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Amazon Home Thrives Off AR Innovation, Pandemic Purchases

E-commerce retailers have been in the midst of a nearly two-year-long boom since the onset of the Covid-19 pandemic forced many consumers to shop from home. That has certainly been true for Amazon. And while business has long been good for the online behemoth, its home arm has only just come into its own, thanks to a combination of the pandemic and the company’s investment in digital tools to improve the online shopping experience.

“In 2019 customers were often unaware that we sold home products on Amazon,” said Eva Lorenz, director of home categories for Amazon. “Now they’re fully aware, and they’re also aware of our digital tools to help them.”

One of those tools is the augmented reality-powered feature “View in Your Room,” which lets customers virtually place items in their spaces.

“Twenty-three percent of Amazon shoppers use augmented reality in our tools,” Lorenz said. “We’re seeing how these technologies are becoming vital to customers when making purchases for their home.”

Robust imagery has been an important part of Amazon Home’s growth, as well. Lorenz said 85 percent of Amazon customers place more emphasis on imagery than text descriptions when shopping for furniture.

“Customers are now relying much more on product visualization with high-quality images showing the product in a variety of angles and situations to help them understand non-visual attributes like feel and comfort,” she said.

Lorenz said Amazon has conducted numerous studies on customer preferences, and the No. 1 factor important to them when shopping online for home furnishings is knowing the product will fit in their home—not only in terms of physical footprint, but also in style.

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And when they find an item that fits, more than one-third of the company’s customers are willing to make a greater investment to get quality furniture.

“Customers say they’re willing to pay more for that perfect piece that meets all of their needs,” she said. “Thirty-two percent of Amazon customers say they will aways pay more for higher-quality furniture, and these quality-seeking customers on average spend twice as much on furniture than price-conscious shoppers in our store.”

Lorenz said another trend the company has identified is that once customers make an initial purchase, they’re more likely to make what Amazon calls “cascading purchases”—buying additional pieces after a new item sparks the need to upgrade other areas in the home.

“Once customers make their first purchase with Amazon Home, we see additional cascading purchases,” she said. “This pace of cascading can be fast, and what we find is after their first home purchase, within 11 days there’s a follow-up purchase in our store.”

And while Amazon is known for its two-day Prime shipping that has conditioned consumers to receive online purchases quickly, Lorenz acknowledged that particularly in the home category, the company hasn’t been immune to supply chain issues and shipping delays. She said most customers understand that furniture will take longer to reach their homes, but at the same time, Amazon has leveraged its vast logistical network to push delivery times.

“Operations has been especially important over the past two years,” she said. “We truly learned the importance of multiple sourcing channels with direct import and direct fulfillment. Customers want their products fast, they want a seamless delivery experience, they want it self-service, and they want to be able to track their product with real-time updates.”

While the pandemic has certainly brought its share of challenges to Amazon, it ultimately has been a game-changer for the retailer’s home business.

“The past two years at Amazon have been unprecedented for us,” she said. “Our homes have become a sanctuary through this period, and that’s an opportunity for brands to really help customers create a sense of comfort and consistency among a population we believe is looking for solace.”