As global shutdowns forced the world to move into the digital space, technological advancements in 3D and Augmented Reality (AR) have accelerated in demand. Forward thinking brands large and small are using this time to innovate and adapt their current business strategies into long term 3D and AR immersive experiences. According to AR Insider, revenue from Augmented Reality eCommerce is projected to reach $19.5 Billion by 2023. This timeline will be accelerated due to the pandemic forcing innovation and demand of more immersive digital experiences. If you haven't considered AR a business strategy, you should. Here are 10 essential KPIs that can improve with Augmented Reality and 3D Product Visualization.
Overview of KPIs Augmented Reality Can Maximize:
Sales Conversion Rates
Moving to the digital space has affected business-as-usual in every industry. While we look forward to returning to the physical environment, advancements in Augmented Reality will become the interface that bridges the digital and physical environment.
Rebecca Minkoff, a women’s fashion and accessories brand knows virtual shopping empowers customers not only to experience the object dimensionally, like they would in a retail store but also envision that object in their immediate space in real time. Solving these two friction points increased customer’s likelihood to purchase by 65% and increased conversion rates by up to 250% on product pages when using Shopify’s AR feature and 3D Models to sell handbags.
IKEA has been leading the way of progress since 2017 with its Augmented Reality app, IKEA Place. IKEA is one of the most beloved companies in the world, their annual revenue has reached more than $40 billion worldwide by 2019. Part of this growth was due to on-line sales which jumped 43% from the previous year due to AR and 3D engagement. In the month of August 2020, the app was downloaded 300k times according to Sensor Tower.
Reduce Return Rates
It is estimated that 30% of all on-line purchases are returned as opposed to only 8.89% in brick and mortar stores. Cost associated with online returned purchases was estimated to grow to 550 Billion from 2017 to 2020. That prediction was made before Covid-19 forced an increased dependency of on-line shopping. According to the U.S. Census Bureau, on-line purchases grew more than 30% between the first and second quarter of 2020.
On-line purchasing has a high return rate because customers order multiple items with intent to return most of them. There just isn't enough information to make more confident decisions. Behavior associated with returns will continue as products fail to meet customer’s needs and expectations. Innovations in AR and VR can minimize such loss by making the product clearer to customers at the point of sale.
Reduce Bounce Rate
Data shows that human attention spans have reduced to 8 seconds, less than that of a Goldfish at 9 seconds, as a result of social media. According to EyeKandy, 50% of users spend more than 2 minutes interacting with an AR activation. That's a long time to hold a customer’s attention.
Bounce rates indicate how many visitors leave a website after viewing only one page. Reducing bounce rate from a website and getting visitors to explore the site is certainly a challenge.
Bumbleride increased visitor’s time on page by 21% after implementing AR. Leveraging rich media like AR and VR can keep customers engaged with your brand and increase visits by word of mouth. Where physical retail became experience driven less than five years ago, so too has digital become more immersive. Keeping them on your website is the new in-store experience.
Shopping Cart Conversion Rate (CCR)
Much of the challenge in on-line purchasing comes from trying to imagine the product in real life. With 3D modeling, much of the missing information needed to make a decision is available in real time, helping consumers to make more informed and confident decisions. Data from Rebecca Minkoff found that visitors who interacted with 3D models were 44% more likely to add a product to their cart, ultimately leading to higher conversion. 3D models combined with Augmented Reality makes it easy for the customer to say yes to your products.
Average Session on the Website
Average Session refers to the average time visitors spend on your website during a single visit. The goal is to increase page view per session and time spent on the site while reducing bounce rate. This means you want people to explore your website and products without getting frustrated and leaving before converting. It’s all the better if you can create engaging and memorable experiences like Jeromes Furniture did.
Implementing a 3D visualization application and customizable features on the website increased e-commerce sales and in store traffic. Time spent on the site increased to four minutes while app use incredibly quadrupled to 15 minutes.
