person wearing a VR headset pointing their finger at the camera
PHOTO: Hammer & Tusk

Augmented reality (AR) and virtual reality (VR) have the potential to shake up the customer experience by individualizing retailers’ offers and enabling customers to visualize products in different settings. In fact, recent research from Gartner showed that by next year 100 million consumers will be using this technology to shop online and in-store.

The Gartner survey indicated that by 2020 46% of retailers plan to deploy AR or VR solutions to meet customer service experience requirements. Additionally, the technologies behind these solutions have moved 15% to 30% further along the Gartner Hype Cycle over the past 12 months. However, given that AR and VR technologies are still developing, predicting 100 million consumers will be using it by next year seems on the optimistic side.

Lets be clear, AR and VR are already making an entry into the digital workplace. The Global Mixed Reality Market size is expected to reach $2.8 billion by 2023, rising at a market growth of 77.3% until 2023. Mixed reality (MR), also referred to as hybrid reality, is the technology that is used to merge real and virtual worlds and produce new environments and visualizations where physical and digital objects co-exist and interact in real time.

The mixed reality market will witness rapid growth due to increasing demand for innovative and wearable products. The aerospace and defense sectors further add to the market expansion as the mixed reality products can be used in training programs. This is not the same, though, as 100 million consumers using it for shopping.

Related Article: 8 Augmented Reality Companies Changing the Digital Workplace

AR and VR as Retail Tools

Evan Gappelberg, CEO of NexTech AR Solutions, a technology company developing web-and-app based AR solutions for education and ecommerce, points out that AR technologies for ecommerce have scaled-up rapidly in the last few years due to increasing shopper demand and brand adoption, which has given the technology a tremendous amount of exposure

As more brands offer these features online and in-store, the technology will likely continue to mature so that shoppers feel they’re getting the best possible experience. For instance, most early-adopters of AR for ecommerce offered these features through an app, which required the help of a web developer.

One area where AR can really explode and reach smaller budget online retailers, is through the introductory of web-based AR solutions. This will enable any retailer to add AR and 3D product previews to an existing ecommerce store using a simple line of embed code, rather than hiring developers. Web-based AR will democratize the experience by allowing brands of all sizes to offer the immersive AR features shoppers demand.

Another area where AR will expand to improve the customer experience is through integration with other technology innovations to further streamline the ecommerce experience. This might include using artificial intelligence to gauge a shopper's expression when they preview an item using AR. For instance, if a user smiles while virtually trying on a pair of sunglasses, they might be prompted to buy the product then and there. Conversely, if they don’t seem pleased with something they are demoing, other suggestions might be offered.

AR/VR Builds Confidence In Products

In fact, retail may very well be the most effective use case of AR at the moment. When customers can test out products in context, it increases their confidence in their purchase and greatly increases the likelihood that it fits what they're looking for, said Eric Weber, CXO of Prolific Interactive. That has a direct impact on conversion rates, return rates and customer loyalty and retention. You'll also be able to sell your higher-priced items that would previously be perceived as too risky to buy online. “This isn't a turn-key kind of thing, unfortunately. It takes clever design to intuitively map interactions on a 2D surface (the device screen) into 3D space. There's an extra level of nuance in designing and testing those kinds of interfaces,” he said.

There's also particular expertise required to produce 3D models and textures that are as accurate and convincing as possible within the constraints of the hardware and platform. So even if you're looking at a platform promising everything out of the box, you will want to put content quality and user experience first, and make sure no corners are cut there.

He cites the launch of Apple’s ARKit for iOS11. Home improvement merchant Build.com partnered with Prolific to use it to create an AR experience, their “In-Home Preview.” Build.com launched the augmented reality tool on its site in 2017 allowing shoppers to view a few dozen of its products to-scale in 3D via their smartphone screens. What’s interesting about Build.com’s AR feature is that shoppers can interact with the 3D products, such as turning on a faucet and opening the drawer in a vanity. Build.com works to animate all of its 3D models so shoppers can confirm everything will fit well in their homes. As a result, Build.com claims that:

  • About 5,000 shoppers a month use the AR feature, and Build has found that on average, shoppers that use AR visit Build’s app or site twice as often each month as opposed to non-AR shoppers.
  • With the AR feature shoppers can interact with the 3D products.
  • The return rate for shoppers that use its AR function is 22% lower than shoppers who didn’t use the tool and bought the same product.

Related Article: 6 Ways Businesses Are Using Augmented and Virtual Reality Today

AR or VR?

It is important to note that while research doesn’t usually differentiate between AR and VR, they can be quite different for ecommerce. G2.com's ecommerce research principle, Gabriel Gheorghiu, points out that the difference is that AR doesn’t always require hardware, while VR does most of the time. On the consumer side, smart glasses or virtual reality headsets may be needed, and retailers may need tools like fashion virtual fitting.

From a consumer perspective, smart glasses and VR sets may be affordable, but how many people would buy them to improve their online shopping experience? Not many, according to research that estimated the total number of smart glasses will reach 28 million in 2022, while the number of users will reach 1 billion by 2020. Furthermore, the number of users of AR and VR software will increase mostly in video games, live events and video entertainment. “From a business perspective, AR and VR technology isn’t exactly something that you can just turn on and start using. "You usually need to feed the system a lot of information, such as 3D models, patterns, specifications and product details, and you need hardware for gesture and facial recognition and motion capture," he said.

Basic AR, like superposing images or videos on real-life environments, will probably become mainstream soon, but more advanced types of AR and VR are still complex and costly for most companies and more likely to be used by large retailers.

AR and VR Are Maturing

With the ways that brands are currently looking at incorporating AR into their shopping experience, the technology should almost be fully mature enough for consumers to use by 2020, according to Craig Peasley, director of product marketing at Magento.

Brands such as Charlotte Tilsbury and ikarus, both Magento customers, are already leveraging AR for engaging consumer interaction and pre-purchase experiences. For example, icarus allows for potential buyers to easily bring its furniture to life within the customer’s own home through 3D models. By moving, rotating and examining from all angles, customers can get a better understanding of how furniture will look and fit into their familiar surroundings. Similarly, Charlotte Tilbury created a “Magic Mirror” in-store that allows customers to virtually try on one of its 10 iconic looks in a matter of seconds. As AR techniques gain popularity and the tech capabilities continue to mature and grow, 2020 is slated to see a more powerful consumer experience driven by AR than ever before.

"AR and VR solutions are slowly progressing from buzzwords to having legitimate use cases, but seamlessly blending digital experiences and physical retail in a realistic manner can be complicated," he said. At this point, the retail industry doesn’t appear to be fully ready for widespread AR integration, and with brands and consumers not seeing them as critical to the shopping industry, it could remain this way for the foreseeable future.