Is augmented reality the future of ecommerce?

The value of the augmented reality market is currently estimated at $11bn – a number expected to increase to $60bn by 2023. As this new form of content technology goes from strength to strength, the opportunities it presents to online retail won’t long go ignored. The ability to ‘conjure’ products out of thin air, projecting virtual objects into a non-virtual world, has the potential to open up completely new avenues of communication with the online customer – from product simulations to immersive virtual stores.

In fact, some forward-thinking ecommerce brands are already embracing AR as a way to facilitate the online customer journey. IKEA Place, a smartphone app released in 2017, allows customers to project virtual versions of IKEA products into their homes prior to purchase. Meanwhile, Psychic VR Lab has produced Styly, a fashion equivalent for Microsoft’s Hololens – a model of mixed reality smartglasses retailing from £2,719 – with the lofty aim of creating a completely virtual store experience.

The question is, are these companies onto something? Or are they wasting time and money on an all-too-fresh medium with limited ROI? Here we explore the possible applications – and limitations – of a rapidly developing content technology.

A sensory answer to the conversion conundrum?

It’s long been known that etail has a conversion issue – at least, when compared to bricks-and-mortar vendors. While the typical conversion rate in UK-based fashion stores is anything up to 27%, global ecommerce conversion rates languish at 2-3% on average.

While this discrepancy is, of course, partly due to the number of casual internet browsers who never become buyers, there are other factors at play. Ecommerce sites offer convenience to customers, but they also rely on content and media to convey the positive qualities of a product that in-store shoppers can observe first-hand. As a result, there is a sensory deficit to online shopping that makes the user experience less immediate – and therefore naturally less persuasive.

AR offers etailers a way to counter this problem by bridging that sensory ‘gap’. A recent report by Hidden Creative showed parents two adverts for a children’s toy: one a printed display advert, one an augmented reality experience. While only 45% of those shown the printed display displayed interest in buying the product, 3 in 4 of the AR-tested parents did the same.

In this instance, the immediacy and flexibility of the AR experience helped demonstrate the product’s value more effectively than the 2D print medium. In this sense, AR may offer a solution to the online conversion conundrum, bringing 3D engagement to the digital shopping experience.

A content solution for online customer service?

Another well-established drawback of shopping online is the lack of on-the-ground customer service. While multi-channel retailers with a bricks-and-mortar presence  can leverage in-store employees and experiences to create a positive customer journey, pureplay online vendors have to rely exclusively on virtual content, user interface and web design to achieve the same effect – methods that, while highly effective, can lack flexibility and personalisation.

In this vein, AR offers a new way for etailers to compete. Take, for example, eBay’s new AR-enhanced Android app. This simple AR tool, designed to help sellers decide on which box to ship their products in, saves vendors a trip to the Post Office and helps ensure customer satisfaction on the receiving end of the deal. It streamlines the user experience and provides an interactive customer service that eBay – a pure play business – could not otherwise offer.

What’s more, as well as directly simulating the in-store experience, AR allows online businesses to offer benefits that bricks-and-mortar vendors can’t. Why amble down to your local shop to view a wallpaper when you can actually project it – as well as multiple variations – onto the intended space at home? The service is not only more convenient than its in-store equivalent but potentially  superior.

An early technology with crucial limitations?

However, in spite of the technology’s enormous potential, AR remains extremely expensive. At the more pioneering end of the spectrum, consider the technology demanded of the consumer: for all Styly’s successes in creating a ‘virtual’ clothes store, the sheer cost of the equipment required to access it remains prohibitively high for most; Microsoft’s Hololens still retails at over £3,000. The vast majority of consumers are effectively barred from making use of the service by a lack of disposable income.

At the more accessible end of the spectrum, what about smartphone app development? Unfortunately, this option appears too costly  for all but the largest retailers. Estimates from Think Mobiles put the base cost of developing a mobile app like IKEA Place at over $50,000 – plus another $1200 for every product rendered an AR. For an online store that stocks anything north of 1000 products – and this isn’t even accounting for inventory turnover – that’s an unjustifiably large investment in a mobile-only marketing tool.

Finally, AR is not a quick fix; there remain sensory limitations to the medium. While it excels in presenting the customer with visual and even auditory information, it cannot evoke smell, feel or taste any better than written content. This makes AR development an ineffective  choice for retailers in the food or fashion verticals, for example.

Why do we include the latter? In a 2017 survey on best practice product descriptions , we found that, looking at clothing descriptions specifically, 70% of consumers preferred product descriptions that included details of a garment’s texture, indicating the importance of ‘feel’ to fashion shoppers. So unless AR evolves to communicate tactile sensations, this is one area in which it cannot excel traditional written content.

The takeaway

AR may be an exciting new content technology, but it’s still in its early stages. On the more advanced end, its ROI is limited by the uptake of VR headsets. On the more consumer-friendly, app-based side, it is both expensive to develop and limited to mobile browsers.  

In the end, augmented reality is an expensive – albeit interactive – step up from video. While it may help close the user experience gap between in-store and online browsing, AR will need to be used in conjunction with written and other visual content if it is to actively contribute towards SEO and conversion goals.

Get in touch to find out how Quill can use written, visual and interactive content, seamlessly integrated into your existing site structure, to boost online conversion and business growth.

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