Why Augmented Reality is the Future of eCommerce
Augmented reality (AR), which first entered our lives through games and fun Snapchat filters, is now shaping the future of eCommerce. Recent advancements in AR, along with key partnerships between developers and major brands, have shown that the future of this technology is extremely promising.
The COVID-19 pandemic accelerated the growth of AR, particularly in eCommerce, bringing its impact into our daily lives much sooner than experts had predicted. According to PwC’s Seeing Is Believing 2019 report, AR and VR together contributed $46.4 billion to the global GDP, with projections suggesting that by 2030, these technologies could boost GDP by up to $1.5 trillion globally.
These figures indicate that AR and VR are set to become indispensable parts of our lives, offering richer benefits and an improved user experience as technology evolves. As Allan Cook, Deloitte Digital Reality Business Leader, notes, “As AR evolves, it will revolutionize our lives and will become as significant of a technology shift as the web or mobile, changing how we view and interact with the world around us.”
Many industries stand to benefit from AR, but online retail is one of the first to effectively adapt to AR innovations. Key ways that eCommerce businesses are incorporating AR include:
Virtual try-on solutions
Social media filters on platforms like Snapchat and Instagram
Product preview placement for better visual understanding
Interactive user manuals
These AR applications are driving transformation in online retail, improving customer experience, and helping brands stand out.
Key Insights
AR is Revolutionizing eCommerce: Augmented reality (AR) is transforming how consumers shop online by offering interactive and immersive experiences. Through virtual try-ons and product previews, AR bridges the gap between online and in-store shopping, providing customers with a more confident buying experience.
AR is Driving Growth in Retail: According to PwC, AR and VR combined are expected to boost global GDP by up to $1.5 trillion by 2030. In eCommerce, AR is helping retailers reduce return rates, increase customer satisfaction, and offer personalized shopping experiences, which ultimately drive higher sales and conversions.
AR's Impact on Customer Behavior: Studies show that interacting with products through AR experiences leads to a 94% higher conversion rate. AR allows customers to visualize products in their environment, making it easier for them to assess quality and suitability before purchasing, leading to more informed decisions and fewer returns.
AR’s Growing Integration with Social Media: Social media platforms like Snapchat have embraced AR to offer virtual try-ons, product recommendations, and in-app purchases. This integration allows brands to create a seamless shopping experience, combining entertainment, engagement, and convenience in one place.
After-Sales Benefits with AR: Beyond the purchase stage, AR is also enhancing customer service with features like interactive user manuals and assembly guides. Brands like IKEA and Mercedes use AR-powered tools to provide step-by-step instructions for product setup and maintenance, further improving the customer experience.
Take Out Your Phone and Try It On
When it comes to how to implement AR in a business, the answer is clear: The sky's the limit!
From makeup to furniture, anything we used to purchase online without trying, and only trusting our gut feeling is about to be history, thanks to AR. Pioneers of beauty retailers such as Sephora and Ulta are turning to AR to help customers digitally test out hundreds of beauty products with thousands of shades to assist in buying decisions.
According to Barclaycard Research, 30% of shoppers deliberately overpurchase and subsequently return unwanted items, while 19% admit to ordering multiple versions of the same item so they could make their minds up when products are delivered and tried out.
These results show that for retailers like Sephora where customers demand to “try and buy," AR becomes a crucial bridge between the customer and the products whilst helping the retailer reduce their return rates and eventually eliminate plenty of costs.
Luxury brands are supporters of AR virtual try-on technology too. Gucci, one of the most prestigious fashion houses, sponsored Snapchat in June 2020 and adopted its lenses to allow customers to test how its sneakers look on their feet.
Consumers can try on Gucci’s Rhyton, Tennis 1977, and Screener shoes, and the ever-popular Gucci Ace. This provides an unparalleled online user experience as it enables customers to engage and familiarize themselves with the product and purchase it more confidently despite the restrictions caused by the COVID-19 pandemic.
Studies also show that interacting with products that have AR experiences leads to a 94% higher conversion rate, as individuals can better assess them and feel connected with brands.
How Augmented Reality is Impacting eCommerce
Here are all the ways AR technology is making an impact on eCommerce:
Use Social Media to Interact with AR
Probably nobody can argue the way social media influences our daily routines, preferences, and behaviors, and Snapchat is using its powerful position to drive the change in AR shopping.
Snapchat Lenses now allow businesses to offer users real-time product and pricing updates, in addition to augmented reality try-on technology, and the ability to make purchases without leaving the Snapchat app. User experience is quite unique in terms of how many components of shopping can be completed all in one:
Search through different products, try on the one you like, and check out! It is an incredibly huge opportunity for shoppers as it eliminates many of the in-store shopping’s difficulties. This is also awesome for the brands because, with the help of AR lenses for shopping, they can achieve a marketing channel within a sales channel. What could be more thrilling than that?
