Recent surveys reveal that while shopping online, over 78% of users abandon their carts before checking out and completing purchases. The responsibility is on the retailers to convince and persuade their customers to go ahead with their purchases.
Evolving technologies like AR and VR are offering effective solutions to this problem by enhancing the shopping experience with personalized offers, try-on facilities, and product recommendations.
To that effect, online retailers are investing heavily in e-commerce web development companies to integrate technical marvels like AR and VR into their operations.
Table of Contents
1. AR and VR – A Brief Introduction
1.1 What are AR and VR?
Augmented Reality (AR) is a technology that overlays computer-generated images on the user’s view of the actual world to form a combined perception between ‘real’ and ‘augmented’.
AR aims to remodel the real-world view and make it more engaging and informative to the user. For instance, AR applications can be used to include directions on a live view of a traffic area or to display information about products on a shelf.
Virtual Reality (VR), on the other hand, is a replicated experience that may be similar to or totally different from the real world.
VR seeks to create an entirely different virtual world to provide users with an immersive viewing experience for shopping, training, education, and gaming purposes. For example, VR headsets are helpful in training pilots and sailors by creating environments as close to an airplane’s cockpit or a ship’s engine room as possible.
1.2 What is the Difference Between AR and VR?
Both AR and VR are used to bridge the gap between the real and the virtual world with the help of visuals and animation. However, the two are often mixed up and you need to understand their differences to use them effectively.
|Augmented Reality (AR)
|Virtual Reality (VR)|
|● Uses a real-world setting
● Users can monitor their presence in the real world
● Can be used on a smartphone
● Boosts both the real and the virtual world
|● Fully computer-generated
● Users are controlled by the system
● Has to be accessed with a VR headset or controllers
● Only enhances a replicated setting
1.3 The AR and VR Market – Facts and Figures
With constant technical advancements and innovation, the AR and VR market has gained overwhelming traction in recent years. The retail industry is taking note and more and more businesses are seeking out e-commerce web development services to integrate these technologies into their websites and apps.
Let’s take a look at the numbers of recent surveys.
- The global AR and VR market is on the way to reaching US $31 billion within 2023.
- It is projected to go up to a staggering US $52 billion by 2027.
- Revenue and the AR-VR market is expected to grow at an annual rate of 12.72%.
- There will be over 1.7 billion AR users on mobile devices by 2024.
- Around 70% of consumers agree that AR features provide them with more satisfying shopping experiences.
In this blog post, we are exploring the benefits, challenges, and future of AR and VR technology in e-commerce, and why you should keep track of them.
2. Benefits of AR and VR in E-Commerce
Customer satisfaction, sales efficiency, and brand awareness – with new technologies making their way into the e-commerce scene, retail businesses are looking for modern and innovative solutions to enhance all aspects of their operations.
Businesses are taking the help of web development companies to utilize the transformative potential of AR and VR in their businesses and stay ahead of the competition. Here are some of the key benefits of implementing AR-VR in your e-commerce website or app.
2.1. Improved Customer Experience
Customer experience is perhaps the single most important aspect of e-commerce that AR and VR can enhance. A Google study found that 60 percent of customers say that they want to be able to visualize products before buying and see how they fit into their lives or surroundings.
This is especially relevant in the case of e-commerce platforms as users are often skeptical while paying for something without getting a real-life and in-hand feel. This is where AR and VR technologies are solving major doubts in the minds of customers.
For instance, customers can use AR-VR to visualize how a product would fit and look in their home before actually buying it. More and more retailers are incorporating virtual reality showrooms for online shopping on their selling platforms.
i) IKEA Place
The reputed furniture brand IKEA has implemented AR into its operations by introducing the IKEA Place app. On this app, you can virtually bring the furniture to your room without having to visit the store and purchase the products.
All you need to do is open the app on your phone and set the camera in the area of the room where you want to install the furniture. The app will instantly allow you to try and test hundreds of combinations and options according to your taste.
