Business transformation
How to improve company efficiency with immersive technology
Business transformation

How to improve company efficiency with immersive technology

Written by

Rod Reynolds


June 27, 2024

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For business leaders asking how to improve company efficiency, technology is often the first place they turn for answers. In the case of immersive technologies such as 3D and augmented reality (AR), those answers take the form of improved conversion rates, reduced return rates, and increased revenue per visit (RPV), making them a one-stop efficiency boon for any business looking to streamline and optimize their sales and customer engagement operations.

Making customers more likely to buy

Turning browsers into buyers is one of the holy grails for any company, the culmination of the time, effort, and investment that goes into product development, marketing, web optimization, and much more. It stands to reason, therefore, that when it comes to how to improve company efficiency, the higher the percentage of browsers a business can turn into buyers – their conversion rate – the greater the benefits to the bottom line. The more revenue generated for every unit of time and money invested in bringing a product to market, the more profitable the company.

For physical retail stores, typical conversion rates tend to average between 20-40%, while for ecommerce, they are estimated to average 2.25% globally. This reflects the difference in ease of visiting a retail store vs. visiting a website, the motivation levels of the buyer, and a host of other factors. In both cases, however, there are significant variations across sectors.  

Life size product visualizations drive purchaser confidence, boosting conversion rates | Furniture: ROCO

Furniture, for example, is estimated to have an average ecommerce conversion rate as low as 0.5%, driven, in part, by the fact that it is generally a higher-ticket, more considered purchase with a longer sales cycle. With those dynamics in mind, converting the highest possible number of potential customers takes on even greater significance, given the fact that if a browser in the sector makes a purchase from a competitor, they are unlikely to return to the market for some time.  

One of the barriers to buying furniture is the difficulty of assessing spatial and aesthetic fit, and it's here where immersive technology has a proven ability to boost efficiency, with real-world case studies providing ample data. When US home furnishings retailer Overstock added 3D and AR product visualization to its platforms, enabling customers to see how purchases would look and fit in their own spaces, the company saw conversion rate increases of up to 200%.  

This kind of impact is seen in results from a host of companies, including Shopify, which reports 3D and AR functionality boosting conversion rates by 94%, and home improvement platform Houzz.com, which saw an eleven-fold increase in conversion rates when incorporating the technology for its customers.

The reasons for this influential effect on customer behavior lie in a combination of psychology, practicality, and convenience. On an essential level, 3D and AR visualization enables customers to gain a clearer understanding of the product they are buying, both in terms of form and suitability, while being able to preview how the product will look in its intended space has evident practical benefit. This combination of transparency and utility leads to 80% of shoppers saying they feel more confident in purchasing decisions made with the help of 3D and AR.  

How to improve company efficiency: return rates

While converting browsers into buyers is one of the keys to efficiency, that is only half of the job; the other half is ensuring those sales remain final. The problem of return rates is a persistent and growing one for sellers all over the world, with merchandise worth $743 billion being returned in the US in 2023 alone – equivalent to 14.5% of all retail sales (both physical and digital). In efficiency terms, every product return represents a double hit for the seller. The first is through the opportunity cost of the lost customer; when ecommerce merchants average between two and three sales for every 100 visitors, every transaction is vital. Losing a sale after the fact, therefore, has an outsized negative impact. And, secondly, every return generates extra costs for the seller, through delivery, storage, and other logistical processes. While some of these costs may be passed onto customers, they will rarely be 100% offset, representing additional expenditure for the company to no additional benefit. What’s more, these costs fall disproportionately on furniture sellers and other retailers of large items.

Allowing customers to personalize products reduces return rates | Try a live configuration experience now | Furniture: Artefacto

It's here where technology can again play a key role in how to improve company efficiency. The data shows that implementing 3D and AR reduces return rates significantly, with Shopify reporting merchants seeing a reduction in product returns of 40% among customers who used product visualization as part of the buying process. Forbes goes further, reporting decreases in online return rates of up to 80% achieved by some firms.  

This latter statistic refers to companies who offer not only immersive visualization but real-time product configuration too, another of the key use-cases of immersive technology. In this instance, firms can enable customers to alter attributes such as color, material, finish, and more, tailoring items to their preferences and seeing the results in real time on a lifelike 3D model (which can then also be visualized in their own space in AR mode).  

This ability to personalize products goes a long way to making sales stick and therefore boosting efficiency. Not only are buyers more likely to retain purchases that have been customized to their specific tastes, the sense of agency that the design process engenders also helps generate a greater sense of attachment and anticipation.  

Maximizing customer base revenue

One way companies can drive additional revenue is by expanding their customer base. However, as new customer acquisition involves additional investment in product development, geographic expansion, sales and marketing, or some combination of all these outlays, it is neither a linear process, nor one with guaranteed results.

A potentially less risky answer to the question of how to improve company efficiency is to increase the average amount spent by customers who visit a business’ platforms. One way of measuring this is by revenue per visit (RPV) – calculated by dividing the total revenue a company generates by the number of visitors to the specified website or channel.  

Boosting conversion rates will obviously have a positive impact on this equation, due to the higher proportion of visitors making a transaction, but the second input here is spend. Even if conversion rates are unchanged, increased average spend by those who do make a purchase will result in a higher overall RPV. Going back to the fundamentals of efficiency, that again means that for every dollar spent acquiring and converting customers, firms get more back for their money.

3D and AR unlocks premium customization charges | Furniture: HMD Furniture

The was one of the key results achieved by UK sofa giant DFS when implementing its 3D and AR solution. Enabling customers to visualize more than 10,000 products from its range saw its RPV jump by 106% among customers who interacted with the tool – a significant gain that was accompanied by a conversion rate increase of 112%, resulting in a multifaceted boost to efficiency and profitability. In real terms, this means that DFS customers who used 3D and AR were more than twice as likely to make a purchase as those who didn’t, and spent more than twice as much, on average, when they did so.

How does 3D and AR fuel these gains? Again, buyer psychology is at play, as the additional confidence customers feel in purchases made using immersive technology makes them less likely to baulk at choosing higher-value products due to anxiety about fit, suitability, or having to arrange delivery of a hard-to-return item like a sofa. Research finds that 40% of buyers are willing to pay more for products they can experience through AR first. And personalization plays a role here too, with Deloitte reporting that more than 50% of consumers want to purchase customized products – with one in five willing to pay a 20% premium for them. With any enquiry into how to improve company efficiency, an obvious starting point is to give customers what they want.

Extracting maximum benefit

Efficiency is ultimately about optimizing and streamlining operations to ensure every aspect of a business – from product visuals through to customer experience – is working as hard as it can to deliver for the bottom line. Both research and real-world results demonstrate how immersive technology can deliver measurable improvements to key metrics that underpin this. For businesses embarking on the quest for efficiency gains, the journey should begin with 3D and AR.  

To find out how immersive tech can make your business more efficient, talk to an expert  

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