The current state and benefits of Augmented Reality in retail eCommerce

Augmented Reality (AR) is revolutionizing the retail eCommerce landscape, offering innovative ways for consumers to interact with products and make informed purchasing decisions. As the digital shopping experience continues to evolve, AR is becoming an essential tool for retailers looking to enhance customer engagement and drive sales. In this first article of a two-part article series, we will dive into the current state of Augmented Reality and its benefits. 

The current state of AR in retail eCommerce 

AR technology has made significant strides in recent years, with its adoption in retail eCommerce growing rapidly. According to eMarketer, the number of AR users in North America is expected to surpass 100 million by 2025. This surge in AR usage is driven by the technology's ability to bridge the gap between physical and digital shopping experiences, providing consumers with a more immersive and interactive way to shop online. Major retailers are already leveraging AR to enhance their eCommerce platforms. For instance, Sephora's Virtual Artist app allows customers to try on makeup virtually, while IKEA's IKEA Place app enables users to visualize furniture in their homes before making a purchase. These applications not only boost buyer confidence but also significantly reduce return rates, as customers can see how products will look and fit in their real-world environments. 

Benefits of AR for retailers and consumers 

There are many benefits of AR in retail eCommerce, impacting both retailers and consumers positively. Here are some key advantages:

• Enhanced shopping experience: AR provides a unique and engaging shopping experience by allowing customers to visualize products in their environment. This interactive approach helps customers make more informed decisions, leading to higher satisfaction and reduced return rates. For example, a study by Deloitte found that 66% of consumers are more confident about their purchases when using AR features. This increased confidence often translates to higher conversion rates and lower return rates for e-commerce businesses.

• Increased sales and conversion rates: AR has been shown to boost sales and conversion rates. According to a study by XR Today, 57% of customers are more likely to purchase from a brand using AR. By offering virtual try-ons and 3D product visualization, retailers can increase customer confidence and encourage more purchases.

• Reduced return rates: One of the significant challenges in eCommerce is the high rate of product returns. AR helps mitigate this issue by allowing customers to see how products will look and fit before buying. For instance, Tissot uses AR technology in its window displays, allowing consumers to try on a 3D model of the brand’s watches, resulting in an 85% increase in sales in one of its branches.

• Improved Customer Engagement and Loyalty: AR enhances customer engagement by providing an immersive and interactive shopping experience. This increased engagement can lead to higher customer loyalty and repeat purchases. A Google study found that 72% of consumers are more likely to stick with brands that offer personalized experiences. AR enables retailers to deliver these personalized experiences, hence fostering stronger customer relationships.

• Cost Savings on Physical Stores: AR can also help retailers save on costs associated with physical stores. By offering virtual try-ons and interactive product displays, retailers can reduce the need for large physical inventories and showroom spaces. This is particularly beneficial for smaller retailers looking to expand their reach without significant overhead costs.

Professional advice for implementing AR in retail eCommerce 

For retailers looking to implement AR technology, here are some professional tips to ensure a successful integration: 

• Invest in high-quality AR solutions: Choose reliable and high-quality AR solutions that provide a seamless and realistic experience for customers. Partnering with reputable AR technology providers can help ensure the best results. 

• Focus on user experience: Prioritize the user experience by making AR features easy to use and accessible. Ensure that the AR applications are intuitive and provide clear instructions for customers.

• Promote AR features: Actively promote your AR features through marketing campaigns and social media. Educate customers on how to use AR to enhance their shopping experience and highlight the benefits. 

• Gather customer feedback: Continuously gather feedback from customers to improve AR features. Use this feedback to make necessary adjustments and enhancements to the AR experience. 

• Stay updated with AR trends: Keep up with the latest trends and advancements in AR technology. Staying informed about new developments can help retailers stay ahead of the competition and offer cutting-edge AR experiences. 

AR is transforming the retail eCommerce market by providing immersive and interactive shopping experiences. Retailers who invest in AR technology are better positioned to meet evolving customer expectations and stay competitive in the market. By enhancing the shopping experience, increasing sales, reducing return rates, and improving customer engagement, AR offers significant benefits for both retailers and consumers. As AR technology continues to advance, its impact on the retail eCommerce landscape will only grow, making it an essential tool for the future of online shopping.  

This concludes the first part of this two-part article series about Augmented Reality. While this article was focused on the current state and benefits related to AR in the eCommerce world, the second part will mainly explore the future trends related to AR, its challenges and some case studies of real-life AR implementations.  

This article was written by Charles Davidson-Parent, Digital Business Analyst at Thinkmax. His role at Thinkmax is to collaborate with customers to design, advise and communicate an eCommerce strategy that will allow them to perform a successful digital transformation. Charles has contributed to many Optimizely implementation projects in both B2C and B2B environments. When Charles isn’t helping businesses through their digital transformation journeys, he loves to play and watch sports, spend time with his loved ones and has an acute interest in any kind of puzzle.

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