The use of augmented and virtual reality in online trading. Advantages and disadvantages of technology. 9 strategies for implementing AR and VR. Using AR and VR in E-commerce
Augmented reality, or AR (from the English augmented reality ) is a layer of digital information that is displayed on a tablet or smartphone over the objects of the physical world. The purpose of augmented reality is to change and expand the environment with the help of digital data.
Virtual reality, or VR (from the English virtual reality ) is a digital space accessible using a virtual reality helmet. The technology provides a physical and psychological experience of immersion in an interactive, artificially generated 3D space.
Both technologies are actively used in e-commerce, but AR solutions are more common: they are easier to develop and do not require special technical equipment. Virtual reality is usually used in showrooms, shopping centers, and other offline sites where it is possible to place a VR space with special helmets.
Let’s consider why augmented and virtual reality technologies have become more in demand in E-commerce, and also list the technologies for their implementation.
The Rise of Augmented/Virtual Reality
Published in 2020, the results of the PwC Global Consumer Survey show that face-to-face shopping remained the main method of shopping before the pandemic. 47% of consumers named shopping as their preferred way to purchase non-grocery items. Purchases via mobile phone were preferred by 30%.
Since the start of the pandemic, the situation has changed: now 45% of consumers prefer to shop using their mobile phones. A significant increase was also observed among those who most often use personal computers and tablets.
Thus, consumers have adapted their shopping habits to the conditions of COVID-19 and began to rely on e-commerce more often. Coronavirus anxiety has changed the trajectory of the global market and accelerated the movement towards maximum digitalization.
A report from the UK Office for National Statistics published in early 2021 confirms that last February set a new record for digital commerce with 36% of all retail sales made online. Compare with the beginning of 2020: the online segment of all retail sales was only 20%.
Along with the growing popularity of online commerce, there is a growing demand for tools that increase its efficiency. The most modern trend in today’s E-commerce is AR and VR technologies. Here are some statistical facts:
- In 2020, global AR ad revenue grew to $1.41 billion, nearly triple the 2019 figure.
- According to ARtillery Intelligence, global AR ad revenue could reach $8.02 billion by the end of 2024.
- By 2022, eMarketer estimates that over 95 million Americans will use AR at least once a month.
- As of June 2020, 35% of US respondents have used AR to evaluate custom furniture or vehicle designs.
- A June 2020 survey by CommerceNext and Exponea found that 20% of US retailers are looking to invest in AR or VR solutions for their online store. Six months earlier, only 8% of retailers gave this answer.
It is also expected that the spread of 5G will increase the interest of retailers in AR and VR due to the improvement in network bandwidth.
Benefits of Using AR/VR Technologies in Ecommerce
A consumer survey conducted by Google showed that 66% of people are interested in using augmented reality technologies for shopping. Director of Product Management Jennifer Lew emphasizes the importance of AR for online retail: “For many consumers, this is the best alternative to buying a product for home use.”
Augmented reality provides more detailed information on products, allows you to “revive” them, transfer them from the digital space to the real one. This allows customers to make their purchasing decisions with greater confidence. A Google study found that 6 out of 10 people want to be able to visualize how a product could fit into their lives. AR technologies allow you to do this before making a purchase, which significantly improves the quality of service.
Reducing the number of returns
A large number of returns is one of the biggest problems that online stores face. For example, research firm Mintel found that 49% of UK online shoppers have returned items at least once in the past year. Among consumers aged 16 to 34, this figure rises to 60%.
But why do customers make so many returns? In 2019, UPS surveyed 18,000 online shoppers worldwide. The main reason was the receipt of damaged or defective goods – this answer was given by 30% of respondents. Another 27% said they returned items because they didn’t match the description.
Augmented and virtual reality technologies offer 3D visualization, virtual fittings, various product demonstration options. Consumers get the opportunity to try out the product before buying. Shopping is becoming more mindful, and this helps reduce return rates.
Improving relationships with consumers
With the help of AR and VR technologies, brands in eCommerce can interact with customers and build strong and trusting relationships. Augmented reality technology increases consumer engagement, which ultimately affects conversion rates.
Vertebrae, Facebook’s augmented reality technology partner, conducted the study. The results showed that when retailers used AR in e-commerce during the COVID-19 pandemic, it increased customer engagement rates by 19%. In addition, consumers who use AR experience a 90% increase in conversion rates compared to those who do not.
This is confirmed by data from the Shopify platform: products advertised using VR and AR content have 94% higher conversion rates than those promoted in traditional ways.
Analyst company Deloitte made an even more interesting finding: 40% of buyers would agree to pay more for a product if they could pre-test it using AR technologies.
Strengthening the effectiveness of digital marketing
AR and VR are finding applications in online marketing. For example, Google announced the inclusion of AR ads in search results.
How does it work? By clicking on the “View in 3D” button, users can interact with a 3D virtual object or product. The function of embedding in a real environment is available – for this, an AR object is superimposed on the image from the phone’s camera.
Strategies for implementing AR and VR technologies
With augmented and virtual reality technologies, it is easy to jump above your head. The potential for AR and VR seems endless, but the real possibilities have only begun to catch up with marketers’ wildest fantasies.
Consider technologies that can already be connected to your online store.
