The role of Augmented Reality in e-commerce platforms

By Chetan Sharma

In the past few years, augmented reality (AR) has been creating a buzz among investors, corporates, and the public. Many online and legacy enterprises are making major investments in AR as it is slated to disrupt numerous segments. These include retail, healthcare, logistics, tourism, manufacturing, and more. One industry where AR can provide multiple benefits and use cases is e-commerce.

For instance, a use case of AR in eCommerce can be that it is used to display a product virtually in a chosen environment, such as a room in mansion. Furniture retailers such as IKEA offer AR applications that allow consumers to buy many furniture products online and virtually see how that particular piece of furniture would look in their own homes. Apart from displaying the product itself, AR can also display product information and support captions for customers. In ecommerce scenarios, customers often receive products which are larger and smaller in size. Here, by providing relevant details, brands can prevent loss of profits owing to returns and provide better customer experience.

Even, many stock market broker dealers in India are using AI based applications to reach out to existing and potential customers. They are also using such technologies to understand customers’ investing behaviours, website and mobile app usage patterns, and past questions asked. Companies like Zerodha, Upstox, Groww and 5 Paisa are extensively using AI and ML to help customers make informed investing decisions and get customised services liken those that are offered by e-commerce companies such as, let’s say, Amazon.

Understanding and Differentiating AR from VR

It is necessary to first understand what AR is all about. In a nutshell, AR superimposes a computer-generated photo of the user’s real-world to offer him/her an improved or better version of this reality. This is done by integrating digital information such as sounds, text, and images into the user’s real-time surroundings.

In essence, the AR concept blends the virtual and real world to offer an illusion of perfect integration for users. The virtual assets could be 2D or 3D images, sounds, and videos. Often, AR is delivered via the use of devices such as smartphones or tablet apps. By generating interactive or static virtual assets, the device overlaps them with the visuals captured by the camera of the connected device.

At the outset, one must differentiate between AR and VR (virtual reality) before focusing on the benefits of AR. Although AR and VR are terms often used interchangeably because of some similarities, the two concepts differ.

In VR, users must wear a headset that covers their eyes and don earphones to entirely replace the real world with the virtual realm. In other words, VR isolates users from the real world as much as possible to create a virtual universe. As a result, most VR applications are used in entertainment, particularly gaming.

Conversely, AR integrates the simulated world with the real one. In most cases, a smartphone or tablet screen is deployed by users to achieve this objective by pointing the device camera at the object of interest, generating a live video on the screen of that specific scene. The display then flashes relevant information covering implementations such as navigation information, diagnostic data, or service instructions.

Significantly, AR is also used in entertainment. The most popular example is Pokémon Go, the mobile game where players try to capture virtual creatures as they keep moving about in the real world.

A Few Future-ready Advantages

Purchase transactions via AR represent the future of e-commerce since the innovative technology offers many advantages for online retailers. Some future-ready advantages are outlined below.

Personalising online shopping: Customers can be offered a personalised online shopping experience with AR. For example, it will be possible to ‘try’ on clothes virtually to visualise how they look on them. Customers could also see what sizes would suit them or check the actual product dimensions in their space, apart from other features that would resolve selection problems during online shopping.

Rather than looking at mannequins wearing the same clothes, customers can imagine themselves in these garments to know the ones that would look best on them. Customers can ‘sample’ the products or ‘try out’ the services using AR before making their purchase. The level of customisation would help in increasing online shopping sales.

Increasing customer engagement: As AR is intrinsically interactive, customers can be easily attracted to the brand site. The longer the potential shoppers remain on an e-commerce site, the higher the chances of a purchase being made. Even when customers don’t buy anything during their first visit, vibrant engagement can foster a relationship with the brand and its products. The memorable first impression makes it more likely they could return in the future and then buy something they found interesting when browsing the first time.

Improving conversion rates: Better customer conversion rates would be one of the foremost benefits of AR in e-commerce. If users are given a better picture of the garment they intend to buy, they will be more inclined to convert. When AR is employed in e-commerce, online sellers could provide more engaging and immersive product experiences, leading to better conversion rates. Consumers can preview products via AR, increasing the chances of making the right choice in the first instance.

Reducing return rates: Often, customers return purchased goods if they are faulty or in a damaged condition. Alternatively, shoppers return goods if they are not as per the website description. But by using AR during online transactions, returns can be brought down substantially since buyers will be well-placed to choose the right products as per their needs. With AR, online brands can provide customers with more information about products, which is not possible through static images or even videos. Besides 3D views, products can be presented as they would look within the consumer’s space. This ascertains that the chances of customers feeling short-changed are eliminated.

Considering the above advantages of augmented reality, major online retailers and customers now prefer a sales journey backed by AR. Research reveals that 30% of Gen Z and millennial consumers now seek online shopping experiences incorporating AR and VR technology.¹ Moving forward, this number is expected to rise as the benefits of these digital technologies become apparent.

The author is VP – digital marketing, Simpl

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