2021 is the year AR commerce becomes an Actual Reality

Augmented Reality finds one killer app in driving business revenue through virtual shopping experiences

2020 forever changed the trajectory of digital transformation in every business, in every industry. As the global pandemic endured, customers were encouraged to embrace digital-first shopping behaviors. Even with the initial distribution of the Pfizer and Moderna vaccines to lead the fight against COVID-19, consumers were subjected to ongoing waves of increasingly alarming infection rates, lockdowns, and closures of public spaces. 

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As a result, consumers doubled-down on prioritizing their health and safety, embracing digital-first shopping when possible. With every consumer click, tap, and swipe, businesses were forced to advance years of digital transformation to adapt. Innovators though, must look beyond digitization, basic ecommerce, and ordinary digital engagement, to differentiate, and create sought after value. Augmented reality, and mixed reality overall, represents a unique accelerant to deliver new experiences, awaken the senses, online and IRL (in real life), and enhance engagement throughout the customer's journey.

The truth is, until the vaccine reaches the masses, most customers will continue to prioritize shopping from the comfort (and safety) of their home. Psychologists estimate that it takes, on average, 66 days to make new routines automatic. This is what makes digital-first behaviors so critical now. The reality is that customer behaviors changed throughout 2020 and they will most likely never shop in the same way again. Their expectations, values, and norms have evolved during the pandemic. As a result, digital engagement became the norm. Brands that don't compete through the delivery of unique digital (and physical) experiences will miss a rare window to leapfrog the status quo. This is where augmented reality and experience architecture come into play.

Augmented reality represents an immediate opportunity to enrich shopping experiences. 

AR Augments and Enhances the Digital Customer Journey

For years, AR has demonstrated so much promise and yet so few tangible applications. Was AR just another shiny object without a killer app? Thanks to years of acceleration of ecommerce in a matter of months, AR is about to get its time in the spotlight. 

With AR, brands have a novel opportunity to deliver value-added experiences, beyond shiny object syndrome. Through augmented reality, brands and retailers can unlock a new dimension to digital and physical shopping where products and experiences are brought to life. These experiences can come to life at home, in store, or anywhere. All it takes is imagination and innovation.

The business case is already present. A recent study identified that consumers are more than ready for thoughtful AR-powered experiences. The study found that 63% of consumers believe AR will transform their shopping experience and 61% indicated that they would prefer to make purchases on sites that offer AR technology. More so, 70% of consumers reported that they would be more loyal to brands incorporating AR as part of their shopping experience. 

At the same time, customers don't feel retailers are keeping up with their expectations. The study also learned that 53% of customers feel that retailers are failing to take full advantage of AR.

AR Opens new Doors for Customer Engagement

Today, nearly all shoppers prefer to do most, if not all of their research independently. This is as true of B2B buyers as it is for B2C customers. In fact, a recent survey found that half of B2B buyers fully define their needs before even approaching a sales rep to discuss their needs.  

The true magic of AR is that it gives customers the ability to look, not only at how products appear in the wild, but also how they might complement spaces and applications. More so, AR can also add new dimensionality to customer experiences, bringing creative or useful interactions and transactions into previously static touchpoints. It's digital discovery and conversion reimagined. Look, size, shape, style, interaction, basically every element, angle, and vibe, is now part of the consideration set as well as outcomes.

AR-Powered Shopping was Already on the Rise; The Pandemic is Expected to Accelerate Growth

IKEA paved the way for AR commerce by helping customers move beyond imagining what furniture could look like in their spaces. Launched in 2017, the IKEA Place app helps customers visualize products from its catalog, through AR, at true scale, within any space.

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Customers measuring a virtual couch for real world fit

IKEA

Following the popularity of the IKEAs AR app, a handful of innovative brands have continued to demonstrate the promise of AR in online and in-store shopping. 

