The way we live, work, and shop has changed radically in recent years. For consumers it’s a boomtime, as immersive technology like augmented reality (AR) brings ever more convenience and immediacy to commerce. It’s a shift that is prompting executives and leaders across industries to explore how AR is used in business to elevate customer journeys, boost purchase confidence and unlock new operational capabilities.
Rapid advances in immersive technologies like 3D and AR, and their increased adoption by consumers, are changing buyer expectations and habits and forcing businesses to rethink operations from product design to marketing..
From Snapchat filters to Pokemon Go, consumers already interact with AR on a regular basis – and not only in the entertainment sphere. 3D and AR is disrupting sectors from manufacturing to education, and revolutionizing ecommerce – changing how consumers expect to interact with brands while influencing purchasing decisions, improving conversion rates, and providing a wealth of new data insights for companies to utilize. Understanding how AR is used in business is key to leveraging one of the defining forces reshaping the dynamics of sales and customer engagement.
What is augmented reality?
AR technology superimposes digital information onto the users’ physical environment, enhancing or augmenting their perception of the world around them. Most commonly this involves rendering images onto the users’ surroundings via their smart device – but this digital content can include additional elements such as audio and GPS.
When it comes to how AR is used in business, applications vary widely by sector. In healthcare, AR allows surgeons to practice difficult or dangerous procedures before entering the operating theatre, while in architecture and design, AR can help professionals visualize the final product during the creative process, allowing them to step inside their room or building and even make virtual changes on the spot.
From logistics to advertising, brands are pioneering new ways of working using AR, so it’s no surprise 75% of business leaders now expect to integrate AR and associated immersive technologies into their operations.
How AR is used in business: focus on ecommerce
While the use of AR is diverse and widespread, ecommerce is one of the business sectors where its benefits are being most acutely exploited. Consumers can try on jewelry, clothing and sunglasses, just by looking at their smartphones, and visualize a potential new sofa or TV in their living room, to check for style, color, and fit, without ever leaving home.
Click 'See in your space' to try an augmented reality experience now
The pandemic accelerated the use of augmented reality, but its increasing adoption was already well underway. In a 2019 Nielsen global survey, consumers listed augmented and virtual reality as the top technologies they were seeking to assist them in their daily lives, with 51% saying they were willing to use AR/VR to assess products. Given that IBM estimates the pandemic has accelerated the shift to digital shopping by roughly five years, it’s easy to see why the Harvard Business Review concludes, “Once a nice-to-have feature, AR has quickly become an essential technology for retailers.”
Consumer behavior and AR
The value of global ecommerce sales reached an estimated US$5.8 trillion in 2023, representing around 20% of all retail sales worldwide. For businesses fighting for a share of this lucrative market, where should AR fit into their ecommerce strategy? The answer, as far as consumers are concerned, is right at the heart of it.
Facebook IQ’s report found that 78% of people surveyed said AR is a fun way to interact with brands, while 74% said AR can bridge the gap between the online and offline worlds. Given consumers' evident appetite for the technology, it is perhaps no surprise that numerous case studies show an increase in customer engagement with products where AR visualization is offered – one of the key examples of how AR is used in business.
Most tellingly, research suggests AR is no longer an optional extra. 75% of consumers surveyed said they now expect an AR experience when shopping online, with 61% preferring to make purchases on sites that offer AR functionality. With retailers reporting instances of conversion rates doubling or even tripling for products where AR is used, it becomes strikingly clear that those not investing to meet consumers’ expectations risk being left behind.
How AR is used in business: success stories
A host of well-known brands have achieved significant benefits by integrating 3D and AR technology:
- Home Depot reported that its product visualization feature boosted conversion rates by a factor of 2x - 3x compared to customers who did not use the technology.
- US retail giant Macy’s reported return rates dropped to <2% for furniture purchases made using its AR/VR visualization feature (compared to the 5-7% industry average).
- Samsonite-owned eBags reported a 112% increase in mobile conversions, and 81% on desktop, when consumers interacted with 3D and AR-enabled products, boosting revenue per visit by 87%.
Looking to the future of immersive technology investments
The global AR and VR market is projected to reach US$62 billion by 2029, growing at 9% per year. The major players in Silicon Valley have all significantly expanded their investments in AR, with Google already incorporating AR in its search results, and Meta and Apple releasing headsets that take immersive experiences to the next level – both of which have been a major focus of the two technology giants’ marketing efforts in 2024.
Businesses that have invested in 3D, AR and associated technologies have enjoyed tangible results, with one leading British retailer reporting a striking 22x ROI on its immersive tech rollout. Meanwhile consumer demand for the technology only continues to grow, fueled by its ubiquity, convenience, and ability to provide improved customer journeys.
Facebook asserts that, “[there is] the possibility we are standing on the cusp of AR and VR as the next computing platform,” and the implications of that will affect every facet of the internet going forward.
How AR is used in business continues to change and evolve. With an explosion of use cases and new developments in both software and interfaces, any digital interaction that currently takes place in 2D through conventional hardware will one day soon take place in the AR realm. With the impetus to invest in AR coming from both their competitors and their customers, businesses that fail to adapt will inevitably lose out in these competitive markets.
