Returns are a high-cost issue for online retail: AR can lower your return rates

Distance selling, or “mail-order”, used to be a niche market. Today it is the norm. Since Y2K, first the internet then smart-phones have changed the way in which people shop. As a result, most businesses are changing the way they sell. As many discover, distance selling can be surprisingly painful.

One challenge encountered by many is the thorny issue of returned goods. Distance buying offers plenty of scope for misunderstandings with customers; the wrong sizes, wrong colours, wrong materials, wrong quantities and not infrequently the wrong items altogether. Product delivery adds additional problems, with damage en route adding to overheads and customer dissatisfaction.

Even without the cost of the returns, customer alienation can be enough to sink a business. All online businesses need to compete for Google rankings to attract web traffic. Once bad reviews begin to sour your reputation, the fall in volumes can be catastrophic. As a result and in light of the Distance Selling Directive [1], retailers are forced to adopt generous no-strings returns policies which isn’t cheap.

Fortunately, if you can get high-quality software developers on board, there is an exciting solution.

Augmented Reality (AR)

AR merges images of the real and virtual world. It can be used to enhance the experience of both real-world and online shopping, greatly reducing the likelihood of completing a sale on an unsuitable item. An AR application can let you see a remote product almost as if you held it in your hand.

The AR proof came with the Pokémon GO craze that began in 2016. Hunting Pokémons in city streets obsessed millions, demonstrating immense public enthusiasm for AR. The game passed one billion downloads in 2018 and players are estimated to have walked a distance equivalent to a return trip to Neptune playing it.

AR also greatly enriches the shopping experience itself, encouraging customers to buy and attracting new ones. AR gives goods an edge over rival products that lack it.

Companies embracing AR

Converse and Nike have both deployed AR programs to enhance shoe sales. Converse lets customers see virtual shoes on their feet, while “Nike Fit” also scans their feet to make sure they order the right size. As Nike explains “A more accurate fit can contribute to everything from less shipping and fewer returns to better [sales] performance”.

Home improvement outlets are deploying AR to help customers visualise new furnishings and décor in their homes and to check they will fit into the intended space. Companies developing or already using it include DecorMatters, Amazon, Wayfair, Crate & Barrel, West Elm, IKEA, Ashley, Target, Lamps Plus and Living Spaces.

Online jeweller Kollectin launched an AR app in 2019 (“Xperience Mode”) to enable customers to “try on” jewellery. Gap is developing AR software (“DressingRoom”) for its fashion range. Warby Parker has a real-time 3D app that lets customers preview how spectacle frames will look on their actual face.

Other companies pioneering AR include Lowe’s, Wayfair, Benjamin Moore, Sephora and MAC Cosmetics.

The cost of tailoring AR for particular products is falling quickly, but skilled developers and project managers are in high demand. The only question is which firms will be able to embrace it before their competitors do. Why not let the specialists here at Clifford Associates help you with the challenge of senior digital resourcing.

[1] https://e-justice.europa.eu/content_distance_selling_directive_977-603-en.do

 

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