Tech geeks may have been salivating over the potential of augmented reality for years but it has taken the Covid-19 pandemic to spark major growth, with the market for retail, commerce and marketing set to top $12bn (£8.8bn) in the next four years as brands transform their shopping platforms into interactive customer experiences.
According to a new report from global tech advisory firm ABI Research, the pandemic-driven boom in online shopping has forced brands to embrace emerging technologies like AR and virtual stores.
Asos, one of the fastest growing online retailers which this week paid £265m to buy Arcadia brands Topshop, Topman, Miss Selfridge and HIIT, launched trials of an AR app in January. The platform is designed to help customers see how garments will fit their body type before they buy. It first started using the technology in 2019, with the launch of a virtual catwalk.
Meanwhile, Nike and Ikea have been operating AR technology for a number of years, and tech companies including Amazon, Facebook and Apple have started developing their own solutions.
ABI research analyst Eleftheria Kouri said: “The advancements in face and spatial recognition in combination with WebAR and other content democratisation efforts will be game changers for virtual try on and product preview experiences, allowing consumers to seamlessly access interactive and realistic AR content.
“Within the next two years, more and more brands will transfer their marketing campaigns and online shopping platforms from static webpages and 2D images to interactive experiences and platforms.
“Online shopping will continue to grow after the pandemic, especially in product categories supported by AR experiences such as make-up, clothing, and furniture.
“As data continues to come in supporting the success and ROI of AR/VR marketing efforts and satisfaction around user experiences, expect further investment and activity in the space as online retail and immersive content become increasingly partnered.”
The report coincides with the publication of a consumer study which reveals Brits are missing aspects of the in-store shopping experience.
The Fresh Relevance Loyalty Report 2021, conducted in collaboration with market research company Censuswide in early January 2021, reveals that 40% of shoppers miss not being able to touch and try products before making a purchase.
The report provides retailers with critical and timely insights into the wants and frustrations of online shoppers in the UK, revealing how consumers want to hear from brands and what communications they want to receive, as well as the incentives they expect in return for their loyalty.
Among the other issues that rile consumers are online stores that are difficult to navigate (38%); seeing exclusive offers aimed at new shoppers (38%); and sold-out items with no information on when the product will be restocked (34%).
The over-55s are particularly unforgiving when it comes to website frustrations. Almost half (48%) would consider not purchasing if the online store is difficult to navigate. Meanwhile, under 24s value a smooth mobile experience, with 22% stating they would abandon a retailer whose mobile site does not function well.
The top customer “must-haves” for online retail in 2021 include getting brands to highlight spending thresholds that unlock an incentive (34%); product ratings and reviews (30%; highlighting important order cut-off dates (28%; recommending complementary products (24%); and help with imagining how the product will look in real life (20%) – a key feature of AR technology.
Fresh Relevance CEO and co-founder Mike Austin said: “When it comes to fostering customer loyalty, convenience, personalised communications and targeted incentives are key. Consumers want to sail smoothly through the customer journey and are unforgiving when it comes to frustrating online experiences. With a significant proportion of shoppers missing certain aspects of the in-store experience, ecommerce businesses who can bring the strengths of offline shopping online are more likely to encourage loyalty.
“Tactics such as user-generated photos and product ratings as well as augmented reality features help bring products to life at home. Personalised product recommendations, onsite pop-ups and chatbots can replicate the role of an in-store salesperson, providing guidance along the purchase journey and helping shoppers find the products that will resonate with them easily.”
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