With the IKEA Place app, you can replicate and modify the entire setup of furniture you want without having to pay. Once satisfied with the final look, you can visit the store and make your purchases.
ii) Walmart VR Shopping
Walmart has introduced a VR-based shopping platform where you can enter a virtual store to pick out products on your shopping list and put them in your cart, which will be saved into the system and registered as an actual order once you checkout.
You can access the prices and other details of the products on the shelves along with your shopping list. It also has a virtual shopping assistant to help users along the entire journey through the store.
2.2. Enhanced Product Visualization
AR and VR technology creates a more realistic and accurate view of a product. They can enable buyers to examine and evaluate products with the help of previews and simulations.
AR and VR product catalogs and try-on options can help consumers immensely in making their choices. This is particularly beneficial for fashion and accessories stores as buyers need not spend long durations in trial rooms and see how they look wearing certain apparel on their phones instead.
VR can be used to transport buyers to a virtual showroom where they can browse products and realistically interact with them. On the other hand, AR can be integrated within actual stores such that customers can scan the barcodes of products and view information about them.
Virtual try-ons, 3D product models, and personalized avatars are among the leading virtual and augmented reality trends gaining popularity in 2023. Businesses are leveraging artificial intelligence development to its fullest potential to create unique and lifelike experiences almost identical to actual trial rooms.
Farfetch Try-On Lens – A Real-life Case
English e-commerce brand has teamed up with Snapchat to create the Farfetch try-on lens. The user has to stand in front of the camera and prompt instructions according to their preferences – for example, “Show me a pair of navy-blue formal trousers”, or “Show me a yellow bomber jacket”.
The software is aided by AI and selects the most suitable products from Farfetch’s inventory according to the user’s instructions. It then fits the products on their body in the camera footage with a technology called 3D Body Mesh.
2.3. Reduced Product Returns
As more customers are switching over to online shopping, high rates of returns and exchanges are posing considerable problems to e-commerce stores. A UPS survey interacted with over 18,000 online shoppers worldwide and found that the primary reasons for product returns and exchanges were:
- Faulty or damaged products – 30%
- The product received was “not as described” – 27%, and
- Sizing and fitting issues – 25%.
AR and VR-based solutions offer effective measures to diminish the rate of returns. Giving the users a real-life feel of what they are about to purchase is one of the most significant benefits of immersive technologies for e-commerce.
This is because customers are much less likely to order and return a product if they have the chance to “try it on” or visualize it in their actual surroundings. AR can also be implemented to provide buyers with accurate information about products such as size, dimensions, and materials.
AR inputs help customers resolve their doubts and queries before making the purchase and convince them that “what you see is what you get’”. This greatly reduces the chance of buyers ending up with something different from what they had seen on an e-commerce site or app.
Lenskart – An Actual Use Case
Leading Indian eyewear brand Lenskart has incorporated AR into its app to provide a more realistic view of its products. Using the Lenskart app, customers can try thousands of spectacles, sunglasses, and goggles on their faces from multiple angles.
With the Lenskart app, customers can choose products that fit and suit their faces right at their fingertips. At the same time, the brand can ensure a reduced rate of returns and exchanges on its products as buyers know exactly what they are going to get.
2.4. Efficient Marketing and Advertising Campaigns
E-commerce service providers are remodeling their marketing strategies by integrating AR and VR into their campaigns. With the help of Artificial Intelligence, brands are creating personalized and engaging ads that have a greater potential of convincing users to make purchases.
AI allows you to collect and analyze vast amounts of data and identify the likes, dislikes, interests, and behavior of each user. This helps you cater to each individual’s needs and send relevant ads that have higher chances of conversion.
Every leading digital marketing company is prioritizing the inclusion of AR features in their marketing campaigns because of the following benefits:
- Personalized experiences
- More effective targeted advertising
- Options for customization and modification
- Increased confidence of shoppers
- Boosted brand image, and
- Faster and greater rate of conversions.
