Augmented Reality (AR) has been around for a while, but has yet to break into the mainstream for ecommerce retailers. Brands such as Ikea (pictured) and Made.com have been early pioneers, offering customers the ability to see how their products look “in real life” before they buy. However, the high cost of developing bespoke AR solutions has limited their use to large retailers.
Now, there are signs that this is changing. With most retailers well on the way to digital transformation, the lowered cost of advanced technology leads to a digital acceleration. Some ecommerce retailers are adopting AI to drive growth; others are turning to AR.
AR is cheaper than ever before, but a key question remains: is it worth it?
In this article, we’ll look at some novel uses of AR, explain how you can use it, and help you decide whether it is a good investment for your business.
Ecommerce brands are banking on AR
There is a major crisis gripping the ecommerce community, but it’s one that hasn’t received a lot of attention: the cost of returns. It seems that tech-savvy, mobile-first customers know how to get the best out of ecommerce retailers, sometimes at their expense. With customers buying and returning an average of three items per month, the cost of returns is skyrocketing. In the UK, returns are estimated to cost businesses in excess of £60bn each year, putting a huge strain on retailers of all sizes.
It’s not hard to see that many of the AR apps that have risen to prominence in the last year are an attempt to directly address this problem. DFS, a furniture store, launched an app that allows customers to see what new furniture will look like in their lounge. Argos is using a similar system. And then there is John Lewis, which uses AR apps for both furniture and beauty, and is actively looking at “more complex” uses of the same technology.
All of these companies have clearly seen the long-term value of AR – these apps are not mere PR stunts, but have received significant investment. In a market where 42% of shoppers think that AR would help them make a better buying decision, it’s not hard to see why. However, this kind of app is not the only use of AR for ecommerce businesses.
How to use AR In your business
For ecommerce businesses, there are essentially three ways to use AR.
The first is the kind of app that DFS, Argos, and John Lewis use, which essentially allows customers to “try before they buy.” This type of app can be implemented at various levels of complexity. Nike, for instance, has a try-on shoe app that measures the size, shape, and volume of your feet, and then recommends the correct size. Brands like Acustom Apparel are taking this idea further, with an app that can measure your body size.
A second way to use AR in ecommerce is to design AR manuals for your products. Since 95% of customers read reviews before buying a product, and 72% of shoppers don’t make a purchase until they have read reviews, giving them a guided tour of your products via AR can help undecided customers make the decision to purchase.
Finally, there are apps that leverage AR purely in pursuit of digital marketing. It tends to be larger brands (such as Taco Bell) who use AR in this way, because smaller ecommerce stores simply don’t have the resources to develop an AR app merely for an ad campaign.
Is AR worth It?
Despite AR apps like those above generating much excitement, for most ecommerce brands the decision to use AR will be a complex one.
There are several challenges to deploying any kind of AR solution. First, it’s unlikely that your ecommerce business has the expertise to develop an AR app in-house. This means you’ll have to hire a developer, and they don’t come cheap. Costs for AR apps can run from $5,000–$10,000 (£3,800-£7,600) for a simple demo app developed in 160 working hours to $300,000+ (£230,000+) for a feature-rich, custom-built app that takes nine months and longer to bring to market.
Then there are some associated challenges. Many customers are increasingly worried about the threat of identity theft, and using their personal information in an AR app means you will have to assure them that you take their privacy seriously. Introducing an AR app is a great way to increase marketing traction among millennials, but unfortunately this is the group who are most concerned about how much data they are sharing.
Ultimately, whether AR apps are worth it for your brand will depend on the economics of your business. If – as seems likely with DFS, Ikea, and John Lewis – you are suffering a monetary hit from the cost of returns, investing in a tried-and-tested solution such as a furniture preview app is a great idea. But unless you’ve got thousands of dollars to spend on advertising, developing an AR app just for the headlines is unlikely to be worth it.
That’s not to say, of course, that this situation won’t change. The cost of app development has dropped significantly in just the last few years, and we might soon see off-the-shelf AR solutions that will be cost-effective for the majority of ecommerce retailers. In fact, the recent Covid-19 pandemic may very well help with this process – as we’ve recently pointed out, technology is key for struggling businesses.
In short, the AR revolution is here to stay, but it may be a few years yet before smaller ecommerce retailers are able to join it.
Brian Skewes is a technologist into deconstruction. Over two decades of self-employment, he has accumulated a wealth of inadvertent real-world lessons related to building, running, and preserving a small company