Augmented Reality: Good Times Ahead for Ecommerce

Technology is changing, and with it, retail + ecommerce.

What does it mean when a woman posts selflies from a changing room and solicits her shopping decisions from her Facebook friends?

Or when haptography is helping you get a feel of a cute dress on the etsy store, without actually touching it?

It means that the “online” and “offline” worlds are rapidly bleeding into each other.

What we’ve always boxed neatly as “online” is fast becoming an integral part of our lives, with no meaningful distinction from “real life”.

Augmented reality (AR) technologies are a huge part of this narrowing gap. The Retail Prophet details the ways in which AR technologies are changing the game for online retailers, and opening up many more possibilities than the online catalog.

Ecommerce is closing the tactile gap with AR tech.

Yes, online shopping is convenient and doesn’t have closing hours, but until now you couldn’t experience a product’s color or texture. For that reason you used to go to the store to pick expensive things– you don’t want to risk so you really get to know your stuff as much as possible before making your purchase.

For that reason, also, you would buy your shoes and your underwear in a retail store – because the feel of these items really cannot be understated.

Underwear greatness!

But AR technologies like haptography and Occulus Rift are closing that tactile gap for consumers – and they’re becoming increasingly affordable, too. These technologies will probably become more commonplace, and online shopping become even more ‘natural’ than it already is. Shoppers can now get a most thorough sensory experience, round the clock, whatever the weather, without leaving their desks or their children, without braving crowds and traffic.

The numbers show that shoppers have indeed been making the move to the online commercial platform – AR technologies will only give them more reason to. Two key findings illustrate how shoppers well-acquainted with online retail favor it:

  1. Increase in sales of luxury goods. Online sales in luxury goods are already growing twice as fast as the rest of the market, because of the smartphone penetration. The majority of luxury customers own a smartphone and/or a tablet. This is noteworthy because luxury goods are pricey, and customers would strongly prefer to see and touch them first. Already the convenience of online shopping is making converts out of luxury customers – imagine what more difference AR technologies would make.
  2. International ecommerce growth. Ecommerce is booming in countries (specifically, China and India) with a burgeoning middle class – or, countries in which more and more people are gaining access to capital, and the mobile to computer experience. These are the same people most willing and able to embrace new technologies.
ecommerce, we got this.

AR technologies mean an explosion of opportunities for marketers.

  • New technologies will put advertising on steroids. Brands will have so many more tools to make advertising campaigns immersive and exciting for consumers. Already, many brands are using AR technologies to promote new products, and AR in marketing across mobile applications will probably generate 1.4b downloads by 2015.
  • Brands that have used AR well, use AR in an interactive way to create maximally rewarding experiences for consumers. More recently, Topshop gave passersby of its flagship store in Oxford Circus a VIP’s view of the Autumn/Winter 2014 show for its Unique range. Topshop’s use of Oculus Rift didn’t actually help participants in its campaign get closer to their products, but it gave them the experience of being at the epicenter of fashion – which is precisely what Topshop wants to stand for.

Is it all doom and gloom for brick-and-mortar retailers?

Well, yes and no. It would be more accurate to think of the decline of retail’s dominance in commerce as a streamlining of its purpose and function.

To understand this, we can reflect on how new technologies had affected things in the past. They did (largely) displace many existing things, but only because they could do it better. So the old things remained useful, but only for situations they were most suited or efficient in, anyway.

Take horses for example. They used to be a primary means of transportation, until motor cars came onto the scene and did it better. Today horses are owned as luxury pets, leisure-riding, professional sport – I’d even say the status of horses has improved, because they’re no longer treated like dispensable vehicles or labor units – but as workers and partners whose health we are invested in protecting.

So, similarly, brick-and-mortar retail won’t just disappear. Rather, it’ll specialize and become a better shopping environment for shoppers who still go there. Buying clothes at stores will become more of a luxury experience. And it’ll still benefit from all the marketing and advertising innovations indigital.

Put another way: new technologies give ecommerce more teeth, and this forces brick-and-mortar retail to focus on its last remaining competitive advantages.

It’ll become less frustrating – fewer crowded malls and changing rooms. People might go there for the social and physical experience of being at an outlet mall – retail shopping is still popular among US teens.

It’s like polaroids, or vinyl records – now more popular among connoisseurs, hipsters, or people who, precisely because they are well-versed in new technologies in these fields, are fond of vintage gadgets.

Hipster dinosaur is unhappy at technological discontinuity.

Retail is dead, long live retail.

Like horses, retail doesn’t get phased out by new technologies, it just becomes repurposed to take a more virtual appearance, and its offline form retains its value as a niche experience.

The brands that survive will be those that embrace technological changes, get creative with their possibilities as advertising tools, and adapt to an increasingly virtual market.

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