Technology

Augmented Reality – The Next Big Thing in Retail? I Hope Not

A lot has been said and written about Augmented Reality recently, so much so that it is now acceptable to just refer to this fledgling technology as AR. However, just in case you have been out of the loop for the past 12 months let me summarise what AR is in as few words as possible: “The solution for every problem known to man, ever.”

Seriously, that’s what I am picking up from the various blogs and articles I read as well as the conferences I attend. AR is being heralded as this messianic solution. From automotive solutions to advertising, medical to media, everybody is raving about it. However there is one sector that seems to be more excited about AR than any other... retail.

The “official” definition from Wikipedia states:

Augmented reality (AR) is a term for a live direct or indirect view of a physical real-world environment whose elements are augmented by virtual computer-generated imagery. It is related to a more general concept called mediated reality in which a view of reality is modified (possibly even diminished rather than augmented) by a computer. As a result, the technology functions by enhancing one’s current perception of reality. (http://en.wikipedia.org/wiki/Augmented_reality)

AR is clever, it really is. There are some amazing uses and applications out there. Currently the biggest use of AR is a set of smart phone applications displaying relevant information overlaid on a map or image of the real world using the phone’s camera. If you want to try this out for yourself and you have a smartphone, you can download Layer or Yelp from the respective app stores, it’s free.

Layar is a real success story; it has raised $4.4m in various funding rounds and has spawned numerous spin offs and copycats. But here is the problem, most of them are terrible. A very large furniture company recently launched a feature that allowed you to design your dream room online. You could then view it via an AR application that involved either printing or picking up a special card in store. It’s a complete gimmick. Sure it was good fun but did it really help me in my quest to home furnishing nirvana? No, not a chance. The technology was slow. It was frustrating to use and entertainment value aside, who prints things anymore?

Another example comes from an online fashion retailer that allowed you to try on various accessories, hats, sun glasses and, quite disturbingly facial hair, all via the comfort of your webcam. It was hilarious fun; we managed to turn my five year old daughter into our vision of a 20th century European dictator, with a trilby hat. Would she look anything like the image being represented on the screen if she really had the hat on? Again, no, not a chance.

Retailers need to wise up. Yes this is all great fun, but when it comes to the important point of selling product, AR is a long way away from being the panacea many industry experts are predicting. I was completely staggered to discover a huge high street brand recently advertising for an Augmented Reality expert to join its team. The same company has no basic mobile offering, a crazy ecommerce strategy and it’s being humiliated on the high street on a daily basis.

In retail, regardless of sales channel, there is one enduring truth. You will succeed if you are accessible in the right market, have the right product, at the right price with the right level of service. This is basic stuff. At the moment, AR for retailers is a complete distraction. Today it fulfils none of the above pre-requisites. If anyone tells you an investment in AR over the more traditional marketing methods will help to sell more product, they are lying.

The popularity of AR seems to be being fuelled by venture capitalist firms that have pumped in a lot of money and are now desperate to find a revenue opportunity. It’s the Virtual Reality of the 90s and the Artificial Intelligence of the 60s all over again.

I don’t mean to sound like a complete technophobe. AR will play an important part of the future as the technology matures. But for retailers it’s not here yet, not even close.

Choosing Your Ecommerce Infrastructure

An article for IT Donut

As reliance on web sales grows, many merchants are finding that their current ecommerce platform, or set of services may not be as scalable as they initially imagined. Many merchants originally began with very low cost solutions. While this is completely appropriate for the startup, the growing merchant needs the capability to scale, both with the software they have chosen and the related eco-system of services.

Choosing the right architecture (or service provider) for the long term is a difficult task. I speak to hundreds of merchants and web designers and the story is the same: it’s not easy. The biggest challenge is to base a decision on both the current requirements, plus the often ambitious plans for the future. The key is affordable scalability.

So, what are ecommerce services? The simple answer is, they are the supporting infrastructure you need to sell online:

● Hosting

● Support

● Integrations - Payments, accounting, stock control, etc

● Compliance – PCI DSS, Data Protection Act, Distance Selling Directive, etc

There are many ecommerce packages that can offer you everything from one source. My company, offers a hosted product (Actinic Express) as well as desktop applications, and there are many others. The advantage of taking a web-based option means the technology is not your problem; everything you need to sell online is provided. This is often the way many merchants get started. After all ecommerce can be fairly confusing, especially for traditional retailers moving into this space. However, as I said before, will it grow with you and cope with whatever you throw at it?

Hosting and support

Choosing the right hosting is one of the most important decisions an e-tailer can make. Any store, regardless of the features, will live or die by its hosting. To put this into context, your store is only as good as it’s capability to handle its peak traffic, e.g. before Christmas. Slow loading, or worse, an unresponsive site is a quick way to be ignored by potential and existing customers. The problem also affects your SEO. If your site is slow your search engine ranking will tumble because Google now penalises poor response speed in its algorithm. Likewise when you are just starting out, you must keep costs low. Unfortunately, the two objectives contradict each other. So my tips are:

  1. Look for a host that knows about ecommerce; not just as a cheap after thought, but one that has a detailed knowledge of what it takes to keep your site running.

  2. Packages are important. A good host will be able to upgrade or downgrade your infrastructure requirements quickly and easily.

  3. Pick a host that is local to your core demographics. It might seem cheaper to rent that box in the USA, but if your customers are in the UK expect trouble.

  4. When it all goes wrong you need to know things can be put right and quickly. All hosts, regardless of how good they are, suffer downtime. It’s what they do when there is an outage that's important. So check the service agreement for their guaranteed response time.

  5. Support is critical. Nothing beats picking up the phone and talking to someone that knows what they are doing.

Payments

The ability to take payments online is another critical ecommerce service all e-tailers require. In the UK there are many PSPs (Payment Service Providers) ranging from the ubiquitous PayPal to our own Actinic Payments and long-standing companies like WorldPay. Most share a number of features so check for differentiators such as anti-fraud services and the level of integration with your ecommerce package.

Every online merchant regardless of size should accept PayPal; the barriers for getting started are low and potential customers like and trust the brand. However, when a merchant grows, cost considerations need to be evaluated. As a rule of thumb PayPal charges its merchants 3% per transaction. While this doesn't sound a lot when you are turning over a small amount, as your store grows this becomes a big issue.

Data security

Likewise with compliance, the UK has a fairly strict set of rules for handling card data known as Payment Card Industry Data Security Standard (PCI DSS). My theory has always been to keep things simple: make it someone else’s problem. By using a compliant PSP your ecommerce store never sees customer card data.

In conclusion

Ecommerce services are the lifeblood of a successful store. The absolute top performers all have the same things in common. They are responsive and most importantly safe. Choosing the correct services for your store may mean the difference between success or failure, so it’s well worth considering carefully.