5 ways to implement AR in online trading
Virtual fitting of goods. This way, shoppers can see how the clothes will fit their body type. Additional collection and analysis of information will allow the merchant to improve the technology for selecting recommendations, and hence increase customer satisfaction.
Adjustment of clothes for different models. Analytical software reads data about the article and/or model parameters. By comparing this information, he can demonstrate how clothes will look on people with different body types.
Virtual cosmetics. Users can upload personal photos to the site, apply makeup or skincare products. This helps them visualize what the beauty products will look like in action.
Demos and guides. An interactive step-by-step guide eliminates potential risks and reduces the time for evaluating a product, as it provides the necessary information about it in a clear and concise format.
AR-based games. Gamification is a good way to increase customer engagement. You can offer users to download gaming mobile applications and give out coupons and discounts as a reward.
4 Ways to Bring VR to Ecommerce
VR product design. Virtual reality can be connected already at the stage of product creation. Before building real prototypes, it makes sense to develop and explore virtual models.
virtual showrooms. 3D space allows you to visualize digital models of goods on a real scale, especially when it is large-sized equipment, vehicles, and so on.
interactive events. In the virtual three-dimensional space, you can hold “live” events – concerts, competitions, prize draws. This forms a close-knit community around the brand and also helps people unwind without endangering their health.
Immersive learning. Virtual reality technologies allow you to simulate the experience of using a product. Consumers can try out some of its features and specifications before purchasing.
Case of the game Wind of Luck
AR and VR technologies can be used to develop products that offer advertising and promotion to other brands. For example, the Wind of Luck application created by a Belarusian developer is a mobile game where the user uses a metal detector to find great deals and discounts from various online stores.
The gameplay of Wind of Luck is somewhat reminiscent of Pokémon GO: augmented reality technology “hides” gifts and loot boxes throughout the city. The difference is that in the case of Wind of Luck, the user receives real benefits that will help him save on purchases.
The founder plans to monetize the game through partnership agreements with brands. For example, for every purchase made with Wind of Luck, the brand will pay the developer 10% of the check amount. The founders expect that upon reaching more than 20,000 users, the startup will reach a monthly profit of more than $100,000.
Examples of using AR and VR among large companies
Some e-commerce segments are better suited for AR and VR adoption than others. The benefits of these technologies are most apparent in areas where the key factors are aesthetic, such as color and size. For example, home décor and furniture work well: people want the items they buy to fit into their home space, to match the overall style.
Below we have given several examples of how large companies use augmented and virtual reality technologies in their practice.
Amid coronavirus restrictions, international retailer ASOS has accelerated the introduction of AR solutions into its marketing practices. In order not to have to shoot clothes in a real photo studio, ASOS has partnered with Zeekit to launch AI photo generation technology.
The algorithm superimposed the image of the garment on the photo of the model. Based on the size, style, and other parameters, he showed how the thing would sit with a particular type of physique. Every week, ASOS launched a presentation of 500 new products on six different models.
DFS is a leading UK sofa supplier with over 120 showrooms. In January 2020, the company launched its AR campaign, inviting consumers to “embed” any piece of furniture in their 10,000-item catalog into their homes.
At the same time, the showrooms were closed due to quarantine measures. But a year after the launch of the campaign, DFS management noted that compared to regular visitors, those customers who interacted with AR solutions saw a 112% increase in conversions, as well as a 106% increase in revenue per visit.
The application from the furniture manufacturer IKEA contains a library of almost all furniture items from the brand. Users can see what the objects they are interested in will look like in their homes.
The application uses augmented reality technology to superimpose a 3D image of furniture on a picture of a room broadcast from a smartphone camera. Users can rotate and move furniture to their liking.
L’Oreal is one of the biggest players in the beauty industry and the undisputed leader of the BeautyTech market. So, in 2018, the company acquired ModiFace, a developer of AR technology for trying on goods.
ModiFace technology invites customers to try beauty products, a new hair color, as well as analyze skin tone and match it with the right shade. L’Oreal says when shoppers use ModiFace, the conversion rate triples.
In short, the company has long been ready for the challenges of the pandemic. The annual report states that in 2020, 27% of L’Oreal’s sales were made through online stores. And in April 2020, this figure reached its peak: more than a third of all purchases (34%) were made online.
MOSCOT, a global accessories brand, has announced a partnership with Vertebrae, the leader in AR and VR technologies. Customers can now experience MOSCOT’s virtual eyewear fitting without the need for special apps.
The Virtual Artist app from international beauty retailer Sephora allows consumers to interact with the thousands of SKUs that are traded daily in stores of the same name.
For example, a client may “try on” eye shadow, a shade of lipstick, blush, or false eyelashes. Step-by-step digital tutorials show how to recreate the resulting image in the application. The newly added Color Match feature triggers AI processing of the user’s photo so that the app selects the shades that best match the client’s skin tone.
The use of virtual and augmented reality technologies in Ecommerce allows consumers to interact with products in real-time. This bridges the critical gap between being physically present in a store and shopping online.
Relatively easy integration with existing solutions allows consumers to interact with products without leaving home. The ability to rotate objects in a 360-degree view, try new colors and styles provides customers with an immersive experience and increases conversion.
But can AR and VR impact the world of e-commerce? The answer is that the influence is already there, and over time it will become more and more obvious. In addition, the options for implementing such technologies in online trading are very wide, so in the coming years, we expect their popularity to the peak.