Augmented Reality in Ecommerce: The Stats, Benefits & Example Campaigns
The use of augmented reality in ecommerce web design gives consumers an immersive experience, allowing them to have real time interaction with products while remaining in their own environment.
Augmented reality (AR) bridges the gap felt by customers between physical stores and online shopping experiences. A gap that’s felt even wider due to the Covid-19 pandemic restricting retail shops from being open, leaving consumers unable to enter stores and physically handle products.
We were fortunate enough ourselves to see first hand the power of what AR in ecommerce can do when back in 2018 we worked with leading UK retailer Argos to produce their first AR enabled app. The app enabled users the ability to view furniture items placed within their own home. Take a look:
Augmented reality in ecommerce & retail: The stats
According to PwC’s Global Consumer Insights survey, prior to the pandemic shopping instore was the dominant method for consumers, with 47% of customers preferring to shop this way for non-food items, compared to 30% who shopped via mobile phone.
Since the pandemic began, those who shop online via mobile phone has increased to 45% according to PwC’s report, as well as a substantial increase in those who shop online via computers and tablets.
The Covid-19 pandemic has resulted in consumers adapting how they shop and relying on ecommerce for their purchases, with PwC concluding that “global disruption has forced the acceleration of a more digital way of life.”
This view is supported by the recent Office for National Statistics report, which analyses the retail sales for Great Britain. According to the ONS, February 2021 was the highest on record for online shopping, with 36.1% of the proportion of retail sales spent online. This is a considerable increase compared to retail sales pre-pandemic, with 20% of online retail sales reported by ONS in February 2020.
So with Covid-19 restrictions continuing to bring a halt to customers being able to shop in store and consumers increasingly relying on online shopping channels, here’s how augmented reality technology can benefit ecommerce.
The benefits of augmented reality in ecommerce
A consumer AR survey by Google found that 66% of people are interested in using augmented reality technology for help when shopping. Jennifer Liu, Google’s Director of Product Management, highlights the importance of augmented reality technology in ecommerce, explaining: “For many consumers it’s the next best thing to actually having the product with them in their own home.”
Augmented reality helps to bring ecommerce products to life with detailed information, enabling customers to make confident purchase decisions. Google found that 6 in 10 people “say they want to be able to visualise where and how a product could fit into their lives.” Augmented reality technology enhances the customer experience by allowing this visualisation to be possible before consumers commit to a purchase.
Reducing customer return rates
As consumers continue to prioritise online shopping, high return rates are one of the biggest problems faced by online retailers. Market research company Mintel found that 49% of UK online shoppers had returned items bought in the past year, with that figure rising to 60% when the consumers are aged between 16-34.
Addressing the question of why customers are returning goods, a large-scale 2019 report from UPS surveyed 18,000 Global online shoppers. They found the main reason was due to faulty or damaged products at 30%, but this was closely followed by 27% of consumers who claimed they returned goods as they were ‘not as described’.
As augmented reality technology offers an immersive experience with 3D visualisations, virtual try-ons and product demos, AR provides consumers with the unique opportunity to try before they buy. As a result, augmented reality technology helps to combat high return rates as customers are able to make an informed purchase, which will ultimately lead to a reduction in return rates.
Improving customer relationships
The immersive experience offered by AR gives ecommerce brands the opportunity to not only engage with new consumers, but to build a lasting and trusted relationship with them too. Augmented reality technology helps to increase engagement between consumers and ecommerce brands, which can ultimately result in increased conversion rates.
Research from Facebook’s AR partner Vertebrae has shown that retailers who have utilised AR technology during the Covid-19 pandemic are seeing a 19% increase in customer engagement. In addition, customer conversion rates increase by 90% for consumers that engage with AR versus those that don’t.
Much, much higher conversion rates
This is supported by data recently released by ecommerce platform Shopify, who have claimed that products advertised with VR/AR content saw a 94% higher conversion rates than products without that content.
