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From Clicks To Bricks: How Augmented Reality Can Impact E-commerce

Interacting with products and services that have a three-dimensional representation in a virtual environment is highly appealing to customers who are showing a greater inclination towards this immersive experience

From Clicks To Bricks: How Augmented Reality Can Impact E-commerce
POSTED ON April 23, 2023 12:07 PM

In the post-pandemic world, direct-to-customer (D2C) businesses face a new challenge—adapting to the changing retail landscape. Augmented reality (AR) is emerging as a key technology solution for creating immersive shopping experiences. 

This is particularly true in business-to-business (B2B) e-commerce, where AR-enabled virtual showrooms are becoming increasingly popular. It allows businesses to showcase their products and services to customers more immersively, even when they are not physically present. 

Experience Reality Like Never Before 

AR is a technology that overlays digital information in the real world, creating an enhanced view of the physical environment. It uses computer-generated graphics, sounds, or haptic feedback to enhance the real-world environment. Users can interact with these virtual elements using a mobile device or other hardware as if they were part of the real world.

At a time when the B2B e-commerce landscape is witnessing a considerable gap between physical and online shopping experiences, AR can prove to be a game-changer, as it allows businesses to provide customers with a better understanding of the products they are purchasing.

An Interactions Consumer Experience Marketing study revealed that 61 per cent of shoppers prefer to shop at stores that offer AR over those that don't. Businesses are reaping significant benefits by incorporating AR into their e-commerce platforms. 

Benefitting From The 3D Experience 

A three-dimensional representation of products in a virtual environment appeals to customers greatly as they can interact with products in a previously impossible way in a two-dimensional online environment. 

Ikea Place app
With the IKEA Place app, customers can preview furniture in their homes before purchasing.

AR, indeed, has had a significant impact on e-commerce. Some of them include:
a) Better Customer Experience with Personalized Shopping
AR technology allows customers to visualize products in their environment. For example, a B2B e-commerce platform that sells heavy industrial machinery could use AR technology to create a virtual showroom where customers can see how the equipment would look in their factory or warehouse. 

This can help customers make more informed purchasing decisions and reduce the likelihood of returns or exchanges. It is no wonder that the same survey mentioned above showed that 40 per cent of respondents were willing to pay more for a product they could experience through AR.

b) Unlocking Higher Sales For E-commerce 

The use of augmented reality in e-commerce has also increased sales. A study by Harvard Business Review found that the possibility of a purchase is 19.8 per cent higher with the customers who used AR compared to those who did not use AR. 

This means that AR can help businesses increase revenues. Shopify is a great example to substantiate these findings as the Canadian e-commerce company has recorded up to 250% increase in conversion rates in its product pages using 3D models in AR since it introduced the 3D feature in its online marketplace in 2018.

c) Enhancing Customer Engagement, Driving Market Expansion

Augmented reality has also improved customer engagement and helped businesses expand their market reach. By using AR, e-commerce businesses can create a more personalized shopping experience for their customers, leading to higher engagement levels. 

For example, a B2B e-commerce platform that sells office furniture could use AR technology to allow customers to see how different chairs would look in their office space.

A real-world example is Home Depot's launch of its Project Color AR app, which lets users see how the paint looks in their own rooms. This is a perfect example of a company that leveraged AR technology to drive greater customer engagement and confidence. Customers can see the appropriate shade when paint colours vary so much per the lighting and the space in their rooms!

Reaching To The Physically Absent

With the help of AR, businesses can reach out to customers who are not physically present in their stores, which can go a long way in expanding their market reach. For example, a B2B e-commerce platform that sells industrial equipment may have customers in different parts of the world. AR technology can create a virtual showroom where customers can see the equipment in action, even if they cannot visit the physical store. This means businesses can expand their reach beyond their local market and tap into a global customer base.

Home Depot Project Color AR app
Home Depot Project Color AR app lets users see how the paint looks in their own rooms.

AR In Action 

Many leading companies globally have already harnessed the potential of AR technology to enhance their competitiveness in the e-commerce domain.

A case in point is Cisco, which has partnered with Blippar to provide detailed product information to customers through a mobile device's camera. This helped customers make more informed purchase decisions and aid in the installation process. As a result, according to official estimates, AR technology helped speed up the installation process by an average of 30 per cent.

Another example is IKEA, a pioneer in using AR technology to enhance the customer experience in B2C e-commerce. With its IKEA Place app, customers can preview furniture in their homes before purchasing, giving them a more realistic and personalized shopping experience. 

By leveraging AR in this way, IKEA has been able to differentiate itself from competitors. It can also drive a higher percentage of sales by providing a more immersive and convenient shopping experience, primarily since many of its warehouses are outside city limits and customers need not travel to and fro to pick up products.

These instances shine a path start-ups can use in their e-commerce journey. As per statistics shared by ThreeKit, AR product experiences are 200 per cent more engaging than their non-AR equivalent. Undoubtedly, the potential future of augmented reality in e-commerce is vast.

Though companies using AR for e-commerce are already giving themselves a significant competitive edge, advancements in technology will likely make the technology more accessible and affordable. The full implementation of the 5G network is especially likelier to enable businesses to realize their full potential.

As technology continues to evolve and become more accessible, more businesses will likely begin to integrate augmented reality into their customer experience. The tech intelligence agency, ABI Research, expects the AR retail market to reach $12 billion globally by 2025 due to increased social media usage and online shopping traffic.

More start-ups are likely to integrate AR into their customer experience to create a truly immersive and interactive shopping experience as they go all out to improve customer satisfaction and drive sales as part of their omnichannel sales strategy.

- Karan Gupta, senior vice president of Moglix ecommerce platform 

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