Augmented reality is the point of no return
Returns are a huge cost to both retailers and the environment. Snap Inc. ANZ managing director, Tony Keusgen, explains why incorporating augmented reality into the online shopping experience has the potential to halt the harm.
Despite a return to relative normality between online and in-store shopping, the retail return rate remains stubbornly high. A recent study revealed that Australians buy nearly 350 million clothing items online per year and 25% of these items are returned, with retailers unable to bear the cost of repackaging the goods for resale.
It’s not just a financial cost. It has been calculated that around 55 million items of returned fashion were sent to landfill in Australia in 2023, while carbon emissions also rocketed due to unnecessary transportation and packaging. But returns have been a fact of life for a thriving ecommerce economy. How can we reconcile convenience and variety with economic and climate realities? A simple tool may have the answer.
Online shopping and perhaps social media platforms in particular, have really opened up a wide range of new products and brands for consumers. The shopping experience has been transformed – merchandising is aspirational, AI is able to determine highly targeted product recommendations and targeting is more finely tuned to the consumer’s personal tastes.
But there is still one significant hole in the online shopping experience – trying things on for size. The inability to physically try clothes on before purchase leads to discrepancies in sizing or expectations of fit and that, in turn, results in high return rates. Typical online shopping behaviours include bulk buying different sizes to make sure there’s a good fit first time. At the same time, retailers need to make sure the end-to-end customer experience is competitive, which has made it very easy for consumers to return goods, but difficult for retailers to process them all.
Augmented Reality, or AR, is the missing link. Originally used to provide 3D renderings rather than simply flat photography, the technology has now progressed to allow the digital layering of individuals, letting you virtually ‘try on’ clothing. It was particularly useful during the COVID era to try on makeup hygienically. Now, brands such as Mecca and adidas have virtual try-ons for new products. Furniture and paint, similarly, feature in many apps with an AR overlay so you can see if Elephant’s Breath really will turn your sitting room into a 1970s school staff room.
It’s not solely about the physical fit. We’re well aware of the challenges the ‘will it fit me’ guessing game poses, and many of us already have a sizing rule of thumb: A loose 14 in one store might translate to be a snug XL in Zara and a second skin 12 in Cotton On. But it’s not just if it fits, but how it fits that matters to customers.
An emerging concept is manipulating the shape and size of a virtual mannequin, allowing customers to find a try on avatar that is as close as possible to their own body type. This is particularly useful in tight-fitting styles, where it’s harder to get an idea of how a body will actually look in that specific cut or cloth. Global collaborations such as those we activated this year between Vogue and Dior, and Versace, are beginning to feature meticulous attention to detail such as accurately depicting how certain fabrics hang and move on the body.
Alongside technological sophistication comes accessibility. Historically, AR involved substantial production costs and ability. Today, functionalities like Snapchat’s Lens Studio gives marketers access to free AR templates, and allows them to transform static images into 3D assets, reducing product build time from weeks to minutes. This means brands of all sizes can integrate AR into their marketing and improve online customer experience.
We’re already seeing significant results from the addition of AR to online retail. Shopping is the #1 reason consumers use AR, with 53% affirming that it makes retail experiences easier, better and faster overall, according to our Augmentality Shift research.
By 2025, we expect that three-quarters of the population will have engaged with AR one way or another. But for all its advances, AR shouldn’t be used in isolation. It should be used as a tool in a seamless, omnichannel customer experience. Alongside a virtual try-on, marketers need to show their products in a range of imaginative and varied situations – different sized models, a range of product scenarios – so customers can get the best possible perspective on how the item will look in their wardrobe or sitting room. The more context a consumer has, the more confident they can be in their purchase.
Many retailers are introducing fees to return goods, or having the consumer jump through a few hoops (repackaging properly, taking to drop off points rather than a local post office) which can cause concern that consumers will turn to competitors. The use of AR to create a culture of ‘right first time’ ordering should help counter this.
Instead of clogging up the roads of Australia with unloved, ill-fitting clothes and regretted impulse buys, AR should usher in an era that delivers more convenience to the customer, less expense to the retailer and a better environmental future for the planet. Not a bad ambition to have.
Tony Keusgen, is MD of Snap Inc. ANZ
