Proven Reality

Augmented Reality in Retail – How does it impact sales?

Technological advancements are immediately embraced by some individuals, while others may take a longer time to adapt and welcome changes. Regardless of which side of the fence you are on, it is undeniable that it has changed how we lead our lives or do business. Today’s retail experience is vastly different from the years gone by. The options available 10 years ago were limited and conventional. One could either walk into a store or order from a catalog if they felt like experimenting. However, as we look at the retail industry now, advanced technologies, particularly Augmented Reality (AR), have enabled a whole new range of possibilities. In this data-driven piece, we will explore the benefits of Augmented Reality in the retail industry and the way it impacts sales.

The statistics are in favor of AR

A recent survey by Eclipse reveals that over 34% of customers use AR while shopping and 47% use it both in-store and online.

Millennial shoppers are wholeheartedly embracing AR technology. With AR becoming an inherent part of the shopping experience, these numbers are expected to increase. If, as a retailer, you fail to provide this as an option for your customers, it is highly likely that your industry peers will have a competitive edge over you.

Increase sales irrespective of brand popularity

Most of the time, customers prefer well-known brands when making the purchase decision because they want to avoid the risk associated with lesser-known brands. Brand signals are even more important in an online environment due to the inability to physically touch the products before they are purchased. AR can reduce uncertainty in online purchase decisions by providing visual information about the product fit. In this way, AR may reduce consumers’ reliance on brand signals and inadvertently increase the preference for less popular brands.

Woman using AR for shopping
Augmented Reality helps customers better understand how apparel would fit and look on them without actually trying it on

Impact sales by enhancing the product appeal

In the same Eclipse study, 77% of consumers who use AR said they use it to see product differences like color and style variations.

They can do this up-close, at different angles, and in their own environment with the help of Augmented Reality. Over 65% of AR users leverage the technology to learn more about a product & its features. Often, this is the case with technical products requiring up-close inspection.

Better category experience boosts sales

Customers unacquainted with a product category will lack the necessary category knowledge to evaluate its attributes as well as their preferences. AR could help reduce product fit uncertainty and increase purchase confidence for customers new to the product category by allowing them to visualize how products would appear in their actual consumption contexts. This may lead to a more substantial impact of AR on purchase decisions for these customers.

61% of customers chose to visit a store that offered AR over one without it.

Drive sales of expensive products

According to a survey conducted in the UK, 40% of shoppers are willing to pay more for a product if they can test it first with AR.

Customers familiar with online shopping are still hesitant to purchase expensive products through the Internet. This is because there is a high degree of product uncertainty and the risk of more significant financial losses associated with it if the products do not meet their needs. AR enables customers to test products prior to purchase, thereby ensuring they match their preferences and needs. Thus, the integration of Augmented Reality in retail enhances decision comfort, leading to increased willingness to pay.

Accelerate sales regardless of the online ratings

Customer rating a product
Online ratings can affect buyer behavior, however, with AR, users can test out products for themselves without relying on online ratings

Online ratings can be an essential source of information when consumers make uncertain decisions. In such cases, a lower product rating could harm the brand image and negatively influence consumers’ decision-making. However, evaluating products and resolving uncertainty via firsthand experiences on AR platforms may reduce customer reliance on online ratings since consumers tend to overrate direct experiences with products. Thus, AR in retail could lessen the role of online rating systems in purchase decisions by allowing customers to assess product fit and benefit through their own virtual experiences.

Increase sales by decoding channel behavior

Many consumers hesitate to buy from the retailer’s online channel due to a greater degree of uncertainty pondering over assessing the product fit due to the absence of actual products. However, they have previously purchased from offline channels and trust the brand. As Augmented Reality stimulates the in-store experience of trying products, it may reduce the uncertainty of choosing products for customers who are new to the online channel, resulting in sales growth both online and offline.

The use of Augmented Reality in shopping has led to consumers making impulse purchases.

According to a UK survey, 72% of consumers used AR in their shopping journeys and bought things they had not planned to purchase.

The retail business will continue to evolve in the future, thanks to the ever-changing landscape of technological advancements. The more consumers look for personalized and interactive experiences in their shopping, the greater AR technologies’ potential to thrive will be. With technology at the forefront, it may be safe to conclude that AR’s future in retail looks extremely promising in the next five years as making profits is something every business aspires to achieve.