Augmented reality (AR) in e-commerce: The use of AR in online shopping

E-commerce is now an integral part of the digital economy. While shopping in bricks-and-mortar stores used to be the norm, 82 per cent of consumers in Germany now also buy their goods and products via digital platforms. ^[1] However, there are still disadvantages in the area of e-commerce compared to bricks-and-mortar retail that cannot yet be offset digitally: Online shopping is associated with a higher risk, as customers can only judge the product (e.g. its size or colour) by looking at pictures and cannot touch or try it on. These disadvantages not only have a negative impact on the economic sustainability of companies, but also on environmental sustainability, as the return rate in e-commerce is significantly higher than in bricks-and-mortar retail.

To counter these disadvantages in e-commerce, great potential is attributed to a technology that is currently enjoying increasing popularity: Augmented Reality (AR). With the help of AR technology, it is possible to view digital images of physical products in advance, interact with them or have their functionality demonstrated virtually. To do this, 3D models of the products are created, which can be called up via an application. A special feature here is that the products – in contrast to virtual reality (VR) – can be displayed directly in the user’s physical environment. This not only gives you a better feel for the product as such, but also for how it looks in the room, whether it “suits” you, whether the product is the right size or fits into the kitchen niche, for example. The resulting positive effects on the shopping process are manifold: current studies promise that AR will make the shopping experience more lively and interactive for customers, arouse their curiosity and enable them to make better-informed purchasing decisions. Among other things, this increases the intention to buy or recommend the product and to visit the store again (for an overview of effects, see ^[2]).

Early AR approaches include computer-based AR applications that use the webcam on a PC or laptop to project content into the room or onto the user’s face. These systems are still widely used and are familiar to spectacle wearers through the Mister Spex application, for example. ^[3] However, the most commonly used devices for AR applications today are smartphones and tablets, which allow users to move more freely in their own environment and place the products in locations that go beyond the stationary viewing angle of a webcam. As large corporations and small and medium-sized enterprises (SMEs) have high hopes for the technology, these smartphone and tablet-based applications are becoming increasingly widespread. IKEA, for example, has been enabling its customers to virtually place certain pieces of furniture and design objects in their own homes since 2017. ^[4] With the AR application from Schöner Wohnen ^[5] allows you to imagine the colour on the wall in advance. Despite these already emerging advantages of the technology, we are only just beginning to realise the potential of AR in the field of e-commerce. While most applications currently rely on smartphones, tablets and the basic functionalities of AR technology (placing, rotating, scaling), as already described, individual projects and studies already give an idea of what will be possible in the future: Virtual mirrors and 3D scans of our bodies will allow us to dress virtually and shop together with holograms of our friends, while AR headsets will significantly expand and change not only our online but also our stationary shopping experience (e.g. ^{[6], [7], [8], [9]}).

Comparability with analogue phenomena

The comparable analogue phenomenon consists of trying out and evaluating products during the classic purchasing process in stationary retail. However, this is now also interspersed and accompanied by digital processes. Many customers research comparative offers for products on their smartphone while shopping or replace the conversation with the shop assistant in the shop with a search in online reviews and ratings. AR is seen as having the potential to better integrate this digital data and processes into the shopping experience (e.g. ^[10]) In e-commerce, the shopping process using AR interestingly has more in common with analogue shopping than with conventional online shopping. As in bricks-and-mortar retail, AR technology relies on the fact that the product can be examined, “picked up” and its functions checked and tested – possibilities that did not previously exist in e-commerce. A major advantage of AR technology over both processes is that the ubiquitous and permanent availability of a 3D model allows the product to be displayed virtually, directly and at any time in the consumer’s own physical environment, e.g. at home – a process that can only take place imaginatively for consumers in bricks-and-mortar retail and conventional e-commerce. The same applies to the customisability of products. The colour, size or components of a product can be adjusted virtually at any time, as can its duplication.

One advantage that the analogue purchasing process offers and that e-commerce will not be able to counter with AR technology is the direct availability of products. While goods are ordered digitally via the shopping basket in AR applications, they can be picked up directly in bricks-and-mortar stores.

Social relevance

The use of this technology has both positive and negative social implications. On the one hand, it is foreseeable that AR technology will reinforce the trend towards online shopping and thus the already visible decline in stationary shopping opportunities. This decline will lead to a decreasing revitalisation of city centres and thus to a decline in social interaction as well as the loss of jobs and social contact with employees and co-workers. On the other hand, AR technology will enable forms of social interaction in the future that were previously not possible. Social features in the applications allow the online shopping process to be carried out simultaneously, collaboratively and barrier-free with other customers who are active online. However, in many cases, online-adapted processes are not exactly known for promoting social consideration. In addition, data protection and ethical issues (particularly with regard to personalised 3D scan data) must be taken into account in the AR-based shopping process in the future.

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