It’s easy to think of augmented reality (AR) and 3D imaging as futuristic concepts, technology that time-poor business leaders are aware they need to integrate into their companies, just not right now. But rapid advances in AR and its increased adoption, coupled with changing consumer behaviour, mean it’s time to lay that misconception to rest.
From Pokemon Go to Snapchat lenses, consumers already interact with AR on a regular basis. And it’s no longer just an entertainment technology; AR/3D is impacting sectors from manufacturing to education, and revolutionising e-commerce - changing how consumers expect to interact with brands whilst influencing purchasing decisions, increasing conversion rates and providing a wealth of new data insights for companies to utilise. Here’s why businesses are investing in AR so readily.
AR will pervade our entire lives.
- <Tim Cook, CEO Apple>
What is augmented reality?
AR technology superimposes digital information onto the users’ physical environment, enhancing or augmenting their perception of the world around them. Most commonly this involves rendering images onto the users’ surroundings, via their smart device - but companies are already experimenting with overlaying additional elements, such as audio and GPS.
Current applications vary widely by sector. In healthcare, AR allows surgeons to practice difficult or dangerous procedures before entering the operating theatre, while in architecture and design, AR can help professionals visualise the final product during the creative process, allowing them to step inside their room or building and even make virtual changes on the spot.
From logistics to advertising, companies are pioneering new ways of working using AR, so it’s no surprise 75% of business leaders anticipate using AR and associated technologies by 2023 |1|.
Augmented reality in e-commerce
While the use of AR is diverse and widespread, e-commerce is one of the business sectorswhere its benefits are being most acutely exploited. Consumers can try on jewellery, clothing and sunglasses just by looking at their smartphones, and render a potential new sofa or TV in their living room, to check for style, colour and fit, straight from the retailer’s website.
The Covid19 pandemic has amplified the advantages offered by AR. With shops shuttered worldwide and consumers prevented from physical interaction with products, being able to offer customers the option to virtually try, explore and visualise purchases in their own homes has been a boon for retailers. But the increasing proliferation and adoption of AR is more than just a response to extraordinary times.
In a 2019 Nielsen global survey, consumers were already listing augmented and virtual reality as the top technologies they were seeking to assist them in their daily lives, with 51% saying they were willing to use AR/VR to assess products |2|. Given that IBM estimates the pandemic has accelerated the shift to digital shopping by roughly five years |3|, it’s easy to see why the Harvard Business Review concludes, “Once a nice-to-have feature, AR has quickly become an essential technology for retailers |4|.”
Consumer behaviour and AR
The value of global e-commerce sales is forecast to reach $4.9 trillion by the end of 2021 |5|, representing 20% of all retail sales worldwide. For businesses fighting for a share of this lucrative market, where should AR fit into their e-commerce strategy? The answer, as far as consumers are concerned, is right at the heart of it.
78% of people surveyed said AR is a fun way to interact with brands, while 74% said AR can bridge the gap between the online and offline worlds |6| . Given consumers' evident appetite for the technology, it is perhaps no surprise that numerous case studies show an increase in customer engagement with products where AR visualisation is offered.
Furthermore, research suggests AR is no longer an optional extra. 75% of consumers surveyed said they now expect an AR experience when shopping online, with 61% preferring to make purchases on sites that offer AR functionality |7|. With retailers reporting instances of conversion rates doubling or even tripling for products where AR is used |8|, it becomes strikingly clear that those not investing to meet consumers’ expectations risk being left behind.
Augmented reality success stories
- Home Depot reported that its product visualisation feature boosted conversions 2x - 3x compared to those who did not use the technology |9|.
- US retail giant Macy’s reported return rates dropped to <2% for furniture purchases made using its AR/VR visualisation feature (compared to 5-7% industry average) |10|.
- Samsonite-owned eBags reported a 112% increase in mobile conversions, and 81% on PC, when consumers interacted with 3D/AR-enabled products, boosting revenue per visit by 87% |11|.
Looking to the future
Global spend on AR and VR is projected to increase sixfold by 2024, while the technology that enables it will become ever less intrusive as manufacturers harness synergies with emerging trends like wearables.
The major players in Silicon Valley have all expanded their investments in AR, with Google already incorporating AR in its search results and Facebook rumoured to be developing an ARenabled smartwatch. Perhaps most importantly, Apple is expected to release dedicated AR devices as soon as 2022; with their track record in popularising consumer tech, it seems likely the adoption of AR will only accelerate.
“By 2030, we will be able to enter digital environments that appear completely real to all our five senses.”
- <Ericsson Consumer Lab>