We’ve written a lot about how retail is undergoing some massive changes due to technology. The closure of a number of major American chains, as well as Amazon’s recent move into the grocery space with its acquisition of Whole Foods market, signal an industry in flux as it reckons with the ongoing transformations of the eCommerce revolution.
In the last decade, the thinking held that eCommerce might completely supplant brick and mortar retail. It’s easier to shop online than go to a store. Consumers don’t have to deal with lines, limited retail stock, or temper tantrums from kids – kids of their own, or their linemates. But brick and mortar has shown surprising resilience, and even eCommerce giants are recognizing the appeal of an Omnichannel approach (emphasizing a mixture of brick and mortar and online shopping).
But as technology improves, what many analysts are seeing on the horizon is a hybridization of the brick and mortar and online shopping experience. It’s not just that retailers will seek to develop their distribution networks to compete in both channels, but that both channels will come to resemble each-other more than ever before.
One of the biggest advances spurring this transformation in the marketplace is “AR,” or Augmented Reality. A great new profile in Supply Chain 24/7 examines this emerging tech and how it could transform the retail experience, as well as how companies organize their distribution and Supply Chain networks.
The occasion for the profile? Apple has just released its ARKit, which is a framework for developers to make Augmented Reality applications for iPhone and iPad devices, a development that might finally allow for mass adoption of AR, a technology that’s been on the horizon for years now.
So what is Augmented Reality exactly?
If you remember the Pokemon Go craze of last summer, that was a great example of an elementary version of this tech. It’s similar to virtual reality, but it’s a bit different. Augmented Reality superimposes digital information on top of a base layer of visual information from a camera – say in an iPad, or smartphone, or from a device like the defunct Google Glass. It “Augments” reality by adding an additional layer of information on top of what you’re seeing, and it might come to make brick and mortar shopping feel like online shopping, and vise versa. It also stands to add significant value in the distribution and Supply Chain space.
Here are a few of the most impactful potential applications:
1. Augmented Reality will allow “virtual showrooming” of apparel goods at home, allowing consumers to “try on” clothes using their iPads or other digital devices. This might drive up conversion rates for online shopping, and drive down the amount of customers requesting returns (which currently sits at a very high 30% for online apparel shopping).
2. It will let customers do “spatial projection” of home goods, using augmented reality to see what furniture or fixtures would look like in their homes. No longer will a consumer have to imagine how that Ikea couch looks in their living room: they’ll be able to hold up an iPad and see said couch projected right into their space. Ikea introduced an app in 2014 that allowed customers to do just that, but the technology hasn’t become universal across a wide variety of devices just yet.
3. eCommerce helped revolutionize retail by offering more personalization for customers based on data – including providing customer reviews and predicting other products that customers might like based on their purchases. Augmented Reality will make brick and mortar retail shopping resemble online shopping by offering an additional layer of information and personalization for the in-store experience. When a customer holds their device up to a product, AR can overlay information such as product reviews and products “people also bought” enhancing the brick and mortar experience and bringing it more in line with eCommerce.
4. Some of these possible retail applications could be huge, but Augmented Reality offers new opportunities for Supply Chain and Operations planning as well. It will allow companies to visualize workflow changes to warehouses and distribution centres. It will provide workers with extra information during the pick and pack process, and speed up last mile delivery – the so-called “holy grail of logistics” by overlaying information so drivers can more quickly and accurately identify packages and the order in which they should be loaded and unloaded.
It’s cool stuff. There are already some trial applications of Augmented Retail with various vendors and Supply Chains, and it could become pretty universal sooner than we all think. For our money, Augmented Reality deserves a place alongside Blockchain, 3D Printing, Workplace Automation, Artificial Intelligence Hyperloop, and the Internet of Things as the technologies that stand to have the biggest impact on retail distribution and Supply Chain over the next 5-10 years.