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How VR and AR Boost Brand Loyalty in Retail

Virtual reality and augmented reality bridge the digital and physical shopping experience. Should brands adopt these technologies in a post-pandemic world?

Virtual reality and augmented reality bridge the digital and physical experience for shoppers. Although they are advanced technologies, they represent an increasingly accessible way for retailers to reach new consumers. The modern-day marketer expects to be delivered the best user experience, and for brands to keep up with technological trends. In a post-pandemic world, AR/VR might just be the edge brands need to capitalise on to ensure they have not only survived the tough business environment of lockdown, but that they use the world’s increased reliance on digital shopping to their advantage.


What is Virtual Reality/Augmented Reality and How are They Used in Retail?

Like many people, you may not have set foot in a physical store aside from supermarkets for months. Perhaps the last time was Christmas shopping, or some time even further back. Of course, this does not mean that nothing has been purchased in this time. ECommerce has exploded as a result of the pandemic, with shoppers going online as a replacement for visiting stores - online shopping increased by 74% in 2020. In addition to simply online shopping, we can also see that the use of augmented reality technology in retail has been able to provide a unique and immersive shopping experience. While the use of AR has been on the rise over the last few years, the impact of the pandemic has created a unique opportunity for this AR retail to thrive.

So, what is augmented reality? Augmented reality (AR) describes technologies that allow digital content to be overlaid into a real -world environment. Rather than placing the user within a digitally created space as virtual reality (VR) does, AR brings the digital content into the world of the user, integrating virtual images or data with real-word objects and surroundings. While we frequently see this with filters on apps such as Instagram and Snapchat, the inclusion of AR in our online shopping experiences has also been growing.

Within the scope of retail, Augmented Reality allows consumers to engage in a ‘try before you buy’ experience. 76% of consumers say they would ‘maybe’ or ‘definitely’ purchase more items if there was a ‘try-before-you-buy’ option available, and the numbers of  it is easy to see the infinite potential of AR in eCommerce. A variety of AR apps already exist on the market, across industries from beauty and fashion to homeware. Users are able to access an interactive and immersive shopping experience, with more detail and personalization than they would have from their usual online shopping journeys. As AR becomes more popular with consumers, there is real potential for this technology to take the shopping experience into a new dimension.


How VR and AR Advance the User Buying Journey

Did you know that 40% customers are likely to spend more money on a product if they can experience it through AR? The buying journey in today’s world of omnichannel marketing involves multiple digital touchpoints, which should all be considered as part of your wider strategy. AR and VR experiences are one way in which to provide users the ultimate customer experience across key stages in this journey.

Making use of these cutting-edge technologies results in increased wide-spread curiosity around and recognition of your company (awareness), is a fresh way to deliver product information (consideration), and this highly personalised experience is a fantastic way to enchant customers into remaining loyal to your brand (retention). In addition, every business wants to minimise friction in the final stages of a purchasing decision. Designed well, VR experiences offer the ultimate solution. Mastercard and Swarovski partnered to launch a virtual reality shopping app where users could browse Swarovski pieces in a decorated home. By entering payment details before beginning, users could directly checkout within the app - with no slow-loading checkout page, security concerns, or other blockers to purchasing.

With the lingering effects of COVID likely to influence purchasing decisions in 2021, there has never been a better time to experiment with Augmented Reality and Virtual Reality and embrace the power of digital experience. Discover how household name brands have harnessed the power of AR and VR to captivate audiences below.


AR/VR in Homeware 

The use of augmented reality in interior design and homeware is not new by any means. Furniture retails have been using AR increasingly in the last few years, with many of these features now considered commonplace within this industry. From visualising paint colours to understanding how new furniture can work within in a space, AR lends itself to interior design by offering an easier experience for customers, and allowing a ‘try before you buy’ experience that normally cannot be achieved easily with these products. Home designer company Houzz found that after launching their AR app in 2018, ‘people who have engaged with the tool were 11 times more likely to purchase. While the convenience of these apps was no doubt appreciated pre-2020, the growth and value of AR for the homeware and interior design sector has become even more evident in a post-pandemic work.

