How Augmented Reality Can Improve Ecommerce Conversion Rates

Augmented Reality (AR) is transforming the world of DTC ecommerce by allowing customers to see and interact with products in their own environment. But AR ecommerce is not just enhancing the shopping experience—it’s also driving significant increases in sales and conversions.

In this article, we’ll explore how augmented reality in ecommerce is revolutionizing online shopping for DTC industries. From virtual try-ons in fashion and cosmetics to visualizing furniture in your home, AR is giving customers more confidence in their purchases and encouraging them to buy more. We’ll examine the data-backed benefits of AR and share real-world examples of how ecommerce brands are using this technology to boost their conversion rates, revenue, and sales.

What is Augmented Reality in Ecommerce?

Augmented Reality (AR) is a technology that overlays digital information—such as images, sounds, or text—onto the real world. This creates an interactive experience where customers can see and interact with virtual elements in their physical environment using their smartphones or tablets.

Unlike Virtual Reality (VR), which immerses users in a completely digital environment, AR enhances the real world with digital overlays, allowing users to remain aware of and engaged with their surroundings.

AR is being used across various DTC ecommerce sectors to improve customer experience and boost sales. Brands ranging from Nike to Ikea and Sephora to Warby Park are all leveraging AR technology to nudge their shoppers toward a purchase.

This technology not only boosts customer confidence in a purchase but also drives higher engagement and sales. According to TechJury, by the end of 2024, there will be 1.73 billion mobile AR users, indicating the growing importance and potential of AR in ecommerce.

Benefits of AR for DTC Brands

Enhanced Customer Engagement

By allowing customers to interact with products in the real world, AR creates a more immersive and engaging shopping experience.

For example, brands like Nike use AR to let customers customize and virtually try on shoes through apps like Snapchat.

This not only makes the shopping experience fun but also keeps customers engaged longer, increasing the likelihood of a purchase. According to a study by Mindshare, AR ecommerce experiences are 200% more engaging than their non-AR counterparts. 

This heightened engagement can lead to more time spent on your site and a higher chance of converting visitors into buyers.

Improved Product Visualization

Allowing customers to see products in their environment helps them understand how items will fit and look in their space. This is particularly valuable for industries like home décor and furniture. 

For instance, IKEA’s AR app lets customers place virtual furniture in their homes, ensuring the size, color, and style match their existing decor, resulting in a reduction in their overall return rates.

Reduced Return Rates

AR helps customers make informed purchase decisions by providing a realistic view of products before they buy, reducing the likelihood of returns, as customers are more confident that the product meets their expectations. For example, Sephora’s Virtual Artist app allows customers to try on makeup virtually, helping them choose the right products and shades, which reduces the chances of returns.

According to a study by Power Reviews, 56% of consumers returned items because they were not as described. By using AR, brands can significantly cut down on these returns. 

Increased Sales and Conversions

When customers can interact with products in a realistic way, they are more likely to feel confident about their purchase decisions and complete the transaction.

A study by Deloitte found that customers using AR for shopping are 30% more likely to make a purchase. Additionally, Harvard Business Review reports that AR can lead to a 20% higher conversion rate by reducing hesitation at the checkout point. 

This means that integrating AR into your ecommerce strategy can directly contribute to increased sales and revenue.

Implementing AR in Your DTC Strategy

Choosing the Right AR Technology

There are several AR platforms available, each offering unique features tailored to different needs. 

ARKit (Apple) and ARCore (Google) are powerful AR platforms for developing mobile applications. Vuforia is ideal for creating AR experiences across various devices and industries. Wikitude offers robust AR development tools for both mobile and smart glasses. 

When choosing AR technology, consider factors like compatibility with your existing systems, ease of use, cost, and the ability to scale. It’s crucial to select a platform that integrates seamlessly with your ecommerce site and provides a smooth user experience.

Creating AR Content

Creating engaging AR content is crucial for enhancing the shopping experience and driving higher conversions. Here’s how DTC brands can develop various types of AR content effectively:

3D Models: 3D models provide detailed representations of products that customers can view from different angles. High-quality 3D models are essential for an immersive AR experience.

• Software to Use: Popular tools for creating 3D models include Blender and Autodesk Maya. These programs allow you to create detailed and realistic models.
• Tips for Development: Ensure your 3D models are highly detailed and accurate. Use real-world textures and precise dimensions to make the virtual product as close to the real thing as possible. 

AR Filters: AR filters are interactive overlays that add virtual elements to the real world. They can be used to enhance the visual appeal of products and make the shopping experience more fun.

• Software to Use: Platforms like Spark AR (by Facebook) and Lens Studio (by Snapchat) are excellent for creating AR filters. These tools are user-friendly and offer a variety of templates and effects to get started.
• Tips for Development: Keep the filters interactive and engaging. For instance, a makeup brand can create filters that allow users to try on different looks. Ensure that the filters work smoothly on different devices and provide a seamless user experience.

Virtual Try-Ons: Virtual try-ons allow customers to see how products like clothing, makeup, or accessories will look on them. 

1. Software to Use: Modiface (owned by L’Oréal) and Perfect Corp’s YouCam Makeup are popular platforms for virtual try-ons. For fashion, Zeekit (now part of Walmart) offers virtual fitting room solutions.
2. Tips for Development: Focus on creating realistic try-on experiences. Use accurate measurements and high-quality images to ensure that the virtual try-ons closely mimic the real-life experience. Additionally, integrating AI can help provide personalized recommendations based on user preferences.

