Blog

Introduction

The development of technology has changed many of our daily habits - beginning from how we interact with other people to how do we shop. If we think that we have seen everything in e-commerce, then we are wrong. Another revolution in e-commerce is just ahead of us - Augmented (AR) and Virtual Reality (VR) are coming.

Every year we notice incoming trends that will appear in the next 12 months. From observations we can conclude that e.g. 2017 was the year of the machine - the most important topics were: machine learning, autonomous vehicles or robotics. 2018 was the year of Artificial Intelligence: chatbots, virtual assistants, etc.

According to analysts, in the near future we will focus on looking for the next level of communication between man and tech-device. In addition to the practical application of technology, which facilitates our functioning in the virtual world, it equally affects our experience in the real world. One of the spaces where Augmented and Virtual Reality technologies can have practical application is e-commerce.

Augmented Reality

Augmented Reality (AR) is a technology involving the overlap of virtual 3D objects generated during operation on the image of world reality, using image management devices (e.g. glasses, cameras, smartphones, tablets, etc.). In Augmented Reality, it is possible to move in three dimensions - virtual objects adapt to the position in the same way that physical objects do in the real world.

This allows the user to first of all check how the product composes with the environment in which it would ultimately be located. Augmented Reality also allows creating interactive materials, books, catalogs that come to life when viewed using dedicated applications.

Augmented reality creates enormous opportunities for all areas of the economy - in every business there are processes in which AR can be used. Currently, AR technology is a very desirable functionality in mobile applications - it creates an ideal opportunity to build innovation in the company and stand out from the competition.

Development direction of Augmented Reality

The interest of marketers and the largest technology companies is directed towards a solution available to consumers - both in technical and financial terms. Augmented reality comes to the rescue, which we know best from social media.

For example - Snapchat proved that Augmented Reality gives us a lot of satisfaction. Face recognition technology, which was then implemented by Instagram Stories and Messenger with millions of users, meant that Augmented Reality is at the fingertips of every consumer or rather his smartphone.

Currently, content created for the needs of Augmented Reality replaces leaflets, guidebooks, sales catalogs and a visit to a stationary store. Properly prepared content for AR extends the experience of shopping online.

Augmented Reality in e-commerce

Selling products online gives great opportunity to significantly increase company revenue through the use of this increasingly popular sales channel. The decision to take such a step involves a number of challenges that must be faced to sell effectively and most importantly, profitably.

Retailers in various industries use e-commerce opportunities prioritizing online sales channels and online customer service. Online sales, especially through mobile channels, still causes a lot of problems for sellers. Mobile customers can be counted as more than half of all e-commerce traffic, but conversions in this channel are still lower than for desktop computer users. Augmented Reality is an innovation that can fill this gap and bring real benefits to both sellers and buyers. AR can become a tool that distinguishes a company from the competition, providing real value in the areas of consumer involvement and conversion.

As mentioned before, AR is a technology that in real time "overlays" virtual objects or holograms on the image of the real world. Although most companies currently perceive AR as future innovations, there are already examples of the valuable use of Augmented Reality in eCommerce, in particular on mobile devices. AR technology is able to ensure the physical presence and visualization of the product during the decision process of the online customer, which has a significant impact on a positive purchasing decision.

Conversion rates for customers buying using smartphones are much lower than for customers shopping on computers - there are several reasons why retailers notice the difference between these conversions. One of them is the trend - the majority of e-commerce sales are made via stationary computers. Consumers who use mobile devices are more likely to just browse catalogs and products instead of buying. Another reason is a disturbing factor - most mobile devices were not designed for online shopping. Small screens and slower loading time of websites made it difficult for users to make purchase decisions, especially when using the ability to compare products. This often resulted in cancellation of the purchase. Currently, along with the dynamic development of mobile devices, this problem is becoming less and less important.

Still, the main disadvantage of online shopping is that some human senses (like smell, touch, taste) which are used when making purchases are ignored and customers have to depend on vision or hearing only. When shopping online, the customer cannot touch the product and see how it works. There is no way to find out and see if this product will fit inside his home. Lack of this type of interaction leads to unstable purchasing decisions and frequent cancellation of online shopping. Fortunately, the growing presence of Augmented Reality technology in the sales industry can potentially solve some of these problems.

Usage and examples of AR technology

The combination of retail and innovative AR technology is not as incredible as it seems. It turns out that it is possible to meet the needs of consumers precisely using Augmented Reality technology.

The consumer benefits of online shopping are constantly increasing. The "online customer" has access to many functional options: product reviews, online payments, product configuration, personalization and many more. Currently, digital sales channels and sales in stationary stores should be consistent in terms of image and process. Only this combination will create an image of the company that is in line with the omnichannel approach.

Technology such as Augmented Reality allows sellers to offer a more personalized approach to the customer and totally change the way of shopping. That is why many companies now use Augmented Reality to make the online buying experience similar to buying a product at stationary stores.