Baume & Mercier – An Example
Luxury watch-makers Baume & Mercier collaborated with Haptic Media and launched a virtual try-on experience to promote their ‘Riviera’ line-up of watches. What made the experience realistic was the inclusion of various wrist sizes and personalized suggestions to customers.
While creating the AR experience, Haptic Media also conducted user testing. This enabled them to study how people generally hold out their wrists and the angle at which they usually hold their devices. This drew more users to the Baume & Mercier homepage, and to try out the new range of watches.
2.5. Social Shopping
AR and VR are also helping online retailers promote and enhance social shopping. Social shopping aims to combine social media platforms with e-commerce stores. This enables users to directly purchase your products from social media platforms like Instagram, Facebook, and Snapchat.
This can be done via dedicated posts with links to your product pages. Some platforms like Facebook and Instagram let you set up customized shop pages and offer you e-commerce tools to sell items on the platform.
With people spending a significant part of their time daily on special platforms, you must take your business to wherever your customers interact with each other. Effective social media marketing is crucial not only because it drives your sales, but also because your competitors are already capitalizing on it.
VR in Social Media Marketing – Balenciaga Afterworld Example
VR can be utilized to develop engaging games and level up the shopping experience. The popular luxury brand Balenciaga launched a VR-based game called ‘Afterworld: The Age of Tomorrow’ to promote its 2021 fall/winter collection. Balenciaga posted a short video depicting the gameplay along with the link to the online store on YouTube.
This video went trending on YouTube and attracted a high volume of users to play the game. Creating an avatar dressed in the latest Balenciaga apparel, players had to navigate a futuristic map and overcome simple quests.
After playing the game, some players shared their experiences and feedback on other social media platforms. This in turn generated hype about Balenciaga’s new line of clothing and helped the brand drive sales.
AR in Social Media Marketing – Dominos Pizza Lens
Dominos launched a mobile campaign that enabled Snapchat users across the U.S. to order food right in the image-based messaging app. Snapchat’s ‘shoppable AR lens works on both the front and back cameras of the user’s smartphones and lets them customize and place their orders without leaving the app.
3. Challenges of AR and VR for E-Commerce
Although AR and VR are immensely effective in boosting E-commerce operations, they are still relatively new technologies and have certain challenges you need to be aware of and address while implementing them.
3.1 Cost of Implementation
The cost is the most vital issue that arises while incorporating any new technology into business operations. Studies found that over 33% of online retailers identified financial constraints as the leading barrier to implementing AR and VR technology.
Integrating AR and VR functionalities in existing software can cost up to several thousand dollars. If a company wants a custom app with these features from scratch, the price tag could even reach the six-figure range.
However, there are multiple ways of regulating the expenses of AR-VR implementation. For instance, you can use off-the-shelf AR-VR frameworks or hire professional development companies.
3.2 Technical Complexity
AR and VR are modern-day marvels and require a high amount of technical knowledge and skills to use and deploy. A high percentage of businesses are skeptical about the talent and technical gaps that need to be overcome to utilize these technologies to their fullest.
It is interesting to note that while people are reluctant about the in-depth know-how required, AR as a technology can be used to upskill a workforce that might even be working remotely.
3.3 Lack of Awareness
Business owners often struggle to allocate resources that are already scarce to the development of AR and VR-based applications. It takes time and labor to recruit and train a workforce skilled at operating complex systems.
The solution here is to educate the executives on the long-term benefits of this technology over its initial investment and how it can help a business get ahead of the competition.
3.4 Too Overwhelming for Users
VR headsets are bulky devices and can get quite uncomfortable to wear for long hours, causing motion sickness. Apart from that, AR and VR simulations can become too complex and difficult to use, especially for users who are not that tech-savvy.
To avoid such situations, businesses need to keep innovating their devices and make them lighter and easier to manage. You should also make sure that your AR and VR interfaces are clutter-free and offer smooth and simple navigation. It is also integral to run frequent performance tests on your AR and VR-based applications.
