The Augmented Reality Sales Channel (ARSC) is a client/server application to allow consumers to view items (eg. TV’s, furniture, electricals) superimposed on a live camera feed of the rooms of their  house (eg.lounge room, kitchen, dining room) from their smartphone or tablet. While such augmented reality applications are not new, the Smart Services prototype incorporates a server component, that allows a retail sales assistant to talk to and interact with the consumer. The sales assistant appears as an avatar that is rendered alongside the virtual goods.

ARSC is initially targeted at retail sales (particularly large, bulky goods), however there is the potential to change the model of online selling across a range of industries.

What problem does ARSC solve?

The Australian retail sector is currently experiencing a prolonged period of contracted consumer spending. The reduced spending is commonly attributed to two trends:

1. Consumers are reducing their reliance on household debt to finance retail spending; and
2. Consumer spending is moving to “services expenditure” at the expense of retail goods expenditure.

The tighter consumer spending, together with the tendency of online shopping to commoditise products is proving beneficial for retailers able to compete on price. Unfortunately Australia’s big-name retailers have structural and other issues that make it difficult to compete directly on price alone. They need a way to bundle multiple products and services to add value for the consumer without reducing overall margin on goods sold.

Recently, the emergence of high end processing capabilities on mobile devices has created the opportunity to use more immersive environments such as Augmented Reality (AR) to allow the customer to view and interact with convincing representations of physical products in their own home. This allows the customer to examine the product from any angle whilst judging if the product complements the interior décor of their home.

The addition of a Virtual Sales Assistant into this environment can provide opportunities for the retailer to negotiate an optimum deal with the consumer. The ARSC allows retailers to emphasise value added services, provides cross-sell and up-sell opportunities for retailers, and allows consumers to spend with confidence on bulky and complex products (eg home theatre systems).

Value Proposition for Customers

ARSC is an online sales application that helps retailers address two major shortcomings associated with traditional online retailing:

1. The user cannot assess the spatial qualities of the goods they wish to purchase. This can result in a high rate of returns for some retailers.
2. Online retailing does a poor job of facilitating cross or up selling of products; or of bundling products and services. Most online retailers do not have the opportunity to communicate directly with the purchaser during the crucial decision making process, and thus are not able to: demonstrate the features of the product; identify additional complementary products; negotiate on price; or offer additional retail services (insurance, applying for finance, etc).

Increase your online sales opportunity by:

• Reducing the rate of returns for products bought in-store and online.
• Allowing sales of objects typically not purchased online because of the difficulty of spatial assessment, e.g. lounge suites, dining settings.
• Allowing bundling of products and services so that low-margin goods are complemented with higher-margin goods and services.
• Avoiding commoditisation of retail products by making it difficult to compare directly on price, since the value-added services are clearly assessable by the customer.