New ways of letting shopper see or experience products before they buy them contribute to growth by increasing conversion, reducing returns and a heightened brand value. We are only at the beginning of this experience revolution and the companies with the most experiments will be the winners of tomorrow’s retail.
One of the most transformative ways technology is starting to change human experience is by combining our physical reality with computer generated experiences.
Product managers should lead the ideation, design and implementation of these experiments.
Extended Reality (XR) is the realm of using technology to extend the experience and feel of reality beyond the 2 dimensional Web and even the physical experience. XR includes virtual reality (VR), augmented reality (AR) and mixed reality (MR).
According to research by MarketsandMarkets, the market size of all extended reality technologies combined is expected to reach USD 125.2 billion by 2026, at a compound annual growth rate (CAGR) of 30.6% between 2021 and 2026.
Augmented Reality (AR)
AR technology overlays digital content onto the physical world, allowing customers to visualize products in a real-world setting before making a purchase.
Augmented Reality (AR) is transforming the way customers interact with products and services in e-commerce.
Some examples of how AR is being used in e-commerce include,
With virtual try-ons AR allows customers to virtually try on clothes, footwear, accessories, or makeup, providing a realistic representation of how the products would look on them.
With furniture placement AR helps customers visualize how furniture and other home decor items would look in their living spaces.
Some of the best examples of AR in ecommerce include:
IKEA Place allows users to virtually place furniture and home decor items in their living spaces and help customers visualize how the products would fit and look in their homes.
Sephora Virtual Artist enables customers to virtually try on makeup products, such as lipstick shades, eyeshadow, and foundation, using their smartphone camera.
Warby Parker Virtual Try-On uses AR technology to allow customers to virtually try on glasses and sunglasses.
Nike Fit uses AR and computer vision to measure users' feet and recommend the right shoe size.
Mixed Reality (MR)
Mixed reality (MR) is a technology that blends the real world with the virtual world, allowing users to interact with both simultaneously.
MR is different from augmented reality (AR), which only overlays virtual objects onto the real world, and virtual reality (VR), which completely immerses users in a virtual environment.
MR is still in its early stages of development, but it has the potential to revolutionize many industries, including ecommerce. For example, MR could be used to allow customers to:
The Microsoft HoloLens is a prime example of MR technology. It is a headset that blends holograms with the real world, allowing users to interact with digital content in a three-dimensional space. Applications range from gaming and education to professional training, industrial design and retail.
Virtual reality (VR)
Virtual Reality (VR) technology can be used to provide a more immersive and interactive shopping experience for customers.
VR technology creates a simulated environment that can be explored and interacted with using specialized equipment, such as VR headsets.
Some examples of VR applications for ecommerce include:
Virtual showrooms allow customers to explore virtual showrooms and visualize products in a more immersive and engaging way, such as seeing how furniture will look in a room or how a car will look in a virtual garage.
Virtual try-on allows customers to try on virtual versions of clothing, accessories, and makeup in a realistic and interactive way, helping them visualize how the product will look and fit before making a purchase.
Interactive product demos allow customers to interact with and explore products in a more engaging and realistic way, such as seeing how a new piece of technology works or how a new appliance can be used in the kitchen.
By using VR technology to provide a more immersive and personalized shopping experience, ecommerce businesses can differentiate themselves from competitors and drive long-term success.
VR technology is still relatively new and requires specialized equipment, which may limit its adoption among some customers but several companies are experimenting with utilizing VR in their customer touch points.
The Metaverse
Metaverse: The term "metaverse" refers to a collective virtual shared space, merging physical and virtual reality.
In a metaverse, users can seamlessly move between different virtual experiences and worlds.
The metaverse is often imagined as a more complex and integrated version of the internet, where virtual environments, social interactions, commerce, entertainment and high on the business priority list, shopping converge.
Several companies and platforms have been working toward creating elements of a metaverse but a full-fledged metaverse is still an evolving concept.
The Facebook Metaverse, announced by Meta in 2021, is part of the company's long-term vision for the future of the internet.
Mark Zuckerberg, the CEO of Meta, described the Metaverse as the next big computing platform, following the transition from the desktop to the web and then to mobile devices.
What’s next
While we mostly have heard about AR and VR in commerce and consumer experiences, we're only at the beginning of the evolution of these technologies and most people do not understand what impact XR will have on human life in the future.
Keeping an open mind and being open to experiment are key to staying relevant for ecommerce and retail product managers who will be introducing most of these technologies to their organizations and customers.