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How This Augmented Reality Startup Squeezes Conversions Out of Your Smile

If you don’t mind a store associate encouraging you to spring for the dress that’s making you grin from ear to ear, would you object if that experience translated to how you shop online?

That’s the gamble that augmented reality (AR) e-commerce startup NexTech AR is willing to take. After debuting in December an AR e-comm platform that gives shoppers a 3-D look at products before purchasing, it’s been steadily enhancing the offering with a suite of features that aims to elevate the shopping experience. March brought a virtual try-on feature that teased sentiment analysis designed to offer insight into how people feel when interacting with a product.

Now, it’s building on that by incorporating computer vision powered by Microsoft Azure into the tech stack so that brands have deeper actionable insights and more data to better personalize the individual shopping journey.

At its core, the enhanced feature offers real-time sentiment analysis based on a sampling of a shoppers expressions in reaction to trying on a hat, for example, and then fires off a prompt when appropriate. In a sense, any data is good data, in this case. A smiling customer modeling fetching headwear will yield a “looking good!” communique coupled with the “add to cart” button. But any inkling that the consumer doesn’t care for a product means the brand is empowered with greater info about his likes and dislikes and can more effectively tailor post-engagement marketing.

In a brick-and-mortar store, associates have the benefit of multisensory engagement with customers—a crucial facet that’s lost in the one-way observation taking place online. Sometimes a smile isn’t just a smile; a grin could mask a reaction altogether separate from the sheer pleasure of feeling like a million bucks, signaling that the customer feels silly as opposed to sensational in a particular style.

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To develop this enhanced virtual try-on sentiment analysis, NexTech chose to work with Microsoft due to the software firm’s technology capabilities. “The biggest reason we used Microsoft for this launch is because the IBM Watson technology doesn’t run with live video,” NexTech COO Reuben Tozman explained. “In our case, because the person is ‘live streaming’ themselves while ‘trying on’ items, the Microsoft solution was better suited for what we needed.

“Also, while we could have developed a workaround to this limitation, IBM Watson had limited datasets prepared for us to train the AI algorithm, where Azure had existing datasets that we could leverage,” Tozman continued. “Again, there are workarounds but the combination of both factors led us to select Microsoft. For future iterations, we anticipate incorporating both technologies as we have already laid the groundwork to do so.”

In a statement about the tech rollout, NexTech CEO Evan Gappelberg said the enhanced sentiment analysis “closes the loop” on developing a shopping experience that draws on real-time reactions to the products they try-on, yielding important clues about both style and preference.

“With the ability to gauge shoppers’ reaction to an item in real time, we can now mirror the in-store experience online by urging shoppers to make a purchase when we know they’re happy with a product or can recommend a different product when we know they’re dissatisfied,” he said. “It’s a similar effect to the attentiveness of an in-store employee trying to persuade the customer to buy something they are trying on, except now it can be done digitally both at the point of purchase and through retargeting at a later time.”

Any effort toward building out an online shopping journey that more closely mimics its IRL counterpart is a good, and necessary, step—especially as e-commerce maintains its hold over convenience-driven shoppers who want to discover new products on their time and terms. But NexTech’s play is just of one of many that will be contributing to 100 million shoppers relying on AR to power their shopping journeys both in the real world and online by 2020, according to a Gartner survey.

Gartner principal research analyst Hanna Kirki said that in response to growing pressure to rationalize retail brick-and-mortar locations plus consumers questioning the value of these spaces, “retailers are turning to AR and VR to offer customers a unified retail experience inside and outside retail stores.”

The numbers show retailers’ increasing interest in mixed reality technologies. While 46 percent of merchants responding to the survey indicated plans to use AR or VR for customer service by next year, these technologies are also climbing the Gartner Hype Cycle, moving further along between 15 percent and 30 percent.

“Retailers can use AR as an extension of the brand experience to engage customers in immersive environments and drive revenue,” Karki said, describing the technology as “transformative” for retail. She also touched on AR’s capabilities to increase loyalty and foster post-purchase customer satisfaction.

As it’s slowly rolled out nationwide, the next generation of cellular technology, or 5G, will be critical to AR’s full transition into mainstream mass adoption. Sylvain Fabre, senior research director at Gartner, said the firm “expects that the implementation of 5G and AR/VR in stores will transform not only customer engagement but also the entire product management cycle of brands.”