As e-commerce continues to become the go-to medium for consumers, shoppers’ expectations are expanding. It’s not enough to be able to browse and buy online—they’re looking for immersive experiences that bring products to life, new research shows.
Tools have emerged that stand to more clearly illuminate the consumer’s path to purchase, according to a report from Snap Inc., Publicis Media and French market research consultancy Alter Agents. The Snapchat owner and its partners surveyed 4,028 shoppers under the age of 50 who have used augmented reality (AR), like product visualization or virtual try-on, while shopping. The firms asked consumers in the U.S., U.K., France and Saudi Arabia to document their experiences with the technology, which infuses digital elements into a live, real-world setting.
AR might allow mobile shoppers to view a luxury handbag on their dining room table or a pair of shoes on their feet, for example. The study’s findings show that these innovative technologies are poised for rampant growth, with many consumers now pointing to AR as “the future of shopping.”
Virtualized experiences stand to have a marked impact on apparel sell-through, with 74 percent of respondents saying they would be more likely to purchase clothing after using an AR experience going forward. Seventy percent said that AR could sway them to purchase more retail products across the board. Snap Inc.’s study values AR technology at a whopping $1.2 trillion by 2030, as it “is fast-becoming a necessity in every brand’s omnichannel roadmap.”
The retail tech has “continually proven its value for shoppers as a way to show how a brand or product can fit within their lives,” according to Helen Lin, chief digital officer at Publicis Groupe. Virtual try-on and 360-degree product demonstrations decreased the need for in-person transactions by 25 percent as surveyed shoppers felt more informed and confident in their web purchases.
The industry at large is buying in. 3D and interactive AR provider Avataar announced that it raised $45 million in Series B funding in January to launch and scale its plug-and-play e-commerce solution, SuperNova. Debuting this summer, the one-click integration serves retailers using e-commerce platforms like Shopify, the San Francisco and India-based group said.
The platform enables e-tailers to swiftly and conveniently create full catalogs of virtualized products using patented scanning technology. SuperNova also allows clients to take advantage of user data, as it monitors the way that shoppers engage with 3D products while browsing their sites.
“E-commerce brands and retailers benefit from AR by using the technology to support the consumers’ purchase decision, which results in an increase in conversions,” chief product officer Gaurav Baid added. Avataar has been working with some of the world’s largest e-commerce marketplaces, and aims to see SuperNova’s adoption across brands and retailers of all sizes.
Toronto, Canada-based Nextech, a purveyor of AR experience tech services, recently announced the closing of multiple 3D-modeling deals for e-commerce players across categories. The group’s clients include Kohl’s, CB2, Crate and Barrel, and a Shopify integration supports 3D AR for a number of products for Tory Burch and Habbitt Furniture.
The company plans to announce new applications for Shopify and WooCommerce in the coming weeks, CEO Evan Gappelberg said, noting that Shopify merchants using Nextech’s ARitize 3D platform have experienced 93 percent higher conversions and a 40-percent reduction in returns. “We firmly believe that the transition from flat 2D photos to 3D models is now in full swing,” with AR visualization technology “currently being established as the standard in e-commerce.”
“Companies who don’t adopt a 3D/AR e-commerce strategy will be left behind,” Gappelberg added. The executive pointed to Amazon’s rollout of virtual try-on technology for sneakers, noting that the marketplace’s decision will provide ample opportunity for companies like Nextech. “All the brands announced including New Balance, Adidas, Reebok, Puma, Superga, Lacoste, Asics, and Saucony will need to be converted into a 3D models to be used in Amazon’s ‘try on,’” he explained.
Shoppers using Amazon’s iOS app will find a “virtual try-on” button beneath the main image on a sneaker product page, the company said, and clicking it with the mobile device pointed at their feet allows them to visualize the shoes in their real-life setting. They can switch up color ways and capture photos, too—convenience-enhancing experiences that the company believes will sway shoppers to click “buy.”
Not only does AR drive sales—it could be the key to addressing one of the fashion industry’s biggest pain points: returns. Snap, Publicis and Alter Agent’s survey data showed that AR use increased shoppers’ surety about their online purchases by 80 percent. “Think about the impact this could have on customer service, supply chain, and overall sustainability,” Publicis’ Lin said.
The issue of unwanted or over-ordered merchandise stands to rise with the continued growth of e-commerce. A survey of 57 retailers released in January by the National Retail Federation (NRF) showed that for every $1 billion in sales in 2021, the average retailer incurred $166 million in returns. Online sales accounted for $1.05 trillion of total U.S. retail sales last year, $218 billion of which were returned.
Meanwhile, spring earnings reporting from British retailers Asos and Boohoo showed both fast fashion titans have been mired in returns that have cost them significant profits during the recently ended quarter. The news came on the heels of Spanish competitor Zara’s newly implemented return fee, designed to discourage give-backs. The initiative was met with instant backlash. Shoppers will now be charged a little over $2 for mail-in returns, though Zara will still take back items in store for free. Last year, Uniqlo began charging e-commerce consumers $7 to cover the cost of return shipping on unwanted orders.
Making returns easier could curb bad behavior
Shoppers don’t always request returns because they’re unsatisfied with the merchandise they’ve purchased. In fact, a new study conducted by returns provider Narvar suggests that many consumers are either actively trying to game the system or take advantage of loopholes in return policies.
A survey of more than 2,100 U.S. and U.K. adults who returned at least one purchase over the past six months showed that only 35 percent abide by return guidelines set by retailers. Meanwhile, 60 percent copped to bending the rules out of convenience, like not reporting receiving an extra item or shipment or designating an untrue reason for a return. One-quarter of those surveyed said they intentionally take advantage of returns policies for monetary gain, falsely claiming that an order is damaged or missing. An equal number admitted to wardrobing, or purchasing garments to wear once or twice with the intention of returning them afterward.
While more American shoppers tend to bend the rules than their U.K. counterparts, Narvar characterized British shoppers as more “vengeful.” Nearly one-third of consumers across the pond said that poor service from a retailer justified fleecing them for a return, while 23 percent of U.S. shoppers said the same. What’s more, nearly 60 percent of respondents who admitted to exploiting retail returns policies reside in the U.K. However, the U.S. buyers who abuse returns policies are more active.
Inconvenient returns experiences actively deter shoppers from doing the right thing, the company believes. “By understanding the different types of problematic behavior associated with returns—and their deterrents—retailers can more easily solve the biggest pain points in their current returns processes and personalize the experience to curb further issues,” Anisa Kumar, Narvar’s chief customer officer, explained. “By adding some additional checkpoints to the process, personalizing the experience, and offering the right loyalty incentives, retailers can prevent a significant amount of revenue loss associated with returns.”
Returns are a hassle, 40 percent of respondents agreed, noting that if services like home pickup, boxless returns or nearby drop-off points were offered, they would be more likely to comply with retailers’ rules. About 60 percent said that it’s easier to take advantage of policy loopholes online, where shoppers are not often asked for proof that a return is necessary. According to Narvar, retailers should require a photo to prove that an item is damaged, or steer suspicious returns to a store location whenever possible. Forcing would-be returners to process the transactions online, instead of providing a return label in box, can help retailers catch more ineligible items.
Just 15 percent of respondents said that solutions like these would not deter them from continuing to make questionable decisions regarding returns, Narvar said, meaning that enacting such measures could potentially change the behavior of 85 percent of shoppers.