Retail

Using Augmented Reality To Help Merchants Reduce Returns

Retailing, like everything else in the business world, is falling into pre- and post-pandemic reference points. Many retail technologies have benefitted from that schism, among them augmented reality. Before the crisis hit, there were any number of ways to see what a sofa would look like in a living room, for example. Post-pandemic, showrooms are out of the question, so the options are limited to technology. Enter augmented reality (AR).

In layman’s terms, according to tech site AVR Spot, AR adds “digital elements onto a smartphone camera, creating an illusion that holographic content is a part of the physical world around you. In contrast with virtual reality (VR), you are not immersed in the whole artificial environment. AR alters the surroundings a bit by adding 3D objects, sounds, videos and graphics to it.”

So it’s fairly easy to see whether that sofa would be a good fit. For many companies, Utah-based Seek among them, AR is a growing retail technology that has been thrust into the spotlight due to the nonessential retail shutdown.

Furniture is among the most popular use cases. Before the crisis, companies that sold furniture had to struggle with low margins and growing but overwhelming volumes. Now, companies that have been selling furniture online, such as Wayfair and Overstock, are doing well as the crisis has accelerated the shift online. One of Seek’s customers, Raymour and Flanigan, had a business split of 95 percent to 5 percent in favor of brick-and-mortar retail before the pandemic. Now, the ratio is exactly opposite.

Although AR works best at this point for large items that need a different lens for context, Seek Co-Founder and CEO Jon Cheney believes more use cases will be forthcoming.

“The potential diversity of use cases is interesting, particularly now that we’re talking about reopening the economy,” he said. “Whatever happens will be consumer-led. I don’t know how comfortable consumers will be walking into any store to buy anything for a while. And having the ability to bring the commerce experience inside their homes, where they can safely experience a product before they buy it – that’s the most relevant use case right now.”

Which is not to say there’s no room for improvement. Accuracy in AR technology is critical. For example, if a consumer looks at a table online and then tries to place it within their own living space without the proper measurements, that can lead to the wrong buying decisions. Cheney says Google and Apple have provided incredible devices for measuring rooms, and eCommerce providers must ensure that good data accompanies that technology. He is excited about improvements in product sensors and phone graphics, and hopes they will extend to AR technology and help to boost consumer adoption.

Cheney believes the market conditions spawned by the coronavirus will lead to a reckoning for nonessential brick-and-mortar retail.

“There’s going to be this wave of consumers going out just because they can in the beginning. But then people are going to reconsider the necessity of going out,” he predicted. “People are going to ask themselves, ‘Can I buy this from home? Do I need to go out right now?’ Look at working from home. There are many different reasons that people are going to decide to do more business at home, but I think a lot of it comes down to basic changes. Look at Grubhub and other remote technologies that bring food to the consumer instead of the consumer going out for food. That’s an example of something that will stick.”

The pandemic and the concurrent shift to digital has made Seek busier than ever. Cheney believes it’s because clients are understanding that the best way to see an item online is through AR. For example, he has seen interest from a massage chair company as well as other places based on physical retail. He says the companies aren’t asking about whether to add AR to their eCommerce site, but how soon they can do so. While most of the companies sell large-scale items, he would like to see more categories adopt AR. Some of Seek’s clients are in the footwear category, but no one has yet come up with an application that will allow people to try on shoes without physically holding them. Cheney believes the “holy grail” is the apparel category.

“The technology is not quite there yet,” he said. “But it would be great to order clothes online without having to buy a bunch of them to see if they fit and then have to return them. Imagine if you could virtually put on a new pair of jeans and see how they fit. You would need a lot of good data points to do that. The phones would need to have extremely accurate measurements available, and the clothing manufacturers would have to provide really accurate data. A Nike medium isn’t the same as a Hollister medium, for example. We’re not there yet, but we will get there.”

Cheney is also confident that AR can help to cut back on eCommerce return issues. As eCommerce has exploded with the pandemic, returns have soared right along with it. He believes augmented reality can reduce returns by about 25 percent.

The most important thing going forward, according to Cheney, is ease of integration. “We have made it extremely easy for brands to integrate, but just as important on the other side of the equation is to make sure it’s easy for the user,” he said. “If it’s too hard for the user, if it’s too many steps, if it doesn’t work or if it breaks, the user is going to give up and go somewhere else. But if it’s easy, you just click it and it works. That’s what helps technology really grow fast.”

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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