Augmented Reality as a Sales Driver | MEEDIA

It is well known that virtual try-on with augmented reality is a nice additional feature and can possibly trigger more sales. A current study by Snapchat shows how strong this effect actually is on target groups between 15 and 25.

The proportion of online sales that are concluded directly via social media will increase dramatically in the coming years. That describes a study by Accenture from January 2022. In just three years, the sales volume will more than double. Market researchers estimate that from $492 billion in 2021 to $1.2 trillion in 2025. That’s three times faster than one e-commerce has grown.

Half of the world’s population will be using AR systems by 2025, says a 2021 study by Deloitte Digital

Generation Z, i.e. the people who are between 12 and 27 years old today, will be the main driver of this growth in the coming years. This is characterized by not being very loyal to brands and retailers. Above all, the customer experience on the web must be right. In a Sitecore study, 74 percent of respondents stated that they had no problem finding another supplier online if a product was not available. 57 percent of users said they felt less committed to brands than they did before the pandemic.

Social as technology driver

So the first shot has to be right when it comes to Gen Z. Only a third of users say brands and retailers will be given a second chance if something doesn’t work. A failure would be fatal: 64 percent of those surveyed in the Sitecore study want to buy “almost everything” online even after the end of the pandemic.

And Snapchat now claims to have identified one of the key sales drivers: augmented reality. It’s essentially the virtual try-on that’s all about. But also “playing around” with a product in an AR environment creates a better connection between user and brand. At least that’s what 48 percent of respondents said in a recent Snap study.

Snap does not leave out exactly who was questioned. But the survey took place in the form of a 15-minute online survey. This could suggest that these are all Snapchat users and that there is a slight bias compared to the representative population. But the sample size is acceptable: 16,000 users were surveyed throughout November. The survey took place simultaneously in 16 countries, including Germany.

Augmented Reality ensures sales

A whopping 88 percent of the users surveyed state that they are interested in using augmented reality in the purchasing process. 60 percent find that AR enables a “more personal user experience and more than half say they also pay more attention to ads that work with AR.

If it is really only about Snapchat users, the study should be treated with caution. Since Snapchat has been the strongest platform for AR applications for years and the “Lenses” are part of the usual usage scenario, this user group has a “warm start”. Other platforms like Youtube. Facebook or Instagram, which are also doable with AR applications, have not managed to leave a similarly strong footprint in recent years.

But the bottom line is that it’s still relevant, because after all, Snapchat has 319 million users, which is 50 million more than a year ago.

In addition, AR can be seen as a precursor to the Metaverse. So it’s high time for brands to gain experience with immersive advertising media and product presentations. This does not have to happen in Snapchat, it can also be done at the POS or in the cinema.

You need practical examples for the use of AR. Here you are:

Just like the cosmetics manufacturer MAC with its brand Ulta Beauty. The company was among the pilot testers selected by Snapchat to test a new Lens in January. According to its own information, the Lens achieved six million dollars in sales. The catalog-powered lens allows multiple products to be virtualized in one application. The user can therefore try on several dresses without having to change the Snapchat filter. The inclined home furnisher can hold the smartphone to a corner of the room and swipe through the lens in such a way that one sofa after the other appears virtually in the room.

Marcus Veigel, Managing Director of Cynapsis Interactive and Augmentify, analyses: “AR actually offers a particularly emotional shopping experience. That is why AR-based solutions in e-commerce not only have good prospects for Gen Z, but will also be used extensively by other age groups in the future. As is so often the case, this is directly related to the added value that AR offers in this specific case”.

Of course, the simulation counts as added value if it is easy to use. “This makes it all the more important for brands to establish contact,” adds Götz Trillhaas, Country Manager for the DACH region at Snapchat.

The better alternative

Of course, the AR simulation cannot keep up with a real product fitting. Texture and haptics fall by the wayside. But the technology is sort of a second-best solution, with exciting benefits:

  • Less time than visiting a store
  • No associated travel and CO2 costs
  • privacy
  • 24/7
  • No assortment limitation

The last two points are of course particularly important for retailers and brands. “Manufacturers get the opportunity to demonstrate their entire product range. The customer experience is not limited to individual products and product variants that can be exhibited by a local reseller,” Veigel continues.

With a bit of luck – and good technical implementation – the return rate, the great sword of Damocles in online retail, will even drop. That would also be a blessing in terms of CO2 reduction and sustainability.

All these criteria also apply to virtual reality. H&M and Adidas announced last week that they are setting up retailer showrooms in VR to make products more available. The difference to AR, however, is that the setup for the users is much more complex, the entry hurdle is higher and the potential range is therefore lower. In B2B you can possibly afford that, for B2C it would be fatal.

And at the same time, the manufacturing effort for the application is much greater. While both AR and VR ideally need 3D data of products, while the AR lens can be ready in a day in Snapchat’s own Lens Studio, a well-crafted VR environment takes weeks to implement.

The Metaverse could help here at some point, namely when virtual department stores offer a ready-made showroom environment that can be adapted to the 3D product images with just a few clicks. But it will probably take longer until then than until 2025.