Integrating AR into Your Ecommerce Platform

Here are some technical considerations for seamlessly integrating AR features into your ecommerce platform:

• Compatibility: Ensure your AR solutions work across various devices and browsers to reach a broader audience.
• Performance: Optimize AR features to load quickly and run smoothly without slowing down your website.
• User Interface: Design a user-friendly interface that makes it easy for customers to access and use AR features.

Marketing Your AR Features

Here are some effective strategies for promoting your AR capabilities to drive awareness and usage:

• Social Media Marketing: Showcase your AR features on platforms like Instagram, Facebook, and Snapchat, where users are already accustomed to interactive content.
• Email Marketing: Highlight AR features in your email campaigns to encourage customers to try them out.
• Influencer Partnerships: Collaborate with influencers to demonstrate your AR experiences, reaching their followers and building credibility.

Industry-Specific Examples

• Fashion and Apparel: Warby Parker’s virtual try-on feature allows customers to see how different styles of glasses look on their faces using their smartphone cameras. Similarly, Nike’s AR shoes, available through apps like Snapchat, enable users to customize and virtually try on sneakers before purchasing. These apps cause customers to spend more time exploring different options, which means they are more likely to complete a purchase.
• Beauty and Cosmetics: Sephora’s Virtual Artist and L’Oréal’s Makeup Genius allow customers to try makeup on virtually, helping them find the perfect shades and products. This reduces the uncertainty associated with online makeup purchases.
• Home Décor and Furniture: IKEA’s AR app and Wayfair’s “View in Room” feature allow customers to place virtual furniture in their homes to see how it fits and looks in their space. These AR features make it easier for customers to ensure the size, style, and color of the furniture match their existing décor.
• Tech and Gadgets: Apple’s AR Quick Look and Samsung’s AR demos enable customers to view 3D models of tech products in their real environment. This helps customers understand the size, design, and functionality of tech gadgets.

Challenges and Considerations

Technical Challenges

• Ensuring Compatibility Across Devices: Customers use a wide range of devices, from smartphones and tablets to laptops and desktops, each with different operating systems and hardware capabilities. To provide a seamless AR experience, develop solutions that work flawlessly across all these devices. This may require extensive testing and optimization to ensure consistent performance and functionality.
• Handling Large Data Files and Maintaining Performance: AR applications often involve large data files, such as 3D models and high-resolution images, which can impact the performance and loading times of your ecommerce platform. Using techniques like lazy loading and data compression can help manage large files.

Cost and Resources 

• Budgeting for AR Development and Implementation: Developing and implementing AR solutions involves costs related to software development, purchasing or licensing AR platforms, creating high-quality 3D content, and ongoing maintenance. Partnering with experienced AR development companies can help manage costs and ensure a successful implementation.
• Assessing ROI for AR Investments: To justify the investment in AR technology, it’s important to assess the return on investment by tracking key metrics like engagement rates, conversion rates, and sales figures before and after implementing AR features.

User Adoption and Accessibility

• Overcoming Barriers to User Adoption: Not all customers are tech-savvy, and some may be hesitant to use new technologies. Educating customers about the benefits of AR and providing easy-to-follow instructions can help overcome these barriers. 
• Ensuring Accessibility for All Users: Ensuring that AR features are accessible to all users, including those with disabilities, demands designing AR experiences that comply with accessibility standards and can be used by people with varying abilities. For example, providing alternative text for visual elements and ensuring that AR applications are navigable with screen readers can help make AR more inclusive.

Future Trends in Augmented Reality in Ecommerce

AR is poised to revolutionize the ecommerce industry by providing more immersive and interactive shopping experiences. As mentioned, there will be an estimated 1.73 billion mobile AR users by the end of the year.  

As AR becomes more mainstream, we can expect to see it integrated into various stages of the customer journey, from product discovery to post-purchase support.

Furthermore, several emerging technologies and innovations are set to shape the future of AR in ecommerce:

• 5G Connectivity: The rollout of 5G networks will significantly enhance AR experiences by providing faster data transfer speeds and lower latency. 
• Artificial Intelligence (AI) Integration: Combining AI with AR will lead to smarter and more intuitive AR experiences. AI can analyze customer data to offer personalized AR interactions, such as virtual try-ons that recommend products based on past purchases and preferences.
• Wearable AR Devices: While AR is currently most accessible through smartphones and tablets, the development of wearable AR devices, such as smart glasses, will make AR more integrated into everyday life. 
• WebAR: Web-based AR (WebAR) allows users to access AR experiences directly through their web browsers without the need for a dedicated app, lowering the barrier to entry for consumers and making AR more widely accessible.

As more brands adopt AR, it will become a standard expectation for consumers, similar to how high-quality images and detailed product descriptions are today. It’s clear that AR technology will become an essential component of successful ecommerce strategies. 

Brands that fail to incorporate AR into their ecommerce strategies will soon fall behind competitors who embrace this new technology.

About the Author: As the Director, Marketing at adQuadrant, Nick Grant leverages more than 20 years of experience working across a variety of tech verticals. Nick grew up in California and earned his BS in Business with a concentration in Entrepreneurship. After college, he relocated to Seattle to pursue his passion for startups, where he worked at various dot-coms before co-founding a successful visual strategy agency in 2010. Now back in California, Nick spends his time hiking around San Luis Obispo County with his wife and son, honing his talent as a concert photographer, and perfecting his handstand skills.