Do you need an augmented reality e-commerce strategy now?

augmented-reality-ecomm.jpg

When we conduct our yearly e-commerce futures survey, it’s important we look at just that, the future.  Our entire goal is to help you shape your own view of the future by looking past the next quarter or even the next year.  As operators we need to have one eye on the telescope and make sure we are building for long-term success while still having one eye on the microscope focusing on execution.  By having one eye on the telescope we are looking at least 5 years out to make sure the strategic moves we are making today will pay off in the future.

In this post we are looking at the impact augmented reality will have on e-commerce in the next 5 years.  The major tech titans continue to invest in augmented reality, virtual reality and mixed reality experiences for a wide variety of use cases. Google introduced Project Glass in 2012 to bring augmented reality to the world.  Apple acquired Metaio in 2015 and Tim Cook has been very bullish on the technology saying.

I regard [AR] as a big idea like the smartphone. The smartphone is for everyone. We don’t have to think the iPhone is about a certain demographic, or country or vertical market; it’s for everyone. I think AR is that big. It’s huge. I get excited because of the things that could be done that could improve a lot of lives and be entertaining.
— Tim Cook - Apple CEO

% of Transactions Influenced by AR

What does this mean for e-commerce, though? Will AR be a driving force in e-commerce? According to our 2022 Futures survey, not really.

  • Nearly half of respondents (45%) think augmented reality will influence less than 25% of transactions.
  • Only 5% of survey takers thought AR would account for more than 3/4ths of sales.

To gain some additional perspective, I reached out to Jean-François Chianetta, Co-Founder and CEO at Augment, a leading SaaS-based provider of augmented reality solutions for his perspective.

"First of all, augmented reality will mainly impact the online sales of physical goods, it won't touch right away categories like cultural goods, insurance or travel. So I agree with the responses that AR won't touch every transaction. But for products like furniture, appliances or electronics, augmented reality will become the only interface through which you buy, you won't need to see pictures or video of the product, you'll test it right away in the real world and compare several products together as if you were in the store. At that point, the impact of AR will be outsized and will become even more important when augmented reality glasses become mainstream."

However, some in the retail market are not as optimistic. Nathan Decker the Director of e-Commerce for evo.com, an online outdoors outfitter, doesn’t see AR taking the lion’s share of purchases in 5 five years.

"I think it will be a long time – if ever - before AR is the “only interface” through which we buy physical goods. There are a few reasons for this.

The first is adoption. If you look at the rate technology has been adopted over the last hundred years, things that are ubiquitous like the telephone or microwave take 50 years to become common in every home. Over the last few decades the curve has shortened significantly with cell phones and the internet gaining widespread adoption in 20-25 years but VR and AR are just getting started. The soonest we will have widespread adoption of the technology, at least VR where you need a separate device, is 2030 or 2035...

The second reason is because there are so many other effective ways to bridge the gap between physical and digital. The sheer variety and ease of buying digitally makes AR and VR less necessary today than it might have been even 5 or 10 years ago. A multitude of interfaces compete to make the digital shopping experience seamless, easy, low commit. Ordering something by voice or setting up auto-refill subscription services or “dash” buttons reduce the need to even see an item at all before buying, let alone see it in an elevated way."

Jeff McRitchie, VP of Marketing, of MyBinding.com, a paper products retailer, had this to offer:

"Currently I am seeing a few instances where AR is making a difference and starting to enhance the shopping experience.  Specifically in virtual try on experiences, virtual walk throughs and in design applications...I can see these continuing to increase over time especially as the friction is reduced. That being said AR doesn’t really solve many of the primary areas of resistance to digital dominance.  People still like to touch and feel and experience products first hand and current AR / VR technology is a long way from solving that problem.

For businesses that experience a high degree of analog resistance where people struggle to transact digitally I suspect that technology will continue to improve and companies will find ways to reduce the friction to transact online.  This will drive AR/VR in the near term and I believe in the next five years sales that are impacted by these technologies will primarily fall into this category. Longer term it is possible that digital and analog worlds will continue to merge and become seamless.  However, that appears to be much further out and may or may not ever become fully realized

Unless you are in an industry facing a great deal of friction with analog buyers it is most likely smart to be on the trailing edge of this wave letting big players spend massive amounts of money to drive adoption."

Nathan echoed a similar sentiment cautioning smaller retailers to be wary of early adoption of unnecessary tech and software:

"Totally agree. The path to a viable economical commerce-oriented application is likely to have casualties along the way. The tech will come to us before we need to build anything."

Personally, my feelings on AR echo both Nathan and Jeff’s opinion in that it’s really only valuable to very specific industry segments where there is a lot of friction around the consumer journey, remodeling your kitchen for example.  Lower AOV transactions like clothing where virtual, augmented or mixed reality experiences theoretically could prove valuable on a majority of online or digitally-influences transactions are still well over 5 years out.

Ten years from now we'll see broader consumer adoption for these technologies based on the evolution of in-home entertainment and other real world applications like translators and teaching tools.  As the overall experience evolves and become more commonplace the impact on e-commerce will follow.

It’s apparent with this technology in its infancy we'll need see to adoption increase by leaps and bounds to warrant much investment as operators at this time. It's possible that some early adopters leveraging this technology can create brand new experiences that can support entirely new businesses and business models, but there are more interesting trends that B2C and D2C e-commerce companies should focus on.  For a full break down of the attitudes toward AR/VR and other future emerging tech, click to follow the link to our 2022 Future of E-Commerce Survey.


About the Author

Shilo Jones StatBid Co-Founder.png

Shilo co-founded StatBid with Roy Steves.  Shilo has spent nearly two decades building e-commerce businesses starting with evo.com where he served as the President as well as holding leadership positions at DestinationLighting.com and GolfDiscount.com.

Shilo Jones, Co-Founder, StatBid