How AR Will Revolutionize the Future of Retail

From speeding conversions to reducing returns

With inflation rising and consumer spending declining, retailers need new and more cost-efficient ways to improve the shopping experience, make shopping more convenient and streamline the purchase process.

The immersive experience of augmented reality (AR) is a clear solution. Using the smartphone camera, consumers can use AR to place and interact with a digital replica of a product in their physical space. This enables brands to provide an extremely personal and intimate online shopping experience that aims to increase conversions and reduce return rates.  

Let’s take a look at how AR can be used across the retail experience.

Increase sales and conversion rates

Brands that have embraced AR have seen a significant impact to their bottom line. In fact, studies show that consumers are willing to pay as much as 40% more for a product that can be experienced through AR. Using AR gives customers the confidence to buy, increases their post-purchase satisfaction and reduces return rates.

For example, Rose helped bring Bloomingdale’s 150th Anniversary Collection to life using 8th Wall web-based AR. Over 400,000 households received AR-activated catalogs that made the celebration-worthy exclusives jump off the page and into real life. Customers could scan AR-enabled pieces within the catalog to see how they looked and moved in real life, and they could click to purchase within the experience. This initiative led to a 22% higher conversion rate to shop and a 38% higher engagement rate.

Reduce returns and costs

A high rate of returns is a persistent challenge for ecommerce businesses. But two-thirds of consumers are less likely to return a product after using an AR feature to try before they buy, according to an Alter Agents survey.

This can save brands significant amounts in return processing, restocking and shipping costs.

Online art gallery Saatchi Art, for example, launched a web-based AR feature called “View in My Room,” which let customers see what over a million works of art looked like in their home before buying online. According to Saatchi Art, consumers who purchased art using the feature spent on average 17% more than those who purchased without it. Additionally, Saatchi Art found that consumers who used “View in My Room” were four times more likely to convert than those who did not.

Designed by AR design firm Rock Paper Reality, “View in My Room” was made with scalability in mind. Each art piece was dynamically scaled based on the artwork’s metadata and deployed into AR on a 3D canvas with the approximate real-world dimensions of the physical artwork. By allowing customers to view the art as it would appear in their physical space, Saatchi Art helped them make an informed decision, ultimately boosting confidence in their purchasing decision.

Easy to integrate into existing ecommerce sites

As noted, AR brings physicality to ecommerce. And new features allow developers to execute this in new ways.

For example, 8th Wall Hand Tracking allows developers to create web-based AR experiences that incorporate the hand, wrist and fingers in the same experience. By extending past the palm, it can be used to “try on” a watch or bracelet. A shopper, for instance, can stack rings or try on multiple bracelets. By taking advantage of the open web, other features can be incorporated, such as a watch showing a user’s local time.

Combined with 8th Wall’s inline AR capabilities and ability to connect with ecommerce websites, Hand Tracking helps brands craft inline advertising experiences that enable viewers to try on products within the ad environment. This can lead to immediate purchase conversions with less opportunity for drop-off.

As brands continue to look to the future, the time to make the shift to AR is now.

Brynne Henn leads product marketing for Niantic 8th Wall. She leverages her expertise from a career across communications and policy to help emerging tech find footing in modern marketing plans.