“It’s a complete reframing of consumer intent and the marketing funnel — driven by impulse, driven by the moment, driven by creative inspiration; media becomes the store.”
Salima Popatia, Senior Vice President, Global Consumer Acquisition and Retention at Estee Lauder Companies (ELC)
Lower Product Returns with Previews
The sky’s the limit when it comes to how to implement AR in a business, and IKEA is another brand that takes user experience to the next level using AR. In 2017, IKEA partnered with Apple, and using Apple’s ARKit , they launched the IKEA Place app.
The IKEA Place app enabled the users to place the selected furniture anywhere in their surroundings and have an idea of how that product might look in reality. Although being very popular at that time, now this feature is no big surprise to existing AR users anymore.
However, the super exciting news is coming now: In April 2021, in collaboration with SPACE10, an innovation lab by IKEA-IKEA Studio App was launched. Moving on from just adding virtual chairs and lamps to a room, SPACE10 says the goal here for IKEA is to help people design entire rooms using the LiDAR sensors in an iPhone.
IKEA Studio allows users to capture detailed 3D room plans, complete with measurements, windows, and doorways. It even detects existing furniture and marks their locations with white boxes, helping you visualize your current setup.
The app also includes interactive features, such as turning AR lamps on and off or stacking items, like placing a lamp on a sideboard. Developers have hinted that more advanced features are coming, including machine learning capabilities that can suggest wall paint colors based on the selected furniture, further enhancing the user experience.
This is significant because, according to the Snapchat 2021 report, 56% of shoppers feel more confident about product quality when using AR, and over half want to use AR to assess products before buying. IKEA Studio offers exactly that—a risk-free "try before you buy" experience, giving customers a more confident and informed decision-making process.
Also, nearly 3 in 4 customers say they’re willing to pay more for a product that promises the total transparency AR can provide, which the IKEA Studio app seems to fully provide the transparency customers are looking for.
How AR Benefits eCommerce Store After the Sale
Up to now, we have mostly talked about the AR experience before making a purchase. However, AR tools are also available for after-purchase services such as user manuals for unboxing and installation and once again, IKEA is ready to help its customers with its AssembleAR app.
This is an AR app that provides real-time instructions to follow along while assembling a new IKEA product. It utilizes the original diagrams and layouts of the paper IKEA manual but overlays them with animation and life-size references that simulate and clarify the self-assembly process.
This is a great innovation for those (probably many of us) who find the whole self-assembly process complicated and puzzling.
Mercedes is one of the companies preferring AR manuals. With the help of the “Ask Mercedes” app, the owner can click on the pop-up buttons on the screen when directed to the specific parts of the interior of the car such as the wheel or the control panel.
Clicking on any of these informative indicators enables the drivers to learn the functionalities of the most basic buttons to gain much more insight about their cars, and learn critical tips on how to upkeep the car’s performance through how-to videos or other digital content.
Today, AR is revolutionizing many industries, including eCommerce, and its impact is set to grow even further in the future. It is redefining how businesses and consumers interact with products. There’s much more to come, and we’ll continue sharing the latest updates to help you stay informed.
The Bottom Line
It’s never too late to jump on the AR commerce trend. At artlabs, we provide the world’s simplest 3D and augmented reality solutions for businesses. Contact our team of professionals to learn how we can help you elevate your customers’ online shopping experience.
FAQs
How is augmented reality changing the eCommerce landscape?
AR is transforming eCommerce by allowing customers to virtually try on products, preview items in their space, and interact with products in 3D. This immersive experience helps customers make more informed decisions and reduces the need for returns.
Which industries benefit most from AR in eCommerce?
AR is particularly beneficial for industries like fashion, beauty, furniture, and automotive. Brands like Sephora and Gucci use AR for virtual try-ons, while companies like IKEA use it for furniture visualization in customer homes.
How does AR help reduce product returns in online shopping?
By allowing customers to virtually interact with products, AR helps them understand how an item will look or fit before making a purchase. This reduces uncertainty, improves confidence, and significantly lowers the rate of product returns.
What role does AR play in social media shopping?
AR is becoming a major tool in social media platforms like Snapchat, allowing users to try on products, receive real-time product updates, and make purchases directly through the app. This integration makes shopping more engaging and convenient for users.
Can AR enhance the post-purchase experience?
Yes, AR enhances the post-purchase experience by offering interactive user manuals and assembly guides. Brands like IKEA use AR to provide step-by-step instructions, making product setup easier and more intuitive for customers.
