XPO Logistics uses ‘augmented reality’ to shrink final-mile returns

Today, 3PL company XPO Logistics said it plans to implement an “augmented reality” feature into its existing “Ship XPO” e-commerce platform for final-mile delivery, which will allow shoppers to use their smartphones to visualize big-ticket items, like sofas, beds and appliances, in their own homes, before purchase.

Augmented reality technology has been popularized in the entertainment industry in recent years, with app-based games like “Pokémon GO,” which creates an interactive experience of the user’s real-world environment. Companies such as American Apparel, IBM and Ikea have all employed the technology in their own user-focused ventures.

One of the major hurdles logistics companies face in the attempt to harness the influx in demand for e-commerce services are the inflated costs associated with consumers’ expectations of “free-and-fast” shipping, as well as “free return” services, made common by retail giants like Alibaba and Amazon. Because shipping costs are no longer bourne by the consumer, these free returns can take a chunk right out of the bottom line of transportation companies.

Troy Cooper, president of XPO Logistics thinks that augmented reality could help to curb these return-shipping costs. “Augmented reality is another innovation that our retail and e-commerce customers can offer to consumers, providing more control over the shopping experience,” he said, “decreasing the likelihood of returns.” Cooper added that the technology “enhances the efficiency of the entire last-mile process, reducing time inside the home and the risk of product damage.”

XPO has had an eventful year, reporting an impressive 325 percent increase in net income in Q1 2018 from the same period last year – a contrast caused mostly by XPO’s investment in its trucking sector, launching an e-commerce distribution platform for its trucking and last-mile services. Congruently, the company has expanded its last-mile network to a total of 85 hubs in the Unites States and five new last-mile operations in European locations.

While intriguing from an innovation standpoint, it remains to be seen whether this tantalizing technology will actually enhance logistics companies’ bottom lines.