Modern Retail and Tech: The Normalisation of AR

April Davis By April Davis | 14 Mar 2019

Augmented Reality (AR) isn’t just a distant, futuristic idea like time travel devices and regular space travel, it’s modern tech that’s here now, and is driving the future of cross-channel shopping experiences.

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Long thought of as the domain of science fiction authors and Hollywood producers, AR has shifted away from high-tech military and NASA equipment, towards everyday experiences that are changing the way consumers shop.

While traditional showrooms, catalogues, and an online presence are all valuable sales channels that help to entice customers to make a purchase, when consumers are looking for a brand to pledge their loyalty to, they want more than a standard, everyday purchase journey. This is where AR that’s built to meet the needs of both retailers and consumers comes into play.

Global technology companies and retail innovators like Alibaba have re-defined what AR can be used for, with the likes of Apple, Shopify and Google all jumping on the bandwagon, looking for the latest and greatest ways to wow shoppers with their ingenuity. Google has been taking the technology to the next level with the development of interactive gaming technology, while Shopify is bringing its use of AR a little closer to home, with the introduction of its mobile shopping feature, AR Quick Look, which brings products to life in 3D models, allowing shoppers to view items from all angles in their own environment.

But, these companies have barely scratched the surface, with Jordan and Jason Yim from INHAABIT, a Melbourne-based business specialising in digital experiences, saying AR will help “entice customers to make a purchase”, bridging the gap between online and in-store shopping experiences.

“Augmented Reality is a breakthrough visual technology for retailers”, explains Jordan Yim, INHAABIT’s CEO. “We’ve reached the point where all you need is your mobile phone and you can realistically decorate your room with a collection of furniture, try art on your wall and virtually see different hats on your head.

“When we first saw augmented reality, we knew it was the future of retail”, he continues. “It’s a natural evolution of the buyer’s journey. If you can realistically see a product in the place where it will actually be, with accurate sizing, colours and materials, [shoppers] can be more confident in their buying decisions.”

For Caitlyn McGuinness, the director of sales and marketing at First Move, AR is like the website discussion of the late 90s and early 2000s. “It was the early adopters that really pushed the tech and consumer expectations forward”, she says. “AR is very much like that, once it becomes ‘consumer expectation’ it will be a required piece of the shopping experience. The earlier a retailer can get on board with the tech, the more time they will have to learn from it and gather the online and offline data, giving them an edge on their competitor.”

AR has been talked about in the online retail industry for some time, with a number of businesses adopting the technology for their online and offline channels in the last five years. Sportsgirl, for instance, used its in-store display windows as a cross-channel touch point back in 2014. The Australian fashion retailer launched what it referred to as a ‘next-generation shopping innovation’, or, its combination of ‘digital windows’, a mobile app and a quarterly magazine.

Sportsgirl

An example of Sportsgirl’s new digital windows.

The integrated technology utilised by Sportsgirl at the time allowed the brand to give consumers life-like interactions with products, free music downloads, shoppable pages and beauty tutorials, all within its mobile app that could be used in tandem with its digital windows in stores across the country. However, the digital windows were only on display for four weeks, before the retailer moved onto its next in-store promotion.

Over time, retailers have started making more investments in AR that have been designed for long-term scalability. Online shoppers have been asking for online experiences that replicate the beneficial aspects of bricks-and-mortar retailing for some time now. An example of this is giving consumers the opportunity to see products up-close, touch them, and get a real feel for the style and quality of the items. Sportsgirl is far from the only early adopter of AR tech in the retail industry, with hundreds of brands in Australia and across the world getting more inventive with the brand engagement strategies.

Recently, brands like IKEA and Walmart have taken this concept and spearheaded the implementation of technology that turns e-commerce into a more experiential process. IKEA, for instance, launched an augmented reality app in late 2017, which was designed to help shoppers with their purchasing decisions.

“Ikea Place makes it easier to make buying decisions in your own place, to get inspired and try many different products, styles and colours in real-life settings with a swipe of your finger. Augmented reality (AR) and virtual reality will be a total game changer for retail in the same way as the internet. Only this time, much faster. ARKit gives us the opportunity to help shape the development of AR as an accessible tool for real-life decision making,” IKEA’s leader of digital transformation, Michael Valdsgaard, said at the time.

The IKEA app automatically scales products based on room dimensions with 98 percent accuracy and has become an integral marketing channel for the brand as it launches new product ranges.

Another example of innovative AR solutions is Walmart’s interactive online toy store that’s designed to engage kids and encourage them to create product wish lists. In November 2018, to capitalise on the fall of Toys ‘R’ Us in the United States, Walmart introduced the ‘Walmart Toy Lab’, which gave children the opportunity to play with 20 of the business’s top-rated toys from their computers or tablets.

Walmart

“Like stepping into an interactive unboxing video, The Walmart Toy Lab lets kids take on the role of an official Walmart Toy Tester,” the company said in a post on its blog. “Kids can virtually play with 20 of Walmart’s top holiday toys in a whimsical, colourful space and share their favourites on a digital wish list.”

Using the “Funtroller” kids can navigate through curated editorial content to take a closer look at their favourite products, play with their main features and watch other kids play with them as well. The company has also incorporated a “Don’t Push” button, which causes the digital playground’s host, Burt, to do something funky, like have a dance off or turn invisible.

Examples such as these have been popping up more and more frequently as solution providers update functionalities, modernise their capabilities, and start coming up with more creative ways to help retailers with their ultimate goal of attracting more customers and encouraging repeat purchases. According to Jordan Yim, AR is useful because it supercedes the benefits of a retail showroom, with features that allow consumers to move beyond the simple ‘touch’ and ‘feel’ sensations of purchasing products, and into the virtual visualisation of goods.