The mobile app lets people decorate virtually from home leading to a 65% conversion increase from app users versus web users. The website data showed that users were creating an average of 9-10 product variations before leaving. Web user visits increased to 10,000 unique visitors with time spent on the site 274% longer than visitors who didn’t use the tool.
Shrenik Sadalgi, head of R&D at Wayfair told Deloitte Insights that people discover brands through the web browser making it the most important experience. If the web experience is memorable, the customer will download the app for more robust interaction with the brand.
Increase Brand Loyalty
Brand loyalty starts with customer satisfaction. According to Invesp marketing, 73% of mobile AR users reported either high or very high satisfaction with mobile AR experiences. AR can add a layer of brand loyalty by offering exclusive product drops like Jordan Brand did with a pre-released sneaker during the NBA All-Star game in February of 2018. The sneakers sold out in just 23 minutes.
Customizable features also increase traffic by offering repeatable sales. Nike’s ‘Nike by You’, for example, offers popular styles that are customizable using a 3D viewer to visualize the sneaker in real time on the website. Using AR to personalize tried and true products reduces disappointment and returns while increasing repeat purchases.
Reduces Time to Decision
There are many opportunities for AR to help people make better and faster decisions. Rich media helps customers absorb and understand information more rapidly, make decisions faster and with greater confidence. For this reason, 61% of shoppers prefer to make purchases on sites that offer Augmented Reality technology.
Daniel Beauchamp, head of AR/VR e-commerce at Shopify knows that today’s smartphone spatial mapping technology is capable of projecting one-to-one scale with an accuracy down to the millimeter. This technology makes it possible to project a product into the customer’s environment to ensure a good fit, color and design. AR users used to look up product specs and measure to determine if the product would fit well into their lives. With such assurance, 45% of customers said Augmented Reality features save them time to make a decision.
Improves General Shopping Experience
Memorable experiences create brand loyalty. In recent years experiences have been a key strategy applied to physical retail. Advanced by the pandemic, providing positive experiences across digital and mobile channels is essential to business in 2020 and beyond.
A frustrated digital experience can seriously hurt a brand in the eyes of the customer. In fact, 57% of customers won’t recommend a business with a poorly designed website on mobile. Moreover, if the website is not mobile-friendly, 50% of customers say they will stop visiting the site even if they like the brand. 3D models and AR overlays not only enrich the shopping experience, but make it possible for more information to be easily found and memorable.
Augmented Reality is 3 times more engaging than non-AR advertising. According to Forbes, “the immersion and interactivity of an AR experience, or advertisement, creates an emotional connection with users which aids better recall, positive associations and increases brand awareness. What is stored, or encoded into memory, is 70% higher for AR experiences.” That’s pretty memorable.
Further, AR advertising can’t be forced upon users, (for now) it’s a choice the customer makes when opening an app to opt-in. When the customer chooses to interact with a brand in this way, emotional “buy-in” has already begun.
Reydar reports that an Engineering Design Show advertising saw a 15.89% uptake of their Interactive Robot Campaign and an average time spent of 2m 29s. In 2019, a Brazilian Burger King ad went viral winning a Cannes Lion award. When pointed at a McDonnald’s ad, the AR app campaign burned it revealing a free Whopper voucher.
Increased Traffic to Site
As mentioned above, Nike’s exclusive product drops and ‘Nike By You’ personalization enabled with AR has not only enhanced brand loyalty but increases traffic to the site. Social sharing of mock-ups enables the influencer effect across media channels. Customers eager for discovery and designing their own shoe tell their friends, earning more traffic to the site.
For final thoughts:
Augmented Reality will affect every industry and become the new interface. According to Allan Cook, a leader in digital reality at Deloitte Consulting LLP, the company is seeing significant investment among it’s clients in next generation of exponential technologies across industries but especially for on-line retail. Where AR development used to take place with entire R&D teams, it’s becoming more accessible to small and mid-sized businesses. This is a timely opportunity for retailers and brands to invest in the new reality that is coming.