For example, Nike brought AR to the footwear and clothing categories. The experience uses AR to scan the customers' feet and find the right shoe for them. From scanning your feet to finding the perfect size, the process takes less than one minute.

Warby Parker is innovating the way customers try on glasses with their at home try-on AR experience through their mobile app. When a customer enters the "try on" area of the app, they simply flip their phone to selfie mode and select the frames they want to see on their face. While other glasses brands have tried AR, Warby Parker has paved the way with real-time selection of frames. 

Need to see which hair color and exact shade you need at the store? Walmart is using AR to interact with their customers on their shelves through a range of display options of hair color and recommended shades that customers can try on in real-time. Once a user scans the barcode provided, their camera opens to try on all options. Walmart is the first retailer to implement brick-and-mortar AR for their stores to enhance in-store experiences.

B2B brands are also seeing the benefits and value of implementing AR. For example, 
Cisco is using AR and VR to give brands interactive online catalogs. The goal is to give customers a better way to browse through Cisco offerings over traditionally static content, and has done so at an impressive scale. 

AR also is getting a big boost from one of the most revered, market-making innovators in the game.

In 2020, Apple entered the mix, mixed reality that is, with the integration of LiDAR scanners in higher-end iPhone and iPad models. These new cameras will give consumers the ability to scan and also virtually imprint vivid 3D images into online and real world experiences. Apple also launched what it refers to as the "world's largest AR platform," giving developers the tools they need to develop and market compelling AR experiences. AR doesn't just mean augmented visualization. The company also introduced spatial audio capabilities in its most recent AirPods Pro and Max lines, which sets the stage for immersive, integrated audio and video virtual experiences.

These moves, combined with Apple's rumored AR "glasses" on the horizon, you can bet augmented reality is going mainstream sooner than later. 

Accelerating the Future of Augmented Reality Shopping

Even in the early days of COVID-19, the market size for AR was estimated at almost $19 billion by 2023. With the pandemic lingering, consumer adoption of ecommerce and online shopping will only continue to gain momentum. This is AR's moment. 

Retailers and brands must think beyond traditional retail, commerce, and even legacy spatial design. Innovators must reimagine customer engagement and CX through a lens of next generation experience architecture, one that augments, enhances, and blurs the line between physical and digital (#PhyDi) worlds.

  1. Explore opportunities for the "wow factor," AR-powered engagement that augment digital and in-store experiences throughout the customer journey.

  2. Examine existing applications and identify opportunities for innovation in existing touchpoints and opportunities to introduce new engagement experiences (filters, preview placement, virtual "try-on's", interactive content/documentation/instructions/materials)

  3. Seek technology partners and innovators who are anticipating customer needs before those customers even realize them. As new offerings emerge, you'll realize outsize gains by being among the first to take them to market. The future of competitive differentiation isn't in products alone but customer experiences. 

The pandemic is encouraging consumers to explore new experiences and discover more intuitive and desirable paths to intended outcomes, all while staying safe. It's not enough to digitize touchpoints that merely facilitate basic transactions. Customers have new values, needs, and expectations now and they're only continuing to evolve. AR represents an opportunity for experience architects to imagine and enliven innovative, value-added, and engaging new worlds. Think of it like designing a video game but for life. 

The goal is to think beyond the ordinary. 

Amazing, productive AR experiences represent a competitive advantage and a promise to drive growth by increasing customer engagement, attracting new shoppers, and boosting conversion rates. 

In reality, augmented reality, the future of shopping is no longer what it used to be. 


This article was co-authored with Matt Gorniak, CEO, Threekit. The company has raised over $30M led by Salesforce Ventures and Shasta Partners. Prior to Threekit, Gorniak served as Chief Revenue Officer and co-founder of G2, a leading marketplace for business software reviews that has raised over $100 million. He has also held global sales leadership positions at Steelbrick and BigMachines, cloud Configure-Price-Quote (CPQ) platforms that were acquired by Salesforce and Oracle, respectively.