The role of Augmented Reality in e-commerce platforms

The role of Augmented Reality in e-commerce platforms

By Chetan Sharma

In the past few years, augmented reality (AR) has created a buzz among investors, companies and the public. Many online and legacy businesses are making huge investments in AR as it is expected to disrupt numerous segments. These include retail, healthcare, logistics, tourism, manufacturing and more. One industry where AR can offer several benefits and use cases is e-commerce.

For example, a use case of AR in e-commerce could be that it is used to virtually display a product in a chosen environment, such as a room in a mansion. Furniture retailers such as IKEA offer AR applications that allow consumers to purchase many furniture products online and virtually see how that particular piece of furniture will look in their own homes. Besides displaying the product itself, AR can also display product information and support captions for customers. In e-commerce scenarios, customers often receive products that are larger and smaller in size. Here, by providing relevant details, brands can prevent loss of profits due to returns and provide a better customer experience.

Even many stock market brokers in India are using AI-based applications to reach out to existing and potential clients. They also use such technologies to understand customers’ investment behavior, website and mobile application usage patterns, and past questions asked. Companies like Zerodha, Upstox, Groww and 5 Paisa are widely using AI and ML to help customers make informed investment decisions and get customized services, like those offered by e-commerce companies like, let’s say, Amazon.

Understand and differentiate AR from VR

It is necessary to first understand what AR is about. In a nutshell, AR superimposes a computer-generated photo of the user’s real world to provide him/her with an enhanced or better version of this reality. This is done by integrating digital information such as sounds, text and images into the user’s real-time environment.

In essence, the AR concept blends the virtual and real world to provide an illusion of perfect integration for users. The virtual assets can be 2D or 3D images, sounds and videos. Often, AR is delivered through the use of devices such as smartphones or tablet applications. By generating interactive or static virtual assets, the device overlays them with the footage captured by the camera of the connected device.

At the beginning, one should differentiate between AR and VR (virtual reality) before focusing on the benefits of AR. Although AR and VR are terms that are often used interchangeably due to certain similarities, the two concepts are different.

In VR, users must wear a headset that covers their eyes and wear headphones to completely replace the real world with the virtual realm. In other words, VR isolates users as much as possible from the real world to create a virtual universe. Because of this, most VR applications are used in entertainment, especially games.

Conversely, AR integrates the simulated world with the real one. In most cases, a smartphone or tablet screen is deployed by users to achieve this goal by pointing the device camera at the object of interest, generating a live video on the screen of that particular scene. The screen then flashes relevant information about implementations such as navigation information, diagnostic data or service instructions.

It is significant that AR is also used in entertainment. The most popular example is Pokémon Go, the mobile game where players try to capture virtual creatures while moving around in the real world.

Some Future Ready Benefits

Purchase transactions via AR represent the future of e-commerce as the innovative technology offers many advantages for online retailers. Some future-ready benefits are outlined below.

Personalization of online shopping: Customers can be offered a personalized online shopping experience with AR. For example, it will be possible to virtually ‘try on’ clothes to visualize how they look afterwards. Customers can also see what sizes will fit them or check the actual product dimensions in their space, apart from other features that will solve selection problems during online shopping.

Rather than looking at mannequins wearing the same clothes, customers can imagine themselves in these garments to know which one will look best on them. Customers can ‘sample’ the products or ‘try’ the services using AR before making their purchase. The level of customization will help increase online shopping sales.

Increased customer engagement: Since AR is intrinsically interactive, customers can be easily attracted to the brand website. The longer the potential buyers stay on an e-commerce site, the greater the chances of making a purchase. Even when customers don’t buy anything on their first visit, live engagement can foster a relationship with the brand and its products. The memorable first impression makes it more likely that they will return in the future and then buy something that they found interesting when they first browsed.

Improving Conversion Rates: Better conversion rates for customers will be one of the major benefits of AR in e-commerce. If users get a better picture of the garment they intend to buy, they will be more likely to convert. When AR is used in e-commerce, online sellers can offer more engaging and immersive product experiences, leading to better conversion rates. Consumers can preview products via AR, increasing the chances of making the right choice in the first instance.

Reducing return rates: Customers often return purchased goods if they are faulty or in a damaged condition. Alternatively, buyers can return goods if they are not as per the website description. But by using AR during online transactions, returns can be significantly reduced as shoppers will be well placed to select the right products according to their needs. With AR, online brands can provide customers with more information about products, which is not possible through static images or even videos. In addition to 3D views, products can be presented as they would appear within the consumer’s space. This ensures that the chances of customers feeling short-changed are eliminated.

Considering the above benefits of augmented reality, major online retailers and customers now prefer a sales journey backed by AR. Research shows that 30% of Gen Z and millennial consumers are now looking for online shopping experiences that include AR and VR technology.1 In the future, this number is expected to rise as the benefits of these digital technologies become apparent.

The author is VP – digital marketing, Simpl

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