14 Jan 2015

How AR can generate Mobile Commerce

How augmented reality can generate mobile commerce

Today over half of UK consumers use a smartphone and 20% use a tablet, a figure that has quadrupled in the last year alone. The rapid increases in mobile adoption and internet usage have propelled mobile commerce forward as the fastest growing retail sector in the UK, and augmented reality is increasing becoming part of this.

This article investigates the emerging trend of augmented reality in mobile commerce strategies, and how major brands are using it in a variety of ways to drive sales.

In 2011 one in every ten pounds spent with UK high street retailers came from mobile channels. By the end of 2015 shoppers will spend £14.95 billion using mobile devices. UK mCommerce will grow 78% in 2015, compared just 2% growth from PC-based purchases, according to online marketplace RetailMeNot, Inc.

Mobile commerce continues to be the fastest growing retail sector in the UK. As retailers start answering to emerging trends in consumer m-commerce behaviour, augmented reality is increasing proving to be an effective tool for capturing sales.

‘Brands are turning to AR because it puts mobile where it belongs, right at the heart of the marketing mix. Offline aspects of a brand’s marketing mix are now online and shortening the gap between customer engagement and their ability to purchase via their handset;’ Tamara Roukaerts, Head of Marketing (UK & EMEA), Aurasma.

Mind Commerce Publishing predicts that by the end 2015 mobile commerce revenues will be doubled by AR applications. While this seems like a startling prediction for a fledgling technology, there is building evidence to support the claim as innovative companies test AR’s potential and receive convincing results.


Connecting Print Advertising to the Online Store

The core function of augmented reality is visual content delivery, and the most common example of this is using the digital layer to enrich static media like magazine pages, DVD covers or posters.

While digital evangelists might call this a gimmicky way to tart up a dead medium, augmented reality provides a fast route from marketing material to the shopping cart, converting casual browsing into active buying.

ASOS are leaders in digital commerce and have explored AR as a tool for connecting print marketing to the online store, with great results. ASOS Magazine’s Editorial and Design Director, Duncan Edwards, comments ‘Print is important for an online-only brand such as ASOS because it gives the customer something tactile outside of the web environment. However mobile is the fastest growing platform for ASOS with a fifth of all traffic. Therefore to merge print with mobile is win win. The magazine becomes instantly shoppable via the ASOS m-commerce site.’

Similarly, Tesco has been incorporating AR into its Real Food Magazine, overlaying the pages with links to recipes, videos of cooking shows and the ability to click through to buy products online. The first version of the magazine experienced an average click through rate of almost 15% and some pages as high as 60%, which is incredibly high considering the average click through rate on a banner ad is 0.3%.

Mark Cody, Senior Mobile Marketing Manager at Tesco reveals ‘our first three months of using AR across our business has exceeded our expectations. With more recent issues [of Real Food Magazine}, those numbers continue to be consistent which his very encouraging. Other brands and retailers are running trial campaigns all the time and this trend will be sure to continue.


Simulating Product Interaction

When considering the retail environment either online or in bricks and mortar stores, the importance of customer interaction with products is crucial. And when physical products aren’t available to touch and examine, visualisation becomes integral for consumer confidence and trust in the offering.

Augmented reality can deliver three-dimensional product visualisation and simulate interaction by letting users ‘pick up’ objects, examine them and move them around, creating a compelling digital replacement for a physical interaction. This is often used in print media to create a visceral product experience from a two-dimensional jump off point.

Ikea employed augmented reality in its 2013 catalogue to inspire immersive product experiences. The application lets users choose a sofa, change its colour, styling it up with cushions and throws and view it in different areas of the home.

Maria Ekberg Brännström, Project Leader for the IKEA Catalogue comments ‘AR gives the possibility to interact. Interactivity engages and lets the user explore and experience as close to reality as possible. It is a new way of explaining and presenting and as users get more inspired and engaged they are more likely to buy our products.’

With AR sales strategies being an emerging trend, it’s hard to find publicly available results data. One of the most cited studies is Hidden Creative’s research on how augmented reality affects intent to buy. They found the likelihood of a consumer making a purchase after experiencing an augmented version of a product increased by 135%, versus looking at a product image.

The results also showed that AR has a positive impact on value perception, with 33% perceiving the product experienced through AR to have a higher value than the non-AR product.


Try Before You Buy

The rise of the virtual changing room is ever increasing with Tesco shifting their virtual try-on platform from an opt-in Facebook app to a full time aspect of the online store after it proved a huge success with customers. Total Immersion is the European leader in this space with its TryLive platform, which allows customers to virtually try-before-they-buy from online stores. The platform has focused on eyewear and is finding success from a growing client base. One of their advocates, French eyewear retailers Direct Optic, testifies to its effectiveness in increasing sales; ‘Shoppers using the 3D virtual try-on feature have 41% higher conversion rates and an average basket 12.5% higher than those not using virtual try on.’


Enhanced Product Visualisation

Mitsubishi Electrics has experimented with AR in many aspects of their retail offering, one of which uses augmented 3D product visualisation to help customers imagine items in their home before they purchase. Gabriel Weiss of Mitsubishi Electric Cooling and Heating comments ‘If she can see a system in her house virtually, thanks to augmented reality, sales rise — and have they ever.’

He goes on to say that because of their use of augmented reality ‘Mitsubishi Electric is projecting an increase of millions in revenue next year, while simultaneously decreasing future costs for printing and distributing product catalogues by millions of dollars.’ The company plans to extend the initiative to more countries and distributors around the world.


Bringing E-Commerce to Physical Stores

Mitsubishi Electrics has also invested in augmented reality as a sales tool within their physical stores, which has proven hugely successful. The AR conveys comprehensive information in a simple visual way and incorporates consumer interaction to increase engagement with the products.

A key aim of the AR strategy was to curb ‘showrooming’ by customers; a growing trend where savvy shoppers sample products in physical stores then go online to buy them at the best available price. The company aimed to capture more sales in store by creating a compelling experience through additional product content, to encourage customers from casual browsing to committed purchasing. By bringing the best features of online shopping into physical stores they were able to achieve this.


Augmented Reality as a Shopping Utility

While Mitsubishi aims to curb showrooming, non-vertical retailers can work with this behaviour to enhance their customers’ experience by facilitating comparison, extra information and recommendation.

IBM Research has created an AR app for supermarket shoppers that will turn their mobile phones into an in-store shopping aide. It compares products and pricing, delivers nutritional information, receives promotions in store and learns user preferences enabling tailored recommendations for each customer. It also provides a useful tracking tool for retailers as they can follow a customer’s journey through the store and see which content they’re engaging with.


AR Providers are Investing in M-Commerce

The use cases for augmented reality in m-commerce are encouraging, and AR’s role in commerce is set to expand over the next year or two with many of the UK’s leading AR providers pivoting their business strategies to focus on this area.

Jessica Butcher, Co-Founder and CMO of Blippar says ‘It’s the most basic functionality that this tech should deliver. An ability to spontaneously make a purchase decision based on anything that sparks your interest in the real world…It’s hugely hugely powerful.’ The company sees m-commerce as a huge area for growth within their business and are working with Walmart, Budweiser, Maybelline and L’Oreal on augmented reality strategies.

Similarly, Tamara Roukaerts, Head of Marketing at Aurasma sees a bright future for AR commerce; ‘Our partners – big corporations like Tesco, Universal Music, Condé Nast – are investing in AR and building devoted AR teams to roll it out across their business.

For all enquiries, contact Andy White, CEO of Spectre on 023 8184 9811  or email us on hello@wearespectre.com