No longer just a novelty that brands trot out for attention, augmented reality has savvy brands upgrading their e-commerce presence.
Driven by the growing sophistication of mobile phones, good AR can help consumers visualize furniture in their home, “try on” clothes and cosmetics, and even assist with brand-building in the form of customized filters on social media platforms including Instagram, Snapchat, and TikTok.
In short: it makes shopping more efficient and enjoyable for consumers, which can translate to bigger sales numbers. How much bigger? AR research firm ARtillery Intelligence predicts that AR advertising revenue will exceed $8 billion by the end of 2024—and that’s a number worth paying attention to.
Augmented Reality Uses in E-Commerce
“Seeing” Furniture in Your Home: Retailers such as Amazon, Target, Home Depot, and IKEA are improving the online shopping experience with apps that make it easier for consumers to purchase the perfect home items. Have your eye on something from Crate & Barrel? An AR tool in its mobile app can help you see how various furniture items would look in your real-life rooms.
Clothing and Cosmetics Shopping: Fashion brands such as Farfetch, Prada, and Dior have partnered with companies like Snapchat to use AR technology that lets consumers virtually try on clothing, shoes, and accessories using their phone. Improvements in body tracking and cloth simulation, which makes digital fabrics move more realistically, help provide a more accurate experience for online shoppers.
Cosmetics are another natural fit for AR usage. When consumers can try on makeup before purchasing, the shot-in-the-dark feeling of earlier online cosmetics shopping is eliminated. Countless luxury beauty brands, including Charlotte Tilbury, Dior, NARS, and Tarte Cosmetics are now giving shoppers a chance to color match and experiment with different makeup looks from the comfort of their own home.
Brand Building: As augmented reality technology evolves, AR advertising will provide an increasingly immersive and helpful consumer experience, creating brand awareness and loyalty.
The best examples are both genuinely engaging and put brand offerings front and center. In 2019, Ally Bank used AR to turn six American cities into a real-life Monopoly board game scavenger hunt, to “promote financial literacy and win prizes.” Panera Bread used AR to create a filter ad on Facebook and Snapchat that prompted viewers to yawn into their phone camera, which triggered the appearance of a sunrise and a virtual Panera breakfast using front- and back-facing phone cameras.
“As AR grows, every element of the physical world is going to have a virtual counterpart or its ‘digital twin,'” M7 Innovations founder Matt Maher told commarts.com. “Brands should start thinking about what digital experiences they can provide for consumers around these physical touchpoints. Concurrently, for any brand that sells a product, AR transforms more than a billion smartphones into virtual storefronts, allowing users to try on and try out their products.”
Benefits of Augmented Reality in E-Commerce
Improved User Experience: The importance of high-quality e-commerce product videos became even clearer during the pandemic—the digital replication of an in-person shopping experience reduces a shopper’s need to physically pick up a product, increasing the probability of online purchase. A Harvard Business Review field study revealed that shoppers who sampled products using an AR interface spent 50% more time sampling, sampled 7.5 times more products than average, and sampled more featured and non-featured products.
Gen Z and Social Shopping: Another benefit of augmented reality in e-commerce is the connection to Gen Z and social shopping. Gen Z shoppers are more likely to purchase a product they experienced with AR compared to millennials and Gen X, according to a 2022 study commissioned by Snapchat, and a whopping 92% of Gen Z shoppers are interested in using AR tools while they shop. By taking advantage of these AR tools and taking the time to craft a thoughtful social commerce plan, brands can attract younger shoppers and influencers.
Brand Loyalty and Engagement: Giving consumers something to interact with not only enhances the online shopping experience, but it can also stop the seemingly endless social scrolling so many of us are guilty of. Customers who use AR are more likely to spend more time viewing products, more likely to purchase a product, and, according to survey commissioned by Snap and Publicis Media, “two-thirds of consumers are less likely to return a product after using an augmented reality feature.”
Potential Deficits of Augmented Reality in E-Commerce
So, what’s the catch? While providing numerous benefits for e-commerce brands, augmented reality doesn’t come without its challenges.
Though AR technology is becoming more accessible, developing proprietary AR still comes with a hefty price tag. Costs differ between industries and implementations, but a March 2022 Harvard Business Review article estimates that, “the cost of AR implementation can vary from $50,000 (for real estate apps) to more than $200,000 (for an electronics retailer) with the development time varying from four to six months, respectively.”
In addition, brands must grapple with a shift in required expertise and resources. Does your brand have the technological capacity to build AR tools in-house, or must you purchase the tech from a third party? The same question applies to creative know-how—any AR advantage quickly vanishes when AR tech is integrated unnaturally.
Overall, augmented reality can be an important and exciting tool in your e-commerce toolbox—but only when it’s done well.