While the research highlights how augmented reality can not only increase engagement but also have a significant impact on conversions for ecommerce brands, Deloitte have gone one step further by claiming that 40% of shoppers would even pay more for a product if they were able to test it through AR technology.
Examples of augmented reality in ecommerce
According to Jennifer Liu, Director of Product Management at Google, “When it comes to beauty, AR is no longer nascent; it’s table stakes.” This statement certainly rings true when combined with the statistic that 43% of those who use their smartphones to shop expect all beauty brands to use AR.
L’Oreal is renowned major player in the beauty industry, but the brand is also leading the pack in the Beauty Tech world too. Over the last 10 years, L’Oreal has had a digital transformation, with a declared ambition of being the number one Beauty Tech company by providing consumers “with unmatched experience in terms of augmented products and services.”
L’Oreal acquired AR try-on technology company ModiFace in 2018. With over a billion visits and an average of 7 minutes spent on it’s services, L’Oreal claims ModiFace is a “powerful driver of online sales acceleration, with conversion rates multiplied by three when ModiFace is available.”
By utilising the AR capabilities of the ModiFace technology, L’Oreal have been able to transform the consumer experience by offering virtual makeup and hair colour try-ons as well as skin diagnosis and skin shade assessments. The result has meant that L’Oreal were well prepared to weather the storm from the Covid-19 pandemic and its effects on the retail industry.
In their 2020 annual report, L’Oreal released data which highlighted a ‘remarkable development’ for the brand. The results illustrated that ecommerce accounted for 27% of sales last year on the brands own and retailer websites, reaching it’s peak in April 2020 with ecommerce responsible for 34% of sales.
“When brick-and-mortar stores had to close because of public health lockdowns, L’Oréal had all the tools necessary to maintain contact with its consumers and continue selling its products. By incorporating new technologies wherever consumers make purchases, the Group stood out not only because of the quality of its products, but also because it gave consumers the possibility to try them on virtually using augmented reality.”
DFS is the UK’s leading sofa retailer, with over 120 showrooms. In January 2020 they launched the largest web-based AR implementation in the world, with incredible results. Utilising 3D and AR enabled visualisations, DFS offered consumers the opportunity to virtually display over 10,000 sofas in their homes.
Despite showrooms being closed due to Covid-19 restrictions, DFS have seen significant conversion and sales results since the AR implementation. In December 2020, DFS announced a conversion lift of 112% and a revenue per visit lift of 106% for shoppers who interact with 3D and AR versus those who have not. Head of Digital at DFS, James Vernon explained:
“We knew that 3D and AR would deliver an innovative shopping experience that went far beyond video or still images. Now digital shoppers can bring a virtual sofa into their home or office, and even walk around it, to see if it fits their space and matches the existing style of the room. The results so far have been outstanding, and we are successfully growing online sales”.
Ecommerce retailer ASOS serves over 22.3 million active customers, offering 85,000 products to it’s Global customer base through its market leading app and mobile/desktop experience. 2020 saw ASOS accelerate their use of augmented reality technology in response to the Covid-19 pandemic, in order to bypass the need to shoot products in a studio.
In collaboration with Zeekit, ASOS were able to utilise AR to simulate real-life photography, offering customers a simulated view of 500 products each week on six real-life models.
“By digitally mapping each product onto the model in a realistic way, taking account of the size, cut and fit of each garment, the technology ensured product presentation remained as realistic and engaging as possible, while supporting social distancing.”
ASOS had originally started trialling the AR technology in collaboration with Zeekit in January 2020 with their ‘See My Fit’ augmented reality tool, helping ecommerce shoppers to view different products on different body types. Tim Carey, Senior Content Manager at ASOS Studios, explained:
“We’re fortunate enough to have been experimenting with Zeekit’s AR technology for a while, which has meant that we could scale this tech up at short notice. It’s a great tool for us to have at our disposal, helping us drop new items on site each week and provide customers with realistic product images in a studio setting, while protecting the wellbeing of our models and staff.”