Augmented Reality in E-commerce

The use of augmented reality in ecommerce 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. Because of this, AR has made its way into various industries, from AR in interior design through to AR in fashion.

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.

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. 

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.