COVID-19 caused a significant shift in consumer sentiment; making mobile shopping ever so popular and digital brand engagement more impactful. While physical stores are losing traction, it’s time to adopt immersive consumer tech to attract new shoppers and to reinforce brand recognition.
Times change and so does the tech we use
In 2016, Google claimed that 82% of users turned to their phones while in a store to make more conscious purchase decisions. By reading that, one might ask the question: what is it about online shopping that has made it so appealing to customers in recent years? And more importantly: what are the trends today?
Convenience is a key part of online shopping, but let’s not forget about speed, the availability, and the variety of products — which are not all so easy to assess when you’re in a store. Yet, all of these factors are now under scrutiny due to the circumstances of the pandemic and an increasingly low-touch economy. But no matter how luring these value propositions of e-commerce can be, we still prefer visiting stores and browsing catalogues to buy certain things. Or, do we, really?
Our receptivity to purchasing digitally has taken a sharp upturn with the proliferation and evolution of smart devices. In 2019, mobile accounted for 65% of all e-commerce traffic (around $2.3 trillion) and these purchases are expected to hit $3.56 trillion by 2021. With younger consumers starting and ending more and more consumer journeys on mobile each year, brands realized the need to bridge the online and offline experience gap through better apps and mobile experiences.
That being said, augmented reality (AR) offers a level of visual immersion that makes it one of the most exciting ways of driving mobile app engagement and conversions in m-commerce in 2020. AR blurs the line between the physical world and computer-generated visuals by enhancing what we experience. A desirable tool in the hands of retailers and marketers, AR now spans extensive use cases, ranging from interactive representations of products and AI-powered facial recognition through to virtual fitting rooms in fashion and even enhanced retail and indoor navigation, just to mention a few benefits over brick-and-mortar.
According to Threekit, augmented reality's ability to help consumers better understand products is shown in 39% of retailers now using the technology for the consideration phase and 67% of ad agencies claiming they can make more use of AR to bring products to life.
New frontiers in customer engagement
The digital aspect of customer experience has become one of the most important touchpoints that brands have with their customers. When emerging technologies such as AR — and similar immersive 3D tech like virtual and mixed reality — take the center role in such experiences, they can introduce an unprecedented level of transparency between people, businesses, and the things we interact with.
AR is a game-changing way for brands to invite shoppers to explore, configure, personalize, and interact with offerings in the pre-sales or pre-production phases — whether inside or outside physical stores. According to The Drum, AR can increase customer interaction rates by 20% and click-through rates to purchase by 33%.
According to Gartner, today more than 1 billion smart devices can deliver AR experiences and the growing adoption of 5G and connected devices will result in 100 million consumers actively using AR to shop in-store or online by 2020. Given that, retailers’ willingness to deploy their own similar solutions shows a 15 to 30% increase every 12 months since 2018 and according to IDC, investment in AR will reach $18.8 billion this year, up 78.5% from 2019.
Further data regarding the growth curve of Apple’s (ARKit) and Google’s (ARCore) augmented reality development platforms reveal that mobile AR could reach a 2.5 billion installed base and $70 to $75 billion revenue by 2023 — with large tech players like Amazon, Microsoft, and Facebook now on board, and 26% of smartphones requiring no install to deliver AR experiences.
Let’s face the new reality of online shopping
Consumers are constantly on the lookout for personal and interactive experiences when it comes to shopping online, giving birth to a range of exciting user experiences in recent years that are set to redefine the overall customer journey. Here are some of the best examples of augmented reality being deployed by advertisers and marketers today for better customer engagement:
Perhaps one of the best known AR applications to date is the IKEA Place real-time product browser and configurator. Built upon a database of 2000+ products, this projection-based type app allows users to select items from the brand’s catalogue and then ‘drag and drop’ them in our home apartment, digitally. The ability to showcase accurately scaled virtual products in people’s living rooms not only allowed IKEA and retailers like Amazon or Wayfair to encourage direct purchases directly in their mobile app but helped reimagine their entire customer journey.
AR’s multifaceted value proposition for brands, retailers, and shoppers allows for unified, cross-channel customer experiences and decreased spendings — due to better product previews and reduced returns — leading buyers to more informed purchasing decisions in a gamified way.
Going one step beyond immersive social media filters, eyewear retailer, Warby Parker commercialized their brand’s mobile presence with facial recognition to provide their customers with better visuals of their products. In an attempt to cut with the ‘tradition’ of sending out physical test frames to customers, the brand called for AR in their mobile app to recreate the retail experience — now at the home or on-the-go — leveraging the depth sensors of newer devices (such as Apple’s TrueDepth technology) to capture volumetric data.
