How will AI, AR and VR technology innovations impact online marketplaces and the wider e-commerce space in 2024? Ed Turner, CIO, Asendia UK, observes: Masu.
Online retail is entering a new phase, where virtual try-on services, hyper-personalization, and data-driven relationships are the norm. The transformation will be driven by AI-driven analytics (artificial intelligence) alongside AR (augmented reality) and VR (virtual reality) tools. These are used not only to enhance the consumer aspect of online shopping, but also to drive the retailer’s own operational benefits.
According to IDC, AI technology will be in 90% of new enterprise apps by 2025, and spending on AR/VR is expected to reach $72 billion by 2024. This represents a significant increase in digitally enhanced services, prompting marketplace vendors to adapt or risk falling behind.
AI for travel
For sellers in the e-commerce market, the integration of AI technology into logistics operations will be of great benefit. First, AI-powered demand forecasting allows merchants to optimize inventory levels and reduce out-of-stocks. As a result, sellers can optimize their supply chains, reduce storage costs, and allocate resources more efficiently, resulting in higher profit margins.
Second, AI-powered route optimization has a direct impact on shipping costs for sellers. By leveraging algorithms that take into account real-time data such as traffic conditions, disrupted flight routes, and delivery destinations, e-commerce sellers can ensure cost-effective and timely deliveries. This efficiency not only improves the overall customer experience, but also allows sellers to offer competitive shipping rates, attracting more customers and driving loyalty.
Additionally, AI automation in logistics helps streamline the order fulfillment process. Automated sorting systems, robotic picking and labeling, and self-driving vehicles speed the movement of goods and shorten the time from order to final delivery. This increased efficiency not only positively impacts customer satisfaction, but also allows sellers to expand their business without proportionally increasing labor costs.
All this not only helps maximize profitability, but also contributes to sustainability. Optimizing delivery routes and improving returns management can reduce air and road miles traveled, reduce fuel consumption, and reduce carbon emissions.
Mixed reality has landed
While the user base for AR/VR headsets has traditionally been centered around gamers, experts predict that everyday uses for mobile computing, entertainment, shopping, and more are just around the corner. Launched in February of this year, Apple Vision Pro, Apple’s mixed reality headset, shows what’s possible.
Experts suggest that Vision Pro’s advanced eye-tracking and spatial mapping capabilities enable a highly customized experience. This opens up the possibility for online stores to adapt to personal preferences, highlight relevant products and provide real-time recommendations.
The future of AR and VR in e-commerce is to create immersive, interactive, and personalized shopping experiences. As the technology matures and becomes more accessible, we expect to see AR and VR seamlessly integrated into online shopping, providing new levels of convenience and engagement. Dangerous if ignored!
Product visualization and virtual try-on
Retail brands are already integrating AR and VR into their online offers. IKEA was an early adopter of the IKEA Place app, allowing customers to visualize sofas and bookshelves in real-world environments. Brands are seizing the opportunity of AR to overlay detailed product information such as specifications, user reviews, and prices directly onto e-commerce websites.
Virtual try-on experiences for fashion and accessories are also attracting attention. Thanks to AR and VR apps, shoppers can see how clothing, eyewear, jewelry, and cosmetics will look on them without actually trying them on. Notable examples include the recent launch of virtual try-on tools by industry giant Amazon and luxury men’s clothing retailer Mr. Porter.
Brands can create interactive AR demos to showcase product features and functionality. For example, an electronics manufacturer can offer his AR demonstration of a smartphone’s camera functionality. AR can also provide personalized recommendations and styling advice based on customer preferences and past interactions. This improves the shopping experience and drives upsells.
Better decision making means less profit
AR helps customers make more informed decisions by providing additional context and information. This reduces uncertainty and increases confidence in online purchases. Returns may be reduced. This is something online retailers are very keen to achieve.
The tsunami of technological innovation that is upon us is exciting, but I urge us to maintain a certain humanity. After all, the personal touch requires a real person somewhere in the value chain. Speed and convenience are important, but people also want to believe in something. Trust remains a key factor influencing consumer behavior. Ascendia research shows 70% of UK shoppers are willing to pay more for an authentic brand due to factors such as delivering on promises, supply chain transparency and sustainability efforts. It became clear that he was thinking that.
If you can embrace the right technology for the times, while maintaining a sense of humanity, purpose and authenticity, you’re in for the long haul.