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How Augmented Reality Can Cut Down on Business Returns

According to a poll conducted by PwC, entitled “Global Consumer Insights”, before the pandemic, in-store shopping was the most popular option for consumers. The survey found that 47% of customers preferred to shop in-store for non-food items, while just 38% of customers shopped through mobile phones. Despite the fact that many people are warming up to this new style of purchasing, it does come with a few potential drawbacks.

Although consumption of goods is at an all-time high, highstreets are suffering badly: numerous businesses are closing, and many huge chain stores are going into administration. Communities are losing their vibrant town centres, which results in the loss of a significant number of retail jobs. Because of the rapid expansion of online commerce, an increasing number of stores are working toward the goal of becoming omnichannel by combining their offline and online sales locations. Excellent customer service is recognised as a fundamental component of the omnichannel experience and as a key factor in the generation of sales. As a result, the majority of firms in the retail sector offer free delivery as well as several options of returning things, most of which are free of charge. This includes the ability to return items purchased online to the physical location where they were purchased. The normal rate of returns is between 20 and 40 percent, although some companies have reported seeing rates as high as 70 percent. Many firms are unsure about the actual costs of returns to the business and, more specifically, the level to which this policy is being misused, which results in significant loss to the retail sector. This is because of the growing “free returns” policy that is usually extended to their customers.

Returns can be big business for customers, but can be bad news for the businesses themselves. Over the course of the Covid-19 epidemic, internet sales in the UK climbed by more than 46%, and over 38% of online customers in the UK now feel more secure in their ability to return online purchases. On the other hand, this has also resulted in a rise in the number of “serial refunders,” which is a term used to refer to customers who return a significant number of their purchases.

Because large quantities of returns result in a higher loss of money for the business that must repay clients, the purchasing patterns of customers who repeatedly ask for their money back can have a significant impact on the profitability of small businesses. According to a survey published by Openpay, online returns alone are predicted to cost retailers in the United Kingdom an average of £5.2 billion per year.  This is plainly a problem, and one that businesses would like to stop, but without denying genuine customers the right to return goods.  However, AR technology could be a key part of the solution.

Serial refunders aside, many returns are driven by the customer not liking a clothing product when they get it – the bane of online shopping.  It goes like this; the company exhibits their products on models to make them look good, the buyer sees the product and buys it, knowing that they can return for free if they don’t like it. Once received, they try it on and find that they don’t have the same physique as the model and look like a badly-packed kebab.  Disgruntled, they return the item, effectively costing the company money on postage and possibly even having to deal with damaged or soiled goods. 

But now, things could change, thanks to AR technology. The owner of Snapchat, Snap Inc., has partnered with the costume firm Disguise Inc. to develop an augmented-reality lens for their App. This lens will allow users to digitally try on costumes and then order them directly from their phones. The Snapchat user then browses the Disguise Snapchat store for clothes, which they can virtually “try on” using an AR filter that depicts how the outfit would look on them before purchasing it. After taking a full-body photo, the Snapchat user then browses the Disguise Snapchat store for costumes. A highly detailed virtual representation of the item is then placed on them, but suitably worked so that it looks like the real garment, regardless of the person’s body size or shape.

Lenses are Snap’s take on augmented reality experiences, and more than 200 million users of Snapchat interact with them on a daily basis. These lenses have the ability to sense, improve, and modify the world around us; yet, we have only scratched the surface of what is actually conceivable. With the development of new AR technologies, the virtual world can be superimposed on the real world. But as well as offering the consumer the ability to try garments on themselves rather than some super-sculpted model, AR has a number of advantages, such as:

  • It personalises online shopping. Customers’ online purchasing experiences can be made more personalised through the use of augmented reality in online retail. Customers will find tools that show them what sizes would fit them, what sizes would be too big for them, or show the actual size of a product in their space, as well as other features that would solve the problems associated with shopping online. These tools will allow customers to see what the clothes look like on them. Customers could even view themselves in all of the clothing in an online store in different combinations to determine which ones would look best on them. This was an improvement over the traditional method of showing mannequins wearing the clothes. Because of this, the amount of personalisation is likely to boost the conversion rates of the online shop, which will ultimately lead to an increase in sales.
  • It improved customer conversion rates. Increased conversion rates are one of the most notable advantages brought about by the use of augmented reality in online retail. When users have a clearer image of the item that they are considering purchasing, there is a higher likelihood that they will make a purchase. The use of augmented reality in online commerce enables online store owners to provide customers with a shopping experience that is both more immersive and engaging, which in turn leads to increased rates of product conversion.
  • It helps attract new customers. As a result of the pandemic, a significant portion of the population is still prevented from leaving their homes, and this situation is expected to persist. Consequently, the development of applications based on AR makes it possible to give individuals in remote areas a one-of-a-kind shopping experience for essential items. This is possible regardless of any potential limits, such as a pandemic, a geographical location, or a disability. In addition, a large number of individuals are drawn to this kind of technology and actively seek it out because they recognise the benefits it offers.

AR won’t get round the issues of serial refunders, or those who buy a clothing product, wear it to a specific engagement and then return it as unwanted or incorrect. It will, however, be a major benefit to those of us who genuinely want to return goods because the red blouse they have ordered is too close to their eyes, or they have put on a few more pounds than they thought.

With the highstreet continuing to suffer in terms of sales slumps, a growing number of companies are likely to switch to online sales and AR is going to become a major tool in driving sales, and it is only going to become more powerful.