E-Commerce & WebAR

AR will be as big as online shopping

May 14, 2022

It seems natural today that Amazon is a huge retailer. When online shopping was new, it was not obvious that it would turn into a thing. Augmented Reality is shaping up to be a trend on this scale.

In the early days, business at Amazon was so slow that the team sounded a bell every time somebody made a purchase. A few years later, online shopping had disrupted retail so much that companies who had waited out the early phase had a hard time catching up.

“We believe that Augmented Reality could be as disruptive for retail as web or mobile was”, say Armado Ortiz and Mark McGiffin in a report for IBM. “To ignore the implications of Augmented Reality”, say Ortiz and McGiffin, “is akin to ignoring the advent of online shopping.”

The conditions for disruption are there. By the end of 2020, there were 3.4 billion smartphones with advanced capabilities for Augmented Reality (AR). Nearly a third or 32 per cent of US-consumers used AR apps in 2020. In Europe, the market for AR and other forms of Extended Reality is expected to grow by 37.5% annually from 2020-2027. “Just as the digital age shattered music distribution”

Meanwhile, the global market for products and services related to Extended Reality is expected to grow from just over US$ 30 billion in 2021 to US$ 296.9 billion in 2024.“Early movers could upend existing channels”, according to Ortiz and McGiffin. “Just as the digital age shattered music distribution.”

Entering the mainstream

Napster, a music sharing platform that preceded streaming, was not a business, it was a hobby. Fast forward ten years: Distributing music digitally has simply ended the traditional business model for music distribution.
Equally, the applications for Extended Reality are moving from the margins to centre stage. It started with gamers who used it for fun. Then, AR saw some early adopters such as luxury brands and boutiques who employed it to wow their customers. By now, AR has a mass audience through companies like Home Depot, Target and Ikea.

How to unlock extended reality

The likes of Ikea and Amazon are very large companies, and it may seem daunting to take cues from them.
Unlocking extended reality, however, is doable and profitable for small and medium enterprises as well. Digital 3D models provide the point of entry.
“3D models open the door to the whole spectrum of Extended Reality”, says Michael Keppe, partner at Impala Services in Hong Kong.
Impala is a leading technical marketing firm. Its clients include Amazon and OBI, Target, Kingfisher und Lidl. The company offers award-winning digital services, from consulting to 3D modelling and from Web AR all the way to the creation of digital showrooms based on augmented reality.
“3D models are the nexus that connects all these possibilities”, says Keppe.

Even the first step is profitable

The first step use case for 3D models consists of imaging for print and online catalogues. Already at this initial level, 3D models save up to 50 per cent of time and money compared to traditional photography.But 3D models can do a lot more. They can act as digital prototypes in sourcing and manufacturing. They are the foundation for AR applications in retail, and it’s the same 3D models that make business meetings in AR stunning: Interacting with the participants as though they were really there. “After a while, you forget that what you see is a hologram”, says Keppe. “You look the person in the eye. It feels real.” “I do think that a significant portion of the population will have AR experiences every day”, says Tim Cook of Apple. In a recent report on AR and VR Facebook has made similar predictions.
Even now, 61 per cent of consumers in the US state that they prefer retailers that offer AR experiences. This does not only apply to online shopping: 66 per cent of consumers in Japan expect offline stores to offer AR experiences as well. Meanwhile, more than 83 million consumers in the US used AR every month in 2020.
“Extended reality is not a future state”, say Ortiz and McGiffin of IBM. “It is happening now. And now is the time to put it to work.“