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Welcome to Near Future. In this weekly feature, The Current spotlights innovations powering the next wave of commerce.
For brands and retailers, adding new technology features to a shopping experience has long been a way to generate interest and excitement. Tech makes new capabilities possible, allowing all to envision a future that appears to have already arrived.
Yet it’s also important to ground the rollout of an innovative new tool in its utility for a business. How does it provide shoppers with value, and in turn help to solve problems inside the business? With more technology available, it's increasingly important that these questions are analyzed and answered.
So it was with interest that we read the results of a recent survey on augmented reality from Snap Inc. and Publicis Media. AR, which involves overlaying a digital image onto the display of a real-world setting through a mobile camera, is becoming more widely used in ecommerce. Many brands and retailers are rolling out AR shopping features like virtual try-ons and 360 product demos, or considering doing so. So research on how shoppers use and assess the technology can be key to understanding whether a virtual try-on is the right fit.
The data was gathered by market research consultancy Alter Agents across four markets, with a quantitative survey of 4,028 shoppers aged 13 to 49 who have used AR for shopping, and 37 mobile ethnographic interviews and daily diaries from consumers in these four markets.
Here are a few of the findings:
- 80% of shoppers feel more confident in their purchase as a result of using augmented reality. Being able to interact with a product helps shoppers to get a better sense of a product.
- Two-thirds of shoppers are less likely to return a product after using augmented reality. Returns often come as a result of a mismatch between expectations of the product and what actually arrives. Augmented reality helps to bridge that gap.
- High repeat purchase likelihood: Across key consumer categories, between 60-70% of shoppers said they would be likely to purchase in the future after using an AR experience. Making this feature available can help to keep customers coming back.
The research comes as momentum for augmented reality is building, driven in part by Snap. After exploring brand partnerships that helped to prove out the utility, the camera-based social platform is bolstering its capabilities in this area with a home for AR try-on for users, as well as tools for brands to more easily add products for shoppers to browse in this mode. The research found that 37% of shoppers who discover AR experiences do so on Snapchat, second only to store websites.
Ecommerce platforms are also moving to add augmented reality features. In June, Amazon made a fresh addition to its AR shopping tools with a Virtual Try-On for Shoes features. It immediately offered access to well-known brands such as New Balance, adidas, Reebok and Puma.
This week, Walmart announced a pair of new augmented reality features for its shopping app, stating that it believes “the closest store to our customers is in their pocket.”
One feature, rolling out in July for iOS with Android and web to follow, allows customers to view a visualization of what furniture and home décor items will look like in their own spaces. The Walmart app will now include a ‘View in your space” banner. Once in this area, shoppers will be able to hold up their phone to view a likeness of up to 300 items, toggle item dimensions for fit and then snap a picture for later. It also includes haptic feedback, which allows customers to feel vibrations as they move 3D models, and prevents them from moving beyond the walls of a single room.
(Photo via Walmart)
AR won’t only be an ecommerce function at Walmart. The company said it is developing a new in-store augmented reality feature to view product information. Shoppers and associates will be able to point a phone camera at store shelves with the Walmart app, and it will in turn filter the product assortment based on personal preference. This can be used to denote whether an item has a particular specification, such as gluten free. It could also help to provide info on whether a coupon is available for a product.
Walmart’s extension of the technology to the in-store experience underscores how the 3D technology will continue to develop. New use cases will emerge.
That’s also on view in a new release from IKEA this week. The Swedish furniture company launched a new mixed reality experience that combines AI, computer vision and design tools with the visualization that is familiar in AR. The technology was developed by AI specialists in Silicon Valley, and Geomagical Labs, which IKEA acquired in 2020.
IKEA Kreativ. (Courtesy photo)
IKEA Kreativ offers tools that allow shoppers to create a 3D replica of their own space by taking a series of photographs, which are automatically processed into one 360 image. In turn, this image can be edited by erasing their own furniture from the image, and replacing it with images of IKEA products. So, effectively, it allows users to design their own space. Then they can save for later or share with friends. Users can also add the products to their cart, creating a path from visualizing to buying.
It’s a reminder that augmented reality is a step to help visualize and inspire. The most widespread sign of adoption may be when it becomes such a blended part of the ecommerce experience that users don’t even think about the words augmented reality when they are using these features.
Trending in Shopper Experience
Labor disputes on the West Coast could cause further disruption heading into peak season.
When the first half of 2023 is complete, imports are expected to dip 22% below last year.
That’s according to new data from the Global Port Tracker, which is compiled monthly by the National Retail Federation and Hackett Associates.
The decline has been building over the entire year, as imports dipped in the winter. With the spring, volume started to rebound. In April, the major ports handled 1.78 million Twenty-Foot Equivalent Units. That was an increase of 9.6% from March. Still it was a decline of 21.3% year over year – reflecting the record cargo hauled in over the spike in consumer demand of 2021 and the inventory glut 2022.
In 2023, consumer spending is remaining resilient with in a strong job market, despite the collision of inflation and interest rates. The economy remains different from pre-pandemic days, but shipping volumes are beginning to once again resemble the time before COVID-19.
“Economists and shipping lines increasingly wonder why the decline in container import demand is so much at odds with continuous growth in consumer demand,” said Hackett Associates Founder Ben Hackett, in a statement. “Import container shipments have returned the pre-pandemic levels seen in 2019 and appear likely to stay there for a while.”
Retailers and logistics professionals alike are looking to the second half of the year for a potential upswing. Peak shipping season occurs in the summer, which is in preparation for peak shopping season over the holidays.
Yet disruption could occur on the West Coast if labor issues can’t be settled. This week, ports from Los Angeles to Seattle reported closures and slowdowns as ongoing union disputes boil over, CNBC reported. NRF called on the Biden administration to intervene.
“Cargo volume is lower than last year but retailers are entering the busiest shipping season of the year bringing in holiday merchandise. The last thing retailers and other shippers need is ongoing disruption at the ports,” aid NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “If labor and management can’t reach agreement and operate smoothly and efficiently, retailers will have no choice but to continue to take their cargo to East Coast and Gulf Coast gateways. We continue to urge the administration to step in and help the parties reach an agreement and end the disruptions so operations can return to normal. We’ve had enough unavoidable supply chain issues the past two years. This is not the time for one that can be avoided.”