Ever wondered how it feels to test a car that doesn’t even exist yet? The AR Cybertruck app lets users play around with the dimensions and controls of the upcoming Tesla light-duty truck and even allows prospective buyers to take it for a spin or compare it in size to other cars. Beyond the purchase, AR can also enhance the use of an automotive product and the driving experience by augmenting user manuals, assembly instructions, dashboards, and navigation or provide additional information on what a certain button can do. Mercedes, Hyundai, Land Rover, and GMC are some of the companies experimenting with such solutions.
A 2018 Deloitte study revealed that almost 90% of middle-market companies with revenues ranging from $100 million to $1 billion use AR in their marketing strategies. For smaller companies, research showed that 72% are planning to do so in the coming years.
Beauty brand, Lush is known for its colorful bath bombs and also for not shying away from emerging digital solutions like augmented reality. Lush has already deployed AR solutions to engage customers in and outside of their physical stores — as well as beyond the purchase. Lush Labs, an application designed for an enhanced, zero packaging store experience, used machine learning to help buyers explore product variants. The application was designed to support the brand’s sustainability goals and to break with excess packaging by letting customers scan and explore key information about the products with mobile phones. Lush Lens is the continuation of that brand loyalty-building journey.
L’Oréal x ModiFace
L’Oréal acquired ModiFace, a company combining AR with artificial intelligence, to virtually engage shoppers and familiarize products with the cosmetic brand’s increasingly digital target audience. Using the phone’s camera, users can simulate and try on various shades of hair-colors, lipsticks, and other beauty products before buying them. From getting rid of makeup samples to saving people considerable ‘wipe-off’ time, this is a great way of simplifying the customer journey, resulting in a 49% growth in e-commerce sales during the first half of 2019, compared to the same period in 2018. Similarly, Sephora, a leading specialty retailer, was experimenting with an AR smart mirror using the same technology.
Adidas & Nike
AR-enabled virtual dressing rooms and ‘try-on’ technology have become some of the most exciting ways how fashion brands like Nike and Adidas engage their retail store customers and mobile shoppers. Augmented reality has been deployed in the most creative ways by both brands whether it’s verifying the genuineness of high-end sneakers, showcasing running shoes in 360 degrees on mobile apps, advertising sustainability brand efforts and even building brand loyalty via an in-store first-person POV experience around outdoor apparel.
Augmented reality in mobile commerce has the potential to offer a more personal, interactive experience for consumers by blending together virtual objects and the real environment in real-time — meaning a level of innovation in the shopping journey that fosters customer commitment and the remembrance of brand experiences.
eBay x Myer
When interacting with a phone screen users have a limited amount of visual information to make a thorough purchase decision. eBay and Australian retailer, Myer reimagined the digital shopping experience by creating a personalized virtual reality e-commerce ‘department store’, featuring enhanced navigation, where product information is updated in real time and shaped by consumer data.
Virtually anything can happen
In the light of social distancing and never-before-seen augmented features coming to newer devices, one might go so far as to say that hands-free AR solutions are slowly killing brick-and-mortar stores. In fact, augmented reality has begun to challenge some of the most sought-after advantages of physical stores such as ease of product returns, reliability, and lower risk of fraud.
According to a 2016 Retail Perceptions report, 61% of shoppers prefer retailers that provide augmented reality experiences, 77% wish to use augmented reality for customizing product attributes — such as color or style — and 40% of consumers are willing to pay more for AR-ready products. The Drum mentioned 64% of marketers already using or expecting to use AR a year ago and Global Market Insights estimates that the AR market could surpass $50 billion by 2024, driven by adoption in retail, real estate, medical, automotive, and other industries.
One attractive aspect of AR as a business solution lies in its ability to utilize assets for end-to-end integration in the product lifecycle and the customer journey. A 3D model can be used from early phases of design to promotion and merchandising and to elevate customer experience or what comes after, such as using AR in combination with geo-technology to incentivize people to visit specific locations and collect rewards.
With a growing array of business applications for AR like more engaging ways of storytelling, better visual feedback, personalization and promotion of your products and increased brand awareness in the pre-sales phase as well as improved brand loyalty, customer satisfaction, and reduced returns after a sale is made — AR can have an impact on key metrics such as retention and conversion rates and also on how it builds engagement with users in the long run.
Building a custom AR mobile application can mean a lengthy and resource-intensive development process, and depending on the SDK and the type of the app, costs can be between $50,000 and $200,000+. To pull off a good AR experience, you need a robust CI/CD mobile app development solution to support your release strategy helping your company avoid disruption of operations as performance (speed, stability, uptime) has immediate revenue impact.
One of the difficulties of refining AR technology is that it requires a development team pushing out constant updates, which can cause consumers to ditch the app if it cannot fulfil their expectations. Bitrise supports the creation of AR apps by rolling out new XCode versions with each iOS release so you can rapidly test and deploy new AR SDK features faster with your users and build a better user experience in the long run, resulting in increased customer engagement and conversion rates.
If you’re interested in building your augmented reality application for mobile on Bitrise, feel free to reach out to us and book a demo.