Augmented reality for ecommerce: the what, why, and how
Arguably one of the most important trends in ecommerce, augmented reality (AR) is going to change the retail landscape for good. Brands like IKEA, Sephora, Warby Parker, Gucci, ASOS, and Amazon have all used AR to make shopping easier and more fun, but now, even smaller businesses are turning to this still relatively novel technology to win customers.
Regardless of the sector your business falls into, chances are, it can probably benefit from AR.
Ever used Google Search to visualise 3D animals, from dogs to tigers to lions, in your home? How about social media lenses that can transform you into a Disney character or turn your hair a different colour? If so, then you already know what augmented reality is — even if you don’t realise it.
Augmented reality, or AR for short, is a technology that augments the real-world environment with computer-generated content, be it visual elements, audio, or other sensory stimuli.
Most AR applications rely on smartphones, but other devices, such as smartglasses and head-mounted displays, can also be used to view AR experiences. This layering of digital experiences within real-world environments is exactly what sets AR apart from virtual reality (VR), a technology that requires a headset and creates a totally synthetic world within it.
Today, finding examples of AR in the real world isn’t difficult, but this wasn’t always the case.
A brief history of AR
Even though the first augmented reality head-mounted 3D display system (which was so clunky it became known as “the sword of Damocles”) was pioneered back in 1968, the term “AR” was not coined until 1990. Even then, it took two more years before the first fully immersive AR system was created — and almost two more decades before someone used AR for commercial purposes (in case you’re wondering: BMW enhanced their printed ads with AR in 2008).
Still, AR was having a hard time gaining traction outside niche markets, and it might have remained a cool, if slightly obscure, technology reserved almost exclusively for geeks and gamers if it hadn’t been for Pokémon Go. The location-based AR game, which had users catching and training virtual Pokémon characters in their own surroundings, can be credited with exposing AR to the masses. The pandemic has further accelerated the adoption of this immersive technology. More than half of people surveyed by Snap and Deloitte Digital admitted that AR has become more important to them since the onset of the pandemic.
The AR market is about to explode
Right now, 73% of people know what AR is when they see it. It is estimated that, by 2025 4.3 billion people will be using AR daily, up from less than half a billion in 2019 and 1.5 billion today. From NASA to the FBI to big brands like IKEA and L’Oréal, everyone seems to find value in AR.
In fact, if expert predictions are to be believed, we are heading into a truly augmented world. According to Deloitte:
“Augmented reality will revolutionise our lives and become as significant of a technology shift as the web or mobile was to society, changing how we view and interact with the world around us.”
Whether this happens in the next few years or decades, the way that we shop, socialise, play, create, entertain, cook, groom, travel, and do sports will eventually change forever. Increasingly, we will be living our lives through this new, spatially enhanced internet.
How can AR help B2C retailers?
Regardless if customers are shopping digitally or at physical stores, AR technology can help brands reimagine their experience.
- Online, companies can use AR to allow customers to virtually inspect and try on products before purchase.
- In-store, brands can use AR to increase engagement through AR games, augment their packaging, or solve other challenges, for example, overcoming a lack of physical space by launching a virtual showroom.
Why augmented reality for ecommerce?
Covid has changed consumer behaviour forever. Two years ago, people overwhelmingly preferred to shop at brick-and-mortar stores. Since the pandemic began, however, many customers have instead switched to buying retail goods online. In 2019, online sales globally amounted to $3.35 trillion, and by 2020, this number had grown to $4.28 trillion. In fact: ‘The Covid-19 pandemic accelerated ecommerce adoption by five years’, says IBM.
Nonetheless, as restrictions everywhere are lifted and things slowly go back to normal, retailers can’t help but wonder: will the upward trend in ecommerce growth continue? Or will consumers ditch online shopping in favour of physical stores? More than likely, the recent explosion of ecommerce is here to stay. As many as 85.9% of U.S. and U.K. consumers say they will maintain or even increase the amount of online shopping they do this year. By 2024, retail ecommerce sales are predicted to amount to a whopping $6.38 trillion.
One downside of increasing consumer propensity towards online shopping is that, overall, customer loyalty has plummeted. With thousands of different ecommerce stores at their fingertips, customers no longer feel tied to just one brand. And while many different factors influence where people shop, AR is definitely one of them. In fact, 61% of customers say they prefer to shop with brands that offer AR. Today, more than 100 million customers use AR to shop for products both online and in brick-and-mortar stores.
Benefits of augmented reality for ecommerce
While there are many benefits of using augmented reality for ecommerce, here are the three main ones.
1. It meets consumer demands
Although many brands still think of AR as a “nice-to-have” feature, customers are of a different mindset. Increasingly, they expect AR to be part of their shopping experience. Almost three-quarters of customers say they would shop more frequently with a brand if it offered AR. And 40% go so far as to say that they would pay more money for a product they could experience in AR.
2. It improves engagement
The experience of buying an item is often just as important as the product purchased. In one study, 55% of respondents said that the interactive nature of AR makes shopping more enjoyable. This explains why 61% of customers spend more time on stores that offer AR and why AR increases customer engagement by as much as 66%.
Indeed, heightened customer engagement through AR can enable a unique form of customer creativity in the buying journey, which can lead to greater anticipated satisfaction of buying decisions.
3. It increases conversion rates
One of the main reasons people like to shop offline is their ability to see the item they want to purchase up close and in detail or even try it on. In contrast, when shopping online, people have no choice but to rely on images, videos, and product descriptions — or at least, that used to be the case.
With advances in AR technology, customers can now preview realistic 3D representations of products in their own homes or on their bodies. Not only does this allow customers to interact with products in a more personalised way, but it can also increase their confidence in product quality. Just over two-thirds of consumers agree that they would “definitely” or “maybe” buy more products if there was a “try-before-you-buy” option.
For brands, AR-enabled try-ons can significantly boost conversions and reduce the likelihood of returns. Research shows that seeing 3D models in AR can increase conversion rates by up to 250%. Similarly, when shoppers visualise items in 3D, retailers see a 40% decrease in returns.
How do I get started with augmented reality for ecommerce?
To get started with AR for an ecommerce store, you will first need to create a 3D catalogue of your products and then deploy this catalogue as an AR experience. Although this may sound like a complex and costly procedure to the uninitiated, adding AR to your store doesn’t have to be time-consuming or expensive — as long as you pick the right partner.
Here at Poplar Studio, we offer retailers an end-to-end solution and a white-labelled AR visualisation unit that can be easily embedded into your website with a single line of code. Ready to get started on your AR journey? Get in touch with us now.