Questions that retailers need to make about augmented reality |The financial

Después del éxito viral de Pokémon Go en 2016, hordas de minoristas han abrazado la tecnología de realidad aumentada (RA).

The search for treasures, offered by Nintendo via cell phone, was the first great showcase of the innovative mixture of the real world and computer generated images.Now, the retail sector is using RA to sell products as diverse as furniture, cosmetics and fashion.

Executives like the way in which RA can help online purchases feel so well or even better than buying in person.For example, Sephora's app lets consumers use the cameras on their phone to "tissue" makeup virtually.Retail leaders also consider that the RA will make their physical stores more attractive and their sellers become more productive.

However, RA is not a great investment for all retailers.Executives must make painful decisions among a multitude of investment options, and have reasons to see with suspected bright devices.Betting on things like 3D televisions, automated boxes and facial recognition software have tested their patience.These innovations may not lack value, but they certainly are worth less than what the technological dreamers once imagined.

Blippar's recent collapse and relaunching, a prominent Ra European startup, who created RA apps for retail and consumer goods such as Covent Garden, and McDonald's, adds to the concerns that, despite all its promises,RA could have difficulty getting generalized.Forrester recently reported that in 2018 the new risk capital to finance RA reached $ 1.690 million, less than half of the $ 3.580 million collected in 2017.

So how should the retailers determine in the appropriate role of the RA in their business?Answering four questions that could apply to almost any decision about technology.

Conventional wisdom says that those who buy clothing want fashion advice, top -level service and a good atmosphere, but we observe that Amazon and discount stores like T.J.Maxx gain market share with lower prices and stores where people travel merchandise batteries in search of hidden treasures.

When retailers make or buy app apps, they can cost between $ 300.000 and $ 30 million, just for development costs.Are consumers willing to pay them, or prefer to have lower prices?The response depends on whether its objective consumers aggressively adopt technology, if the app improves its brand and if the purchase and use of its product is complex enough to justify the use of RA.

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Furniture apps such as Ikea Place use to relieve a notorious cause of pain for buyers, the difficulty of predicting how a sofa, bed or table will see when someone takes it home.Will it enter the available space?Will you look good together with the current furniture, floors and walls?That is a perfect problem to solve the RA.Consumers suffer when they buy incorrect furniture online;They could wait weeks for delivery, just to deal with the stress of returning those hindered products.The value of the RA for the consumer is high compared to the cost of innovation.

In addition to its value for consumers, RA can be useful in education and training simulations, helping representatives in the field to perform maintenance and repairs, and testing complex store designs and user experiences.

Many times these uses are more profitable than apps for consumers, and are the right place to start building racbilities.For example, orders from a Dutch warehouse operator for electronic commerce worked 15% faster when they were equipped with Google Glass;The orders were presented directly to the lenses enabled for RA, accelerating a process that used to be based on collecting printed documents.Start with the most profitable applications and then move to the most complicated.

Even if the numbers are incorrect, it is worth defining how a technology such as the profits are expected to improve.Should sales improve?Should costs reduce?Should you reduce inventory levels or capital expenses?

Limit intangible benefits.Not only "imagine public relations power," quantify the improvement in marketing expenses.With this kind of hand estimates, it is much easier.

And don't forget to find creative financing sources.Technology sellers are usually willing to subsidize RA projects for learning and advertising reasons.Merchandise vendors could be willing to pay so that their products are included in apps.

Let's face it: the technology systems of most retailers are disastrous.As a result, the bottlenecks of almost all the important innovations they need to succeed are turned.However, the number of projects that are placed on this squeaky structure is growing rapidly.Therefore the biggest question is how to prioritize and integrate the ra among its technological slopes.

Considering the limitations of budget and contracting of technology experts, the results are usually disastrous when executives add projects to this listening list.Delays are replicated between earrings.Meanwhile, so much, the needs of consumers evolve, and more agile competitors take advantage making many of the stuck projects become obsolete.

Retail executives do not see technology projects stacking, as they can observe the accumulated inventory in wineries and warehouses, but these projects are as expensive and perishable as physical inventories.Retailers need to stop initiating innovation projects and starting to finish them.

Agile methods usually sequence technology projects according to their delay cost.In other words, how much would it cost to delay this project for a month?These costs can be a life or death issue for key technological projects, such as electronic commerce websites and apps, purchase integration online, advanced analysis and improvements in Call Center.

What are the costs of delaying a RA project?Let's say we have not seen any retailer die because his RA project was delayed a year.Nor have we seen that retailers in difficulties binque leadership based on their ras.

As a tool, the RA will surely become more powerful.Help that thousands of people will always have a device enabled for RA in their bags or pockets.However, the appropriate role for this will vary significantly depending on the sector and the health of the central technologies of each retailer.Therefore, although the RA should be on the list of innovations to try many retailers, it should not delay more important technological projects that will determine if these companies follow the Amazon path.as of toys r us.

Darrell k. Rigby, Mikey Vu y Asit Goel son socios en Bain & Company.