Digital shopping is becoming increasingly popular among people of all ages, with people spending more time navigating through the Internet and online shopping becoming one of the most popular activities worldwide: As reported by Business Insider, e-commerce sales are expected to bring in $3.914 trillion this year.
To stay on top of the competition, companies must embrace new trends and provided enhanced technology solutions to meet customers’ demand for ever smarter services. One of the most innovative tools adopted in online shopping is augmented reality (AR). AR is revolutionizing the way customers interact with brands and is breaking down the barriers between physical and digital worlds, providing customers with a fully immersive and engaging shopping experience. AR allows customers to visualize products and test services the way they would do “in person”, helping them making a conscious buying decision even without physically handle the product.
For example, Alibaba’s e-commerce subsidiary Taobao launched a new product called Taobao MR Buy, which combines different technologies to create a futuristic shopping experience. Taobao has collaborated with Microsoft to make a sophisticated pair of glasses which allow customers to see products in augmented reality and have access to all relevant information. Thanks to holographic technology, people can also interact with items and give commands just by making hand movements, and they can even buy the product thanks to a direct connection with an e-commerce platform. By combining commerce with entertainment, Taobao has created a powerful tool for retailers to simplify and accelerate customers’ purchases.
On the retail side, Amazon introduced its new AR service Room Decorator through its mobile app, allowing customers to virtually see how a set of furniture would fit in their homes - and not just a single item. The service can be used on thousands of products available on Amazon: Simply clicking the button “view in your room”, users can arrange all items in their room by moving their finger on the display. The app also provides additional information such as recommendations and ranking, and after creating the ideal room, users can add any product directly to their shopping cart without leaving the AR experience.
Fashion firms are also adopting AR. Luxury fashion brand Gucci, in partnership with tech startup Wannaby, launched an innovative app to allow customers to virtually try on shoes. Through the app, users can choose a pair of shoes from the list of 3D models and by pointing the camera at their feet they can virtually wear the product. After wearing the shoes, users can also share pictures and feedbacks on social network platforms enhancing a virtuous cycle of engagement around the brand. By investing in a technological tool, Gucci is breaking down barriers between online and offline shopping and is leveraging sales from its e-commerce segment.
As reported by Citi Research, AR commerce alone is expected to represent 25% of online retailing by 2035. Today customers are more sophisticated and increasingly attracted by online shopping, especially after experiencing the Covid-19 pandemic. What we can see right now is that the rapid acceleration of digitalization, combined with increased competition, is disrupting existing business processes like never before. As reported by Pew Research Center, about 51% of online customers use their smartphones to make their purchases, a secular trend which made companies realize the importance of investing to enhance their mobile shopping experience.
The goal is not just to bet on a new technology, but rather to maintain an advantage and increase the chance of survival within a disruptive cycle of innovation which will last for the next decade.
The information in this article should not be regarded as a description of services provided by Delian Partners SA. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in this article are subject to change at any time without notice.
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