3.5 Legal and Regulatory Issues
Before you integrate AR and VR into your business processes, you must take some factors that might cause legal and regulatory hassles into account to evade them or find necessary solutions.
i) Data Privacy and Security
AR and VR applications collect large volumes of user data including location, biometrics, bank details, and social media accounts. Such sensitive information can pose serious threats if they are not handled properly or fall into the wrong hands.
Make sure that you are transparent with your users about the data you are collecting and encrypt it for better security. Conducting frequent security tests is also mandatory to keep such information safe.
ii) Intellectual Property Violations
AR and VR-based interfaces can infringe upon intellectual property like copyrights, trademarks, and patents. Your business should have a clear intellectual property policy laying out the required obligations and rights.
4. Future Trends of AR and VR in E-commerce
4.1 Mixed Reality
Mixed Reality (MR) is the process of combining the real world with digital elements. It can be described as a hybrid of augmented and virtual reality where AR imposes digital elements into the real world and builds a completely replicated environment.
MR incorporates the best of both worlds and creates more immersive experiences than either AR or VR alone. Mixed Reality can enhance existing AR and VR functions like virtual try-ons, product demonstrations, and social shopping experiences.
Sephora Virtual Artist – An Example of MR in E-commerce
Virtual Artist is an MR-based interface from cosmetics from beauty and skincare product retailers Sephora. It lets users try makeup and cosmetics on their faces virtually just by turning on the front camera on their phones. It allows them to mix and match different combinations and select the desired ones before buying.
4.2 Gamified Shopping With Metaverse
The metaverse is a virtual world based on Web 3.0 and uses AR and VR elements. It allows users to interact with each other and digital interfaces in a more intuitive way than that on Web 2.0.
For instance, users can meet up and interact in virtual spaces to work, socialize, play games, consume media, and for education purposes. The metaverse is making huge inroads into the e-commerce sector and the global metaverse-based retail market is projected to reach $201 billion by 2030 at an impressive annual growth rate of 36.62%.
Brands are using the Metaverse to design interactive games and engaging virtual showrooms that resonate stronger with the users and encourage them to make purchases. The major benefits of incorporating the metaverse in e-commerce include:
- Immersive shopping experiences
- Hassle-free transactions
- Increased customization options
- Personalized advertising and promotions
- Improved brand image, and
- Enhanced return on investments (ROI).
An Example of the Metaverse in E-commerce – Guccitown
Premium fashion brand Gucci has designed Gucci Town, a virtual world where players can explore the town, learn about Gucci’s history, and interact with other users within the game. The interface consists of games, art exhibitions, and a replicated version of the Gucci Store where they can buy apparel for their in-game avatars.
4.3 Brain-Computer Interfaces
BCI (Brain-Computer Interface) systems combine hardware and software elements to control external devices through the human brain. In simple terms, the users can control devices and their actions with their thoughts without the involvement of physical actions.
BCI systems convert brain activity to digital signals by following four primary steps, namely:
- Signal Production
- Signal Detection
- Signal Processing, and
- Signal Output.
BCIs can be highly efficient in enhancing the users’ communication and control with devices. They are especially beneficial in online medical and healthcare solutions for detecting and treating diseases and in helping differently-abled people perform daily tasks.
NeuroSky Mindwave – Real-life Use Case
The NeuroSky Mindwave Mobile EEG headset can be used to monitor brain activity and operate devices with the human mind. It is being used effectively to design e-commerce applications that enable users to browse through and shop for products with their thoughts.
With technology advancing rapidly and becoming more accessible than ever before, AR and VR are certain to play a crucial role in the e-commerce scene. Businesses that can utilize these technologies in their operations are bound to establish themselves in the ever-changing field of online retail and steer clear of the competition.
If you intend to integrate AR and VR into your online store, get in touch with us at Webgen Technologies, a reputed web development company with experience in eCommerce for over a decade. Our solutions are guaranteed to take your online store ahead of the curve.