The retail industry has been thriving by having traditional brick-and-mortar stores set up, offering physical convenience with the actual presence of whatever products a store is selling. However, the industry suffered an adverse impact of booming e-commerce transactions. In recent years, the retail market suffered huge losses and forced some companies, even the biggest and most popular brand names, to reduce operations and close some or most of their physical stores. This trend sparked the shift of companies to offer e-commerce retail transactions to their consumers, dropping the brick-and-mortar setup altogether or integrating online retail parallel with their traditional retail setup.
Beyond a doubt, the COVID-19 pandemic has tremendously affected the industry. Because traditional stores mostly rely on foot traffic for sales, limitations on people's activities and reduced capacity protocols hindered consumers' purchasing routines. This event has solidified the necessity for businesses to strategically sustain and market their products online. While this pandemic closed opportunities for many, it also opened a fresh and innovative take on business sales and marketing: strong business hybridization through maintaining both physical and online stores. This is where the integration of augmented reality in retail comes into play.
“Contrary to popular belief that augmented reality in retail is a technological future, the truth is that it's a presently progressive innovation.”
E-commerce retail also has its own limitations like traditional retail. For one, electronic transactions and online retail limit consumers to images of products. Issues of difficulty in returns and damages during the delivery of products by courier service companies are just some of the challenges in online retail. Now, AR-assisted customer service integrated to traditional voice customer support is paving the way to improve response to consumer concerns.
The retail industry is no stranger to addressing customer concerns. With this scenario, AR assistants help representatives address customer concerns like providing access to remote experts for repairs, reducing technician error and interacting with customers through visual guidance.
AR-assisted customer service decreased call turnaround and service times by 25% to 50%, increased first call resolution by 20%, and decreased dispatch requests to tech support by 20%. As direct effects, these improvements also reduced workers' burnout, improved performance metrics, and enhanced overall customer experience.
With the introduction of AR-assisted technologies, customers now can also benefit from AR-assisted self-service functions. They enable customers to use apps in their smartphones to access frequently asked questions, product descriptions, disclaimers, and other necessary data related to their retail purchases online.
As aforementioned, e-commerce transactions are in a boom, hence the need for a stronger online presence in marketing. Traditional retail is mostly limited to print out materials to promote products, but with e-commerce, nearly everything can be transformed into digital.
One of the ways AR is integrated into e-commerce is by letting customers have a sneak preview of products or services at their convenient time, breaking the need to adjust to operating hours of physical retail stores. A sneak peek of the products also lets businesses with e-commerce services to improve their products before the actual pilot release.
Shopping experience is also essential in the success of e-commerce retail. AR-driven apps allow customers to have a more interactive experience before actually purchasing products. For example, they can try out different colors and styles of clothing that will best fit their physical features before ordering the products online. The integration of AR in retail also allows the brand to promote their physical stores by introducing AR-assisted tours that will project how the customers would be able to navigate the actual place. Customers would then be able to know beforehand what to expect when they choose to buy products onsite.
The forecast for the growth of the AR market is projected to hit $70 to $75 billion in revenue by 2023 and even up to $80 billion or more by 2025. Meanwhile, AR spending is projected to reach $60 billion and consumers actively using mobile AR will increase to 1.9 billion people. With these statistical projections, many companies are adapting to the benefits of AR technologies in e-commerce. By integrating AR in retail, many companies are also able to sustain both their e-commerce and traditional stores.
Sephora, a French multinational chain of personal care and beauty stores, introduced their Virtual Artist AR app in 2018. The app enables users to try different looks using Sephora's products. This ranges from choosing makeup colors to trying on clothes to perfectly match one's preference and needs. Another feature of Virtual Artist is makeup tutorials, which enable customers to play on their looks before buying products online or onsite. By being able to virtually “try on” these products, the convenience brought by a touch of a button empowers the customer to narrow down their choices in browsing the extensive online catalog and saves time in choosing products when they choose to buy them on physical stores.
Ever experience the trouble of home furniture and appliances not fitting a room? IKEA has the answer. Launched in 2017, IKEA Place app lets customers project their desired purchases in their own space. The company has been known for its line of self-assembled furniture; hence, with the assistance of the AR-enabled app, customers will be able to see these products in their assembled form. The virtual looks of different products like tables, lamps, chairs, and sofas are realistic and were adjusted to true scale. Now, customers are ensured that purchases fit in their space and they can choose different styles of furniture matching their rooms' design.
Arguably, the most famous AR-driven app is Pokémon Go by Niantic, taking the world by storm when it was launched in 2016 and setting some milestones in Guinness World Records. Niantic integrated Pokémon, Nintendo's best-selling game and multimedia brand, into the AR game. Pokémon Go is a game that lets players navigate through the real world with AR-generated characters, locations, and other elements. With its unique features and technology-breaking entertainment value, many consumers around the world joined the craze. During its launch, merchandise sales, both online and onsite, of Pokémon products increased by 50%. With in-app purchases by players, the game even had a record year in 2019, accounting for an estimated $900 million in revenue. The AR game catapulted the brand's e-commerce presence, making the gaming empire even more famous than it has ever been.
Integrating AR in e-commerce business offers more flexibility to customers consequently maintaining a personalized experience custom-fit to their preference. With the right technology, a solid e-commerce platform, and AR integration, you can take your business to new heights.