What is Augmented Reality and What is The Future of AI in E-Commerce

8 min readLast updated: May 16, 2020
Ramin, a Managing Partner at SKU Agency focused on growing your business through strategy, technology & design. Ramin loves to devour business books, podcasts, and blogs. In his spare time (which is minimal) he enjoys hanging out at home with his wife and three kids - and occasionally riding the Peleton.

Over the last few years, we’ve witnessed augmented reality fitting into everyone’s daily life in a multitude of ways. From the rise of Pokémon GO and other related Niantic games to Instagram filters, internet users everywhere are experimenting with programs that overlay the real world and give them a more immersive experience.

While this sort of technology is ready-made for gaming and selfies, it may be less apparent how to harness it for e-commerce. However, many companies have managed to do just that, and we’re already seeing augmented reality and AI in e-commerce settings.

We’re watching this trend closely, as Shopify itself has unveiled its very own AR-powered software to help online retailers make more sales. By staying ahead of the curve, your online storefront could reap the benefits of this rising technology.

What is Augmented Reality?

Let’s get down to brass tacks: what is augmented reality, anyway? What does it look like?

In the examples we mentioned above, we discuss Niantic, Inc., a revolutionary AR platform that utilizes geolocation and mapping to give users a unique experience right in their own backyard – literally.

Augmented reality uses existing cameras or images to overlay elements and create an immersive experience. In a game world, it might be an adorable blue monster hopping around in your neighborhood. In the world of e-commerce, it can take the form of placing a virtual piece of furniture in your living room or testing the way a certain lip color looks on your face before you buy.

Many current AR platforms rely on smartphones, tablets, and other mobile devices. In theory, a user gives an app or website access to their phone’s camera, which in turn looks at the surrounding area to detect ground, floors, walls, faces, and more. With this detection software, it can then project and appropriately place 3D rendered objects into the environment, viewable on the user’s screen.

For a quick example, all you have to do is open Instagram and start an Instagram Story. You’ll immediately have access to all kinds of filters that create a range of effects, from applying virtual makeup to objects floating around your room.

The possibilities for e-commerce are endless, regardless of your product. Cosmetics, hair products, clothing, jewelry, furniture, food, décor, electronics… any vertical can benefit.

What is AI (Artificial Intelligence)?

artificial intellegince

When we talk about artificial intelligence in an e-commerce setting, what do we mean?

In this case, we’re not talking about androids or plotting supercomputers. We simply mean any technology that’s able to manage itself without human involvement.

In the automotive industry, this level of automation is known as “Level 5,” or “full automation.” This would be a self-driving car, operating completely on its own without human intervention. There are all sorts of legislative hoops for cars, but in the world of e-commerce, expect something more along the lines of a virtual help desk or programs that can recommend a product based on a customer’s needs.

For the most part, this technology is still out of our reach as a general rule. Many automation programs used in online shopping are good at algorithmic recommendations, but they can’t necessarily answer a nuanced question about which blouse will best accentuate a pear-shaped body. That information still has to be programmed in or augmented by a human being.

The future is coming, however. Companies are investing heavily in this technology (upwards of $15 billion by 2021), so it won’t be long until workable AI is available on a wider scale.

What is the Role of AI in E-Commerce Now?

Currently, AI can be used to enhance your customers’ shopping experience by answering simple questions and recommending items related to their purchase. Many algorithms are currently available through Shopify to enhance your site navigation and predict products that will be most appealing to customers based on what’s already in their cart.

Platforms like EPICA are already being used by major brands like Adidas and Coca-Cola. Their AI engine, called Sophia, uses available data to detect patterns in customer behavior and deliver personalized results. This is one of the AI platforms offered by Shopify.

Every time you’re shopping online and you see a product page that includes a section for “customers who like this product also like…” along with a variety of similar products, you’re witnessing algorithmic AI in action.

You may also witness AI in a simplistic customer support capacity, where an automated system is able to understand basic customer questions and offer answers. This may take the form of a branching FAQ section or even a pop-up letting customers know a representative is ready to chat. While the program itself might not be able to handle lengthy customer interaction, it can notify a representative that someone is waiting for their response.

These are only a few of the ways you can merge AI and e-commerce.

What is Augmented Reality and its Role in Shaping E-Commerce?

What is Augmented Reality? We’re seeing AR technology grow by leaps and bounds in the e-commerce sector and it’s very exciting.

While we’ve already discussed filters, we’ve barely scratched the surface. Social media is rapidly pivoting toward using filters both as ad space for their clients and a creative playground for their users. Both Instagram and Snapchat allow user-created filters on their platform, and many users have taken off with this newfound freedom.

Much of the available content is moody or silly, offering users a specific aesthetic, but advertisers are also very much getting in on the game. Certain ad buys for some platforms are very affordable and a great way to build awareness and create interest in your products.

Major makeup brands, musicians, food and beverage brands, and more have made an impact through branded filters. While branded or promotional filters do not show up in the Effect Gallery for users to find, you can still create them for access on your Instagram page. You can also make creative or social cause filters that don’t necessarily promote your brand but will show up in the Effect Gallery.

Read all about how Instagram AR filters can increase your reach and improve engagement to learn more.

Beyond social, augmented reality branches into mobile applications and many online shops are using AR platforms to give customers a more intimate experience with their brand.

When we think of online shopping, what’s one of the biggest hurdles toward purchase? The fact that a customer doesn’t have a tangible product to examine, touch, or try on. They may not be able to picture the exact dimensions or how it will look in their home. Many customers won’t pull the trigger on an item because they’re just not sure it’s right for them.

Augmented reality completely changes the game here. Using Shopify’s own 3D Warehouse app, you’re able to create 3D rendered versions of your products that any user with an Apple mobile device can view in their chosen environment.

How to Use 3D Warehouse from Shopify

The process for creating your very own augmented reality experience is pretty straightforward. It requires you to sign up and install the app on your Shopify store domain, and from there, you get to work with an expert via the Shopify Partner Program.

After you sign up, you’ll go through several steps to flesh out the app with your products.

  1. Hire a Shopify expert to create 3D models of your products.
  2. Answer any required questions and provide the necessary product photos and dimensions.
  3. Receive the renders from your expert and check them over for accuracy.
  4. Make changes if needed.
  5. Add your approved 3D models to the app.
  6. Update your theme to allow the app to function, then add the AR badge to your product images.

Seems pretty simple, right? Of course, getting the necessary photography and dimensions can be time-consuming, and hiring a Shopify expert does require a service fee. However, the investment is well worth it.

Video by Shopify and Pure Cycles

AR products allow customers the opportunity to really test out your product in a way that was previously unheard of for online sales. This increases the likelihood of a purchase dramatically.

You also have ample opportunities to upsell based on your industry. Do you offer styling services? Have your stylists make recommendations to online customers and give them the ability to “try on” the clothes by using AR. From there, once they like what they see, the stylist can recommend accessories and complementary items, or similar outfits.

The possibilities are endless!

The Future is Now

Our current world and the technology available to online sellers is extraordinary. E-commerce continues to forge its own path and every year its share of overall retail sales grows. In order to stand out in an increasingly competitive marketplace, it’s vital to keep a close eye on emerging trends.

Augmented reality and AI in e-commerce are two of those trends. Offer your customers everything they crave from the brick-and-mortar experience and watch your sales soar.

With the complications facing us in 2020, it’s never been more important to offer customers an excellent online shopping experience. Need help setting up the AR app or creating a one-of-a-kind Shopify experience? We’re happy to offer our services.


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