Benefits of AR for Online Sellers: Exploring Innovative Ways to Maximise Business Profits with AR Technology

The retail industry is going through rapid changes. The rise of e-commerce and digital marketing has given consumers more control over what they buy and how they buy it. According to Grand View Research, the global e-commerce market is expected to grow at a compound annual growth rate (CAGR) of 14.7% from 2020 to 2027. With such promising growth predictions, many retailers and brands are looking for ways to improve their bottom line with innovative technologies. One of those technologies is augmented reality (AR), a market expected to grow by 40.9% CAGR from 2022 to 2030.

What is augmented reality?

Augmented reality is a technology that adds digital images to real-world settings, creating a more immersive experience for users. This technology can be accessed on smartphones, tablets, or other devices equipped with cameras or sensors. The term “augmented” implies that these digital overlays do not completely replace the natural environment but rather enhance it for better understanding.

AR can be used for gaming apps and entertainment purposes; education (for example in museums); retail (shopping for clothes online); travel planning; home improvement projects; and many more. But perhaps one of its most exciting applications lies within e-commerce, where AR can help to increase sales by offering customers an immersive shopping experience unlike anything seen before.

Why should online retailers consider using AR?

AR technology can be a great way to increase customer engagement levels and improve conversion rates: It enables customers to interact with products in real-time and see how these products might fit into their lives, thus potentially helping to boost sales and reduce return rates. AR can provide an engaging experience for shoppers who are unable to visit physical store locations because of distance or time constraints – or even if they live nearby – by giving them access to products through their mobile devices or computers.

There are many ways businesses use AR today, from helping visualise furniture placement to improving customer service experiences by showing wait times at restaurants during busy periods such as lunchtime hours. For instance, if customers want to see how a sofa would look in their living room before buying it, AR technology can enable them to place it directly in their home environment. Similarly, customers can get an idea of how certain clothes would look on them using AR, before making a purchase decision. This way, AR can help reduce returns, as shoppers are less likely to be dissatisfied due to wrong sizes or measurements upon receiving their package deliveries at home.

There have been several studies that suggest that implementing AR technology has substantial benefits for online retail businesses. According to a study by Shopify, products with 3D models and AR content had a 94% higher conversion rate than products without, while SeekXR reported a 25% decrease in returns from AR-guided purchases. Meanwhile, a study by NielsonIQ showed that 56% of online shoppers who used AR technology felt more confident about the product quality and 61% said that they preferred shopping with retailers that offer AR experiences.

With regards to customer engagement and satisfaction, Kellog Insight found that AR increases purchases from less-established brands and customers who used AR as part of their mobile-app shopping experience spent 20% more time browsing and browsed nearly 30% more products. Around 40% of shoppers were willing to pay more for a product if they could experience it through AR, while shoppers perceived brands that use AR technology as more innovative than those that do not. In addition, according to a Gartner study, AR technology can lead to increased customer loyalty and repeat business.

How to implement AR in your business?

AR allows customers to see and interact with virtual objects in the real world, providing new possibilities for e-commerce retailers who want to explore innovative ways of maximising their profits. But the application potentials of AR technology are not only limited to product visualisation: AR can also be used to provide a better understanding of how something works – think virtual prototypes or product walkthroughs – or to create an interactive and immersive customer experience that makes shopping more fun.

While there are many benefits associated with incorporating AR into the online retail business model, there are also potential challenges that come along with it. As with any new technology, there needs to be sufficient planning beforehand so that any potential issues can be identified before they become problems down the road – or even worse: actual roadblocks preventing progress altogether. Common pitfalls may include:

• “Big-bang launch” vs. “learn-as-you-go”: Only few e-shops will benefit from launching AR for their entire product catalogue. Most e-shops will benefit from starting with their top-selling products to test the waters and gain experience before making AR an integral part of their digital marketing strategy.
• Simple tools: Many online shops have limited resources, so they should consider using AR-enabling tools that are easy to implement and do not require extensive coding by their own staff.
• Budget control: When considering using AR for the first time, it is essential to start small and test how shoppers react to the new technology before increasing spending on this channel.
• Product image library: Online sellers should start building a library of product images that can be used to create AR models before launching the technology. When using third-party AR tools, it is essential to ensure that it supports all relevant products and categories.

Conclusion

There are plenty of ways for retailers to effectively utilise AR to their benefit, including integrating AR into their online shop, website, and social media channels. The first step is to decide which product will be most relevant for their target audience and how to best present it.

Some products, such as furniture, clothing, and accessories to cars and construction equipment, lend themselves more naturally than others. Sellers of these products should consider creating an e-commerce page that allows users to interact with 3D models directly through a web browser via their mobile phones or computers, without the need for special software.

With the growing popularity of smartphones, AR technology has become more accessible than ever and is without a doubt the future of online selling.

This article was written by Alfons Futterer, Co-Founder of TrackMatriX Technologies Limited and Managing Director of NanoMatriX Technologies Limited, a corporate member of GCC. TrackMatriX Technologies in cooperation with large e-commerce platforms has developed the MatriX Digital Asset Hub™. Visit www.matrixaugmented.com to learn more.