“While there are many cases for AR, a great example is the process of buying a modular sofa. There’s literally no way you can see all the options in a showroom, but, with AR, we allow you to build any configuration and then realistically see it in your home with the tap of a button,” he says. “We’ve also rolled out cross-platform capabilities, so you can be on iOS or Android devices, as well as desktops, and still be able to engage with products in a more interactive way than viewing static product photos.”

But, what are the thought processes and steps involved in developing an interactive AR shopping app?

Case Study: First Move, INHAABIT and Cosh Living

Cosh Living is a high-end retailer selling both indoor and outdoor furniture ranges from premium furniture brands. The company has stores in Melbourne, Brisbane and Perth and has recently put a larger emphasis on its e-commerce market to capitalise on the growing popularity of online furniture shopping.

Before coming up with a new digital strategy, Cosh Living enlisted the services of First Move to establish what its options were, and how it could realistically leverage its digital presence to increase brand awareness, engagement, and conversions.

“The question that we were presented with by Cosh was ‘Is there an online market for luxury furniture?’ Our answer was, ‘Well yeah, why wouldn’t there be? We can only try’,” McGuiness says. “After further brainstorming, the major point that stuck out to us was how to bridge the gap between the great in-store

Cosh Living’s AR app.

experience and the online experience. How do we send the customer home from the showroom with the inspiration and turn that into a conversion? This is where the AR thought pattern begins.”

For Colin Kupke, the director of Cosh Living, this thought pattern made perfect sense. “It is often difficult for customers to imagine furniture they are considering buying in their own home, and our AR app now bridges that gap,” he says.

With these points in mind, the two businesses set out to find a way to allow customers to stand in their own outdoor living spaces and select multiple items they’re interested in and place those items directly in their space to see how they look. The whole project revolved around one ultimate goal – giving consumers the confidence to make a high-ticket purchase online.

“Our AR app allows customers to view many furniture options in their own home by utilising their iPhone or iPad,” Kupke says. “We are also working on the ability of customers to take photos of their room or space at home and bring these into our showrooms for our sales consultants to load into AR on our screens, and then help them make suitable furniture selections,” he continues.

INHAABIT helped Cosh Living bring these desired goals to life by ensuring a seamless integration of Cosh Living’s sales and marketing strategies with its AR app.

“The solution allows customers to smoothly transition from a retailer’s website into an AR experience, or start in the AR app and add products into a website shopping app,” Jordan Yim says.

“We focus entirely on AR retail solutions, so most important for our customers, like Cosh Living, is that the technology provides real business benefits,” he explains.

Kupke is hopeful that this technology will help Cosh Living attract more customers to both the business’s online and bricks-and-mortar stores, while also easing them through the purchase process, making them more confident with their product selections. “Hopefully it will help us gain more customers by eliminating some of the doubts the customer might have been hesitant about before ordering.”

While many industry spectators are confident that retailers will become big investors of AR tech over the next few years, Kupke does point out that Cosh Living’s app wouldn’t suit every retailer’s business model.

“It’s hard to know whether other retailers will see this [app] as a benefit for their business or not,” he ponders. “It will depend to a certain extent on how stable a business’s product range is, how accurate the AR images that are utilised are, and how easy the AR app is to use.”

However, he is confident that Cosh Living’s specific app, which was developed in collaboration with First Digital and INHAABIT, will have a strong ROI for the business, especially as the company continues to improve the features of its new app.

“From our perspective, we will be working with our providers to ensure that the accuracy of our images are as good as they can be, to represent each product featured. We will also be ensuring our AR app is useable on Android devices as soon as possible,” he says.

Looking outside of the AR app development process, First Move and Cosh Living also felt that for the app to become a valuable sales funnel, and a valuable part of a consumer’s purchase journey, the company’s website would also have to be updated. With this in mind, the two businesses set out to create a more seamless customer experience across multiple touchpoints.

“The goal was not to turn the online store into a huge revenue driver, but rather, a portal for the customer to feel more confident and educated before making contact or taking the next in-store step,” McGuinness says.

As such, First Move worked with Cosh Living to introduce price points to its online store, while also establishing auto-fill forms and the ability to build custom made quotes.

“Previously, Cosh Living did not display pricing [on its website], this drove the customer to call or email the stores directly,” McGuinness says. “We felt this was a barrier to purchase, as we wanted the customer to be able to use on-site pricing to make plans, build quotes and be more informed when they start to contact the store.

“Each store also now has its own contact form that auto fills out product details once sent to the stores, so they know exactly which product the enquiry is coming from. We also have a build a quote feature that acts similar to a wishlist feature. This quote form allows the user to add items and send it to the customer’s closest store, so they can then be contacted to receive further advice,” she says.

According to McGuinness, these online improvements, while minor, have already proven fruitful.

“Since launch, we have seen a considerable increase in enquiry and quote form submissions.”

“AR represents an exciting sales and marketing channel for retailers to engage with customers,” explains Jason Yim. “We’re leveraging today’s technology to move the retail industry forward, allowing customers to make better decisions.

“There will always be companies who are early adopters and others who prefer to wait, but just like developing your website or e-commerce strategy, it can be highly beneficial for companies to leap ahead of their competitors to gain business insight and market share, ahead of those who start later on,” he continues.

If you’re still not convinced, according to IDC (2017), industry projections indicate that spending on AR/VR products will expand from US$11.4 billion to US$215 billion by 2021. As far as Jason Yim is concerned, “it’s no coincidence that the world’s most valuable technology company, Apple, has been cleverly increasing its AR-related hardware in every mobile and tablet device of the last couple of years.”

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