Augmented Reality technology usage ideas

Low level of consumer confidence contributes to high rates of abandoned carts. AR technology helps with solving this problem. The buyer can scan the product packaging and easily see what's inside, without having to unpack it. This type of opportunity can significantly reduce the level of costly returns to producers due to damaged packaging.

Shoe brands are using innovative Augmented Reality technology to show customers before buying what new shoes will look like on their feet. Thanks to the application, the customer can choose any model from the catalog and simply point the phone at his foot to see how the virtual shoe will look. What's more, these applications also often support “try and buy” option, so the customer can browse and virtually try on products and then purchase them.

When it comes to furniture manufacturers, their customers can choose various items from the catalog to see how the assembled furniture or other piece of equipment will look like in their home before buying. This application works great because it helps buyers make purchasing decisions by answering questions that are bothering them: Will this sofa look good in my living room? Will this bed fit in my bedroom? Augmented Reality helps customers to answer these questions themselves, which positively influences their purchasing decision.

Augmented Reality and competitive advantage

Nowadays, consumers can interact with the brand in stationary stores, online stores, mobile applications or via social media. All activities in these areas should be coherent and interact with each other on a synergy basis. Augmented reality can be successfully used to increase the attractiveness of shopping both online and offline.

In the past, the scope of product personalization in the e-commerce channel was very limited. Currently, the ability to personalize products is the norm and basic standard. Consumers expect this approach when purchasing in stationary points and increasingly also when shopping online. AR is the best way to visualize products sold online, because it allows you to determine how a given product will look in its target environment.

One of the most important advantages of the Internet is instant access to information. The internet has forever changed the way people work, meet, and what is most important from the commerce point of view, the way they shop.

Over the past decade, the evolution of e-commerce has taken place in several stages. Just as the Internet has become a new and competitive channel for marketing, communication, entertainment and purchasing services, e-commerce has become a competition for the traditional way of shopping.

Initiated by giants such as Amazon ( joined the e-commerce industry in 1995), and Google and PayPal (launched their sales platforms in 1998), the development of the e-commerce industry since then is still uninterrupted.

The largest changes in the sphere of e-commerce over the past ten years results in the increased number of e-commerce and mobile markets. We can also mention the greater role of digital marketing as well as the introduction of functionalities based on Augmented Reality technology. We can treat these changes as milestones in e-commerce innovation.

Online sales platforms

Over the past ten years, online stores have become the most popular places for distributors to conduct sales, for marketing experts to conduct promotions and for consumers to shop. Currently, most popular brands offer online shopping for their customers. The development of online platforms such as Amazon has allowed consumers to become more confident in their shopping choices and to do so in a pleasant and comfortable way.

Amazon launched its e-commerce website in 2001, since then continuously introducing innovations in the industry such as drone delivery or the creation of a dedicated AR Sumerian platform. Apple has also become interested in AR technology in the e-commerce industry, resulting in signing a strategic partnership with the popular Shopify platform. Also, in 2006, Google contributed to the development of the industry by introducing an easy online payment process using Google Checkout.

Online stores allow consumers to find a variety of products they are currently looking for. They can compare prices, brands, read customer reviews and often buy cheaper than in stationary stores.

In the area of online stores and sales platforms, new players regularly appear who very often gain dominance in the highly competitive world of e-commerce. Jet.com is an e-commerce platform that has become popular in the current millennium due to very competitive prices. Walmart announced its decision to take over Jet.com in 2016 and added an e-commerce platform and distribution of products in the Walmart store network. Tesco Online is another popular platform (especially in Europe) that allows to buy groceries and household goods along with their delivery directly to the customer's home.

In addition to websites, the Magento platform is also very important as it supports the development of the entire e-commerce industry. Magento is a leading "open source" platform that provides e-commerce extensions for third-party platforms. Magento still ranks high as the most popular e-commerce platform, accounting for over 1/4 of the e-commerce platform market share. The e-commerce platform system is constantly evolving, which grants better and more personalized customer service.

User friendly sales methods on mobile devices

One of the most important elements of e-commerce evolution in recent years is the ability to browse, compare and make a purchase on user-friendly, responsive mobile websites or mobile applications using a smartphone or tablet.

Making purchases from a mobile device has become an inseparable tool accompanying consumers always and everywhere. People can make shopping decisions using only a smartphone without entering a stationary store at all. Currently, mobile commerce accounts for almost 1/3 of online sales. The number of people who used the smartphone to pay for products and services increased in 2017 to 9 million in the US, which is a major jump compared to 2008.

However, many sellers do not prioritize their mobile platforms, even if they know how strong an impact they have on overall sales. Along with the development of mobile applications for Android and iOS environments, m-commerce has the ability to attract more customers who shop using mobile devices. Push notifications available in the applications are an advantage that can be effectively used to engage clients and promote services. The use of AR for mobile devices should also not be overlooked - because it is already becoming more and more popular.

Virtual Reality and Augmented Reality

Mixed reality (MR), virtual (VR) and augmented (AR), through their dynamic development, have the potential to dominate the future of e-commerce. These interactive technologies are making online shopping more and more realistic.

