier to implement than one could think!

As we've seen, AR can be used in many different ways from choosing your kids' bike to your next car or IKEA armchair. But what are the entry level requirements for businesses?

Although an app can open up more technical possibilities, it's important to note that the market is becoming overcrowded. Apps require customers to download them — something I believe we are less and less willing to do.

The good news for e-commerce is that augmented reality can be embedded into a company website with relative ease. With less financial investment than a dedicated app, businesses will be able to compete in an ever changing market.

As competition increases in today's consumer society, AR could move us closer to an area where consumers are better informed and less likely to return goods.

Author

Greg Kalucki

Greg is a Client Director and Advisor with 15+ years experience in digital platforms and services. He has supported variety of mid-large global organisations in business growth through digitalization.

Contact Greg: Greg@makingwaves.com