Augmented reality is becoming part of our everyday lives and in e-commerce, consumers are getting used to interacting with brands more intimately.
You may not realize it, but AR is already firmly integrated into society, whether it be through social media image filters or interactive video games such as Pokemon Go.
In fact, according to Shopify, by 2025, nearly 75% of the global population and almost all smartphone users will be frequent AR users.
So, it goes without saying that brands want to take advantage of this trend.
Key takeaways:
- Product sampling is different with AR and has sparked a change in customer behavior
- Why visualizing and customizing products are key to customer confidence and sales
- AR's impact on spontaneous sales is clear according to research, which says 72% of people make an unplanned purchase because of the technology
Introduction
Before we start
Whether you’re selling lipstick or garden furniture, there is likely an augmented reality application available to help your company’s e-commerce strategy. But while AR technology is becoming more readily available, it doesn’t mean that you should use it without a proper strategy. This should be your first thought.
Customer expectation versus reality
In a perfect world, money would not be an issue and businesses could take complete advantage of the benefits of augmented reality for products online.
But of course, this is not a perfect world – companies have tight budgets and time constraints. Brands have to properly justify the use of technology and its impact on their bottom line.
Just because customers expect or demand it doesn’t mean that it should be delivered without a plan. Therefore, the use of AR must be worthwhile to your business, such as through an increase in engagement and/or sales.
Getting AR right for your brand
The good thing is, using augmented reality for products correctly and with your budget in mind can be a game changer, affecting customer engagement, behavior, and all-important sales.
According to Shopify internal data, merchants who add 3D content to their stores see a 94% conversion lift, on average
You don’t have to compete against the likes of the Ikea Place app to hit the right notes with your client base. The furniture company’s use of AR to allow customers to virtually place furniture in their homes is impressive, but developing personalized in-house technology is not realistic for small and medium-sized businesses.
Most will have to look to outside companies to help them with this, which is much more cost effective.
Product sampling behavior is different with AR
Unlike VR, which puts the user in a virtual world away from their own, AR brings virtual items to their reality. With that in mind, a natural setting is how shoppers engage with the technology.
AR and the beauty industry
Just as with Snapchat filters, which place a cartoon dog face on the user’s, the beauty industry can use AR similarly to allow customers to modify their appearance.
From adding different lipstick colors to see which they suit best to changing their whole hairstyle before committing to the chop, shoppers are encouraged to try multiple colors and styles – even those that are less popular and wouldn’t normally get a second look (think blue lipstick).
AR and the health industry
Another industry that is taking advantage of this kind of AR is health – opticians, for example, can display their frames online and those who need to wear glasses can ‘try on’ different frames and lens shades. That is, they can put the item directly onto their face to see which suits them best, using just their mobile phone.
How AR transformed a home furniture brand
It’s not just Ikea that is taking the home furniture industry to the next level with 3D and AR technology. Small and medium-sized businesses can also achieve this without going over budget.
Pepe Garden, a brand that designs and manufactures an exclusive range of quality wooden garden furniture, is using augmented reality for products on their website. Owner John Watkins was delighted with the results.
“I can't believe we can do this; this is a game changer.” – John Watkins, owner of Pepe Garden
A Pepe Garden model displayed in the Enhance AR viewer. Click see in your space to bring it into AR. Buy here.
Customers can also see their desired product in their space at home, meaning that they can ditch the tape measure and feel less anxious about committing to a purchase.
A change in customer behavior
This exploration of trying on colors and styles that they would not normally do in physical stores is an important shift in behavior that can lead to impulse buys (blue lipstick, anyone?).
According to a study by Interactions Consumer Experience Marketing, 72% of shoppers that used AR in their shopping journey said they purchased stuff they didn’t plan to buy, simply because of the experience of using AR.
AR increases revenue
Visualizing and customizing products are key
Everyone has likely experienced purchase anxiety at some point in their lives when buying online. Especially with products that are difficult to visualize without first trying them on or seeing them in the space they are to occupy.
According to Global Newswire, 60% of online shoppers say they’re more likely to buy a product if it is shown in 3D or augmented reality (AR)
The great thing about AR is that it allows you to ‘try before you buy’ without leaving your home. All you need is a mobile phone. Shoppers can be comforted by 3D visualization of an augmented reality product and toggle between colors and styles so that they know for sure they have made the right decision.
Target customers and demographics
Additionally, AR makes customers spend more time browsing and viewing more products than those who did not.
An article in Time stated that AR is “the future of online shopping”. It quoted a study from consulting firm Accenture, which “predicted that the social commerce industry will grow three times faster than traditional e-commerce over the next three years.”
The key drivers for e-commerce growth are Gen Z and Millennial social media users, with “the two demographics accounting for 62% of global social commerce spending by 2025.” Knowing your demographic is important when deciding how to use AR effectively.
AR's impact differs across customers and brands
Something important to remember
Of course, AR is not the magic tool that will entice all customers to make a purchase every time they visit your website. Its impact is different depending on several factors, such as the brand and the individual customer.
As previously stated, you must create a clear strategy for how AR will help both your brand’s identity and your customers’ experience. Ask yourself what you hope to achieve from adding the technology to your website – such as engagement, sales, happier customers, and fewer returns. Once you know what you want to achieve, you will be able to put your AR plan into action.
More unplanned purchases
While there are no sales guarantees, it is clear that the chances of a purchase being made are higher. In addition, AR has a stronger influence on customers who have never purchased from a brand before.
According to an article about AR in retail by Jaydevs, 72% of people had made an unplanned purchase because of AR. Additionally, Shopify recorded a 40% drop in returns thanks to AR and 3D visualization.
Brand success story – ByLogstrup
Denmark’s biggest outdoor kitchen company ByLogstrup outsold established market leaders by 400% in the very first year of trading thanks to their use of AR on their website.
"What’s even better, we are hitting a varied market. A tennis club with a terrace, a building project in Copenhagen, a sports academy in Denmark – they all want it.” – Henrik Midtgård Hansen, ByLogstrup.
Owners Henrik Midtgård Hansen and Dan Christensen came up with the idea after a house move sparked the inspiration for stylish outdoor furniture.
It has become such a success that they are 600% over the sales from last year in January 2023.
A ByLogstrup outdoor kitchen seen in the Enhance AR viewer. Click 'see in your space' to bring it into AR. Buy here.