Giving an example - in 2016, in cooperation with the Australian company Myer, eBay launched the first virtual reality (VR) store. Buyers can now browse thousands of products through VR glasses. Instead of using hand-controlled controllers, service users can select items using only their sight. The company has created a mechanism called "eBay Sight Search", thanks to which you can select items of interest by focusing on a given product for a few seconds. This is one of the first cases of implementing the possibility of shopping in VR technology.

However, it seems that a technology with a much broader spectrum of applications in retail and e-commerce is Augmented Reality (AR). It turns out to be more practical for online customers, because AR combines virtual elements with the real environment without the requirement of having expensive, dedicated hardware infrastructure, which is necessary in the case of VR technology. The integration of AR with e-commerce portals changes the way consumers shop, offering them a much more immersive and personalized experience.

When buying online, consumers only guess and imagine what a new bed or desk will look like in their apartment. Many consumers do not even go through the browsing phase because of the uncertainty and risk associated with online shopping. However, using AR technology, the customer can choose products, for example, furniture that interests him, and then see how the selected furniture will look in his home. Thanks to the use of Augmented Reality, the customer has the opportunity to see the selected product in real time before making a purchase decision - visual designing the interior reduces the customer's doubts if the product will fit and look well in his apartment. In this way, the chance of abandoning the shopping cart decreases.

Augmented Reality has unlimited potential in the area of e-commerce, and top brands are looking for innovative ways to use it as part of the sales process to accelerate and increase the profitability of the sales cycle. Augmented Reality mobile solutions are introducing another revolution in the field of modern online shopping.

The future of sales at stationary points

A new look at retail sales is given by use of omnichannel - by ensuring a consistent sales and service concept implemented across all sales channels, both stationary and online.

Omnichannel sales is based on constantly introducing new innovations and creating a coherent strategy that encourages both online and offline purchases. The future of retail lies in changing the online shopping process, providing the customer with the same benefits as in a stationary store.

Convenient and easy online shopping, especially on a mobile phone, currently faces many obstacles that have the chance to be resolved in the coming years precisely through AR innovations. An example of such a problem is the fact that when you buy electronics online, more than half of the goods are returned without finding a defect; often consumers do not understand how to use the product properly. AR technology comes in handy, which in an easy and interactive way (e.g. using 3D animation) can present a user's manual for a given device and reduce the percentage of costly returns.

Implementation of Augmented Reality in sales

  • Challenges: The implementation of Augmented Reality technology is associated with meeting a set of prerequisites that all those who would like or plan to introduce AR technology into their mobile applications and online sales channels need to know.
  • 3D modeling: Augmented reality is similar to other digital technologies - it is currently used primarily by mobile devices and is much more engaging for consumers. At the same time, AR differs from other innovations in terms of content that this technology displays and uses. Instead of pure data (compared to traditional media types), Augmented Reality works mostly on the basis of virtual 3D models. 3D models are integrated with the real world using a mobile device. If manufacturers do not have their own 3D repositories, they are usually using ones created by the AR service provider. Models with low quality and poor reproduction can make the consumer experience different from what the seller might expect. What's more, data loading times on e-commerce platforms are crucial here. Every millisecond counts, so it is important that in addition to high quality reflecting product realistics, 3D models are optimized for use in Augmented Reality solutions.
  • 3D scanning: The sales industry has the largest range of products and services offered among all industries. This results in the need to prepare a relatively larger amount of marketing materials and even photos of products, which may eventually be thousands. As mentioned earlier, the AR application requires displaying 3D models using a mobile device. Fortunately, there are methods for quickly and efficiently creating 3D models of the offered products. It is e.g. a method of 3D scanning of real objects placed in special stationary scanners for small items (e.g. jewelry or footwear) and larger items (e.g. furniture or industrial machines) can be scanned using hand-held scanners.
  • Markers: Depending on the business process and needs, AR can be implemented using markers (also called trackers) or without them (so-called markerless technology). Marker is a physical object (for example an advertising booklet cover or product packaging) that AR technology uses to place a 3D model in space. After placing the marker in the camera view of the phone used by the user, the application automatically presents a 3D object and places it in the real world. For larger objects, such as furniture, it is rather advisable to use markerless methods. They do not require physical markers, but are based on space analysis to find the right place in the real world, and then place virtual content in AR technology.
  • Web AR: Thanks to the new, unified standard of AR technology, it is possible to display 3D models in AR mode, directly from a website or e-commerce platform, without the need to install additional applications. The implementation is as simple as placing a new photo on the website (done through the html environment). The functionality is available for mobile devices with Android (supporting ARCore technology) and Apple ARKit with iOS12.

Summary

AR technology is not only a "nice-to-have marketing" that has no value - it is a useful business tool that saves time and money. Proper usage of Augmented Reality solves the problem of buyer uncertainty, reduces the number of shopping cart abandonments and increases the conversion of mobile customers, regardless of the product offered. AR is also an ideal solution to reduce the number of costly product returns by consumers.