How Augmented Reality and Apple Will Transform Retail & Logistics Supply Chains
From B2C to B2B, augmented reality has the potential to change the world in many ways, in this article we describe the top five ways this new revolutionary technology could potentially change retail, logistics, and the supply chain. By Karl Siebrecht
We have yet to see an implementation that has the potential for mass adoption… until now. Apple’s participation somehow makes augmented reality feel more like, well, a reality.
What’s the difference between AR and VR?
- Virtual reality: Artificial, computer-generated simulation of a three-dimensional environment. It requires stand-alone technologies such as headsets and controllers to immerse users and make them feel like they’re experiencing that reality first-hand – including visuals and audio.
- Augmented reality: Layers virtual elements onto the real world. It blends digital components and the real-world imagery and can be experienced through smartphone and tablet devices.
Of the two, many have predicted that AR would be first to reach mass adoption. Apple’s announcement furthers that claim, as ARKit will be inherently available through iOS 11 upgrades – creating “hundreds of millions” of iOS devices that are ARKit-enabled almost instantly.
“With iOS 11, we’re delivering the biggest AR platform in the world, and it’s available today for developers to begin building AR experiences using ARKit for hundreds of millions of iPhone and iPad users.”
It goes on to say:
“Apple is introducing a new platform for developers to help them bring high-quality AR experiences to iPhone and iPad using the built-in camera, powerful processors and motion sensors in iOS devices. ARKit allows developers to tap into the latest computer vision technologies to build detailed and compelling virtual content on top of real-world scenes for interactive gaming, immersive shopping experiences, industrial design, and more.”
We all remember the phenomenon of Pokémon Go, which had 28.5 million daily users at its peak. Though rudimentary, it gave the masses their first glimpse into a future with AR. iOS 11 will be available in the fall and will immediately put AR-enabled devices in the hands of millions of consumers. So, besides gaming, what will businesses do with it?
From B2C to B2B, AR has the potential to change the world in many ways, here are the top five ways AR will change retail and the supply chain:
ONE. Closing the Gap on Indecision
One of the more obvious use cases for AR is how it will improve eCommerce shopping experiences by creating a new kind of “showrooming.” From virtual fitting rooms to spatial projection, AR applications will increase conversion rates by eliminating uncertainties that, until now, have been inherent in online shopping.
For apparel, virtual fitting rooms will make it easier for customers to “try on” clothes from home. With an estimated 30% of online apparel sales returned, being able to “see” how something will fit before buying it will reduce the number of returns and, theoretically, convert more sales while boosting customer satisfaction.
For items like homegoods, some companies are using AR for spatial projection. IKEA, one of the few that are spearheading this effort, is working with Apple ARKit to create an app that overlays IKEA products onto whatever image is in a user’s camera frame (ie. living room). Customers can use AR technology to better envision how products will fit in a given environment – both dimensionally and aesthetically.
TWO. Let’s Get Personal
One of the biggest trends in eCommerce is personalization – of which there are many different forms: navigational, predictive recommendations, personalized content, dynamic remarketing, and more.
What started as adding “Frequently Bought With” and “You Might Also Like” promotions on product pages that leveraged large sets of generic buying behavior has evolved into recommendations based on individual customer data.
But, up until now a lot of personalization efforts have only relied on behavioral data. With AR, retailers can take personalization a step further by using technology to further immerse customers in the buying experience. Customers can come closer to interacting with products; they become almost tangible.
From an interactive perspective, retailers can help buyers be more confident about their online purchases.
“This couch will fit perfectly here.”
“This grouping of picture frames will fit on my wall.”
“These sunglasses are the perfect shape for my face.”
The list goes on.
THREE. It’s Here, It’s There, It’s Everywhere
Apple ARKit will make AR-enabled devices ubiquitous. Additional devices and controllers aren’t required like they are for VR, and it will be available within months.
Currently the number of active Apple users is more than 1 billion, with more than 800 million iOS devices (iPhone, iPad, and iPod Touch) in active use around the world. As more and more of these users update to iOS 11, it’s easy to predict that there will be hundreds of millions of ARKit-enabled devices in use with AR-capable apps downloaded.
What that means for retailers and brands is that development on apps should start immediately. With ARKit, Apple has promised better object scaling and says it uses a fraction of the phone’s CPU – something other AR apps haven’t quite yet accomplished. Better battery life hasn’t historically been Apple’s strong suit, but enabling a technology that’s kinder on the battery than its AR counterparts could be a start.
FOUR. Apple ARKit Will Evolve B2B
AR will change retail and B2C, and the same can be said for B2B.
B2B eCommerce sales are projected to outpace B2C sales by 2020. Similarly, mobile commerce growth is outpacing desktop eCommerce. In combination, B2B and mobile commerce growth create a perfect storm for AR apps to innovate B2B operations.
Whether it’s for spatial planning for new office spaces and interiors, or creating simulations to train employees, AR’s ability to layer digital components onto reality will remove a lot of today’s manual processes.
A very basic example is the potential to quickly translate other languages with an AR app. Google Translate’s feature, Word Lens, can quickly scan an image that contains text and translate it into more than 30 languages in real-time.
FIVE (SIX) (SEVEN). “See” Supply Chain Operations Differently
Business use cases also extend to how AR will transform logistics. This section has several dimensions:
- Warehouse planning
- Pick-and-pack services
- Last mile of delivery
As warehousing operations transform into more than just storage facilities and distribution locations, layouts will have to change to accommodate varying sections of business; for example, product assembly, labelling, and more. With AR, new arrangements can be planned at full-scale to more accurately test placement and workflow before implementation.
For many warehouses, pick-and-pack services, especially during peak season, are completed by temporary workers. Implementing an AR solution for pick-and-pack activities has shown significant improvements in productivity by shortening the learning curve and providing constant picking validation that updates the WMS in real-time.
Operationally, it can be used to overlay boxes in the warehouse to show contents that need to be picked and reduce the time it takes to manually identify items. Once a package is ready for shipping, AR tools can be used to reveal order ship times and handling instructions for when carriers arrive.
Last Mile Delivery
Last Mile Delivery is the most expensive step for eCommerce retailers. As customer bases grow and are more spread out, getting products shipped to customers cost-effectively has become a priority for many retailers.
According to a DHL Trend Research report, it’s estimated that drivers spend 40-60% of their time locating the correct boxes within their truck for the next delivery. For many, this process relies on their memory of how the truck was loaded. An AR app could be used to streamline the time it takes to identify packages upon delivery and reduce the time it takes now to figure out what package goes where.
Additionally, much of Last Mile Delivery logistics has to do with actual navigation. When a driver is delivering to a location for the first time or has to navigate the interior of a building, AR can be used to overlay the environment and show directions. If there aren’t any directions available, a driver could add markers to update an independent database – essentially crowdsourcing users to build out the database.
There’s a lot of market potential for AR and Apple’s involvement makes it feel like it’s actually here. Innovative retailers and businesses will look at AR as an opportunity.
For B2C and B2B sales, it’s a chance to provide customers with more information during the buying journey and instill confidence in the purchases being made. For businesses, AR will help streamline operations, planning initiatives, training, and executing against demand.
But AR is just the first step.
Society will become more comfortable with AR, and as that happens, the opportunity for virtual reality will start to make more sense than Google’s release of Google Glass a few years ago. Apple ARKit reduces the gap between today’s technology and tomorrow’s and creates a stepping stone to VR-enabled devices.
Though AR and VR have been on the horizon for years, Apple ARKit makes the future feel a little closer than it has before.