The Future of eCommerce
Eduard: Let us jump right into it. Jaime, you are starting a company introducing Augmented Reality in the eCommerce field. I guess this is a rapidly growing field with currently everyone talking about the Metaverse? Could you maybe tell us what is generally going on in the sector and how it is developing?
Jaime: There is much buzz around the Metaverse and VR and AR. "AR" has already been a buzzword for a while. For a few years now, the investor's perspective has been: “We believe it's going to happen, but we don't know when". I think behind that uncertainty lies the fact that no one has been able to apply AR at a scale on which it creates a meaningful impact. In practice, AR is often merely an add-on to the processes and technologies already out there.
An example is furniture. Right now, if you go to the leading online retailers for furniture, you will have the option to virtually place an object in your living room with AR. However, no one is buying furniture using purely an AR experience. For starters, you must first know what furniture you want and put that idea into words that you can search for. Then, if you find the perfect product, the chances it has a decent AR representation are very low. In a few words, the AR experience is not good enough to entirely base your decision on it. I think that's where we are today across verticals. There are plenty of use cases for which AR makes much sense, but it has been treated only as a fun ad-on; a gimmick if you wish. But the potential to drastically change eCommerce is there. Some players estimate the conversion rate to increase 90 per cent thanks to AR. Moreover, according to research by Google, 66 percent of consumers are interested in AR experiences in their shopping journey online.
Eduard: And how exactly do you want to change the eCommerce field?
Jaime: The opportunity that I see with AR and AI is to make online shopping better across the board. And by "better", I do not mean that we want people to shop more, but quite the opposite. We want people to shop more consciously and use products more efficiently after buying them. Today, online shopping is harmful both for the environment and people.
On one hand, free returns have been the value proposition that made eCommerce take off and challenge offline shopping in the last few years. Consequently, when shopping online, people buy a multitude of items and return the ones that do not fit or that they do not like. All of these products that require a look, feel and fit assessment have a significant burden of greenhouse gas emission associated with the returns - which the MIT Real Estate Innovation Lab estimates to be 25% of total eCommerce GHG emissions. On top of that, we must add the unquantified impact of products that people are not using, such as clothes that are not being worn or go out of fashion, or makeup that gets forgotten and expires in drawers. This kind of waste also has a substantial environmental impact. My mission is to fix that by helping people find products that would suit them without having to try them on physically and hence avoiding returns in the first place.