Nextech AR tries to tackle retail's billion-dollar problem
Nextech AR has amassed several tools (by way of acquisitions) that will help it address the retail industry's billion-dollar problem — returns.
Why it matters: Returned items cost retailers hundreds of billions of dollars a year and augmented reality and 3D modeling can help mitigate that, Nextech AR founder and CEO Evan Gappelberg tells Axios.
State of play: Founded in 2018, Nextech AR, which has an AR platform and creates 3D product visualizations and human holograms, has made 10 acquisitions in its short lifespan, Gappelberg says, including two transformative ones in the past year.
- It acquired U.K.-based spatial mapping platform ARWAY for about $1 million in an all-stock deal in August.
- It also nabbed Threedy.ai, which increases the production of 3D models by the thousands per week, in June, in a roughly $9.5 million all-stock deal.
Context: Roughly 17% of total U.S. retail sales are returned, translating to roughly $761 billion in merchandise sold last year, according to a report by the National Retail Federation and Appriss Retail.
- The return rate is higher for products purchased online. About 21% of online purchases are returned, the report finds.
Of note: The use of 3D modeling and AR technology has been found to decrease return rates by 40% and increase conversion rates by as much as 94%.
Details: “People feel more confident pushing the buy button after they've seen a product in 3D or AR,” Gappelberg says. It encourages more sales and less abandoned carts, he says.
What’s next: The company rolled out an AR mapping tool last week that allows anyone to spatially map spaces, such as sports stadiums or retail stores, in a matter of minutes, as well as to add interactive 3D objects and more in the metaverse.
- "We’ve been very opportunistic," Gappelberg says about the company’s dealmaking, though he adds that he feels "pretty locked in with our tech” at the moment.