Apps such as IKEA Place allow customers to visualize how items of furniture would fit into their living space. Rather than having to purchase incorrectly sized items and return them when they do not work for a room, customers can use this AR mobile app to “place” items of furniture in a room in order to get a sense of its dimensions in relation to the space and surrounding items. While these app predate the Covid-19 pandemic and resulting lockdowns, they lend themselves perfectly for this situation. Customers are able to buy online with more confidence in their purchase at a time where they are unable to see furniture in person in a physical store. In addition, ‘try before you before’ helps to reduce the rate of returns, which can be an inconvenient process for large or bulky furniture regardless of lockdown regulations.

AR also can be used to simulate interior decorating changes, such as paint colours. Dulux’s Visualizer app allows users to get an idea of how a space with a new paint colour, without having to purchase and swatch the paint themselves. Users can trial colours on the walls of their home using their app, and then are able to save their favourites or order directly through the app, providing a clear path for users to complete transactions. While the app is not a new development for the Dulux brand, it allows consumers to continue to engage and purchase products with increased convenience and ease. The app has undergone various developments, and now factors in the difference in lighting for outdoor and indoor walls, and can be used to alter wall colours from photos, rather than only live in AR.

Wayfair have taken what has now become an industry standard of using AR and started to move a step further with their app Wayfair Spaces. Integrating AR with a VR approach, Wayfair allow their customers to enjoy an even more immersive experience when planning their homeware and interior design. Users are able to view a range of rooms, and use these for not simply furniture placement, but also broader decorating and design. With homeware having already established a strong presence in the world of AR retail, we can only expect to see increased innovation and a continued shift towards mixed reality as brands within this sector seek to set themselves apart.

Man using AR to enhance his retail user experience
Using AR to better imagine arrangement of retail homeware products


AR/VR in Beauty

The beauty industry is a perfect fit for AR/VR experiences. Providing ultimate personalisation will be even more key in a world where users are less likely to engage with physical product samples after the pandemic peak. With 80% of consumers more likely to buy if their retail experience is personalized (McKinsey), these technologies provide a modern makeup solution to encourage users along the buying journey. For users who are weighting up whether or not to buy, augmented reality will make beauty products more accessible, memorable and real. From increased inclusivity to virtual consultations, discover how beauty industry giants have been using AR/VR below to heighten excitement around their brands.

L’Oreal (VR + AR) - this is one pioneering brand that has been channeling virtual reality solutions to bring the most effective store experience to users. They have used VR to help with future store design concepts (working to understand the optimal store layout and product shelf placement, and receiving feedback through their Consumer Technical Center), allowing them to get everything just right before bringing in developers. Geoff Meade (L’Oreal’s AVP of Ecommerce Strategy) has commented: “We used to physically build everything before we could get a true feel of what something would look like. This solution gives us the ability to further refine and test concepts without incurring those development costs.”

Spotting a way to support users during the pandemic and age of video calls, L’Oreal also created the ‘Signature Faces’ digital makeup line. This allows users to ‘wear’ makeup via filters on live video platforms including Google Duo, Zoom and Instagram, allowing customers to experiment with 10 products. This represents a great way to spread the word about L’Oreal’s products whilst also providing users with real value, a solution to new issues rising from their increasingly digital lifestyle. On top of this, it’s a clever way to increase the channels through which consumers can then find the L’Oreal site.

Nutox (AR) - Malaysian skincare brand Nutox takes this personalisation a step further by analysing the skin condition of potential customers through its AR technology. It identifies issues with skin (wrinkles, hyperpigmentation, dullness, dryness) and tracks improvement after the user has begun or altered their skincare routine.

2021 trends in beauty will be something all beauty brands should aim to keep pace with. AR/VR can offer solutions to keeping on top of the following trends:

  • Inclusivity – with big brands rightfully expanding their ranges more and more (Fenty by Rihanna launching 40 foundation shades in 2020), makeup ‘try-ons’ mean that all product shades can be offered digitally, as opposed to a more limited range of physical in-store samples
  • Environmental impact – for users conscious of the impact of plastic packaging, AR try-ons reduce the number of potential wasted products as users will be more aware of what they're buying
  • Supporting consumers’ physical and mental health – from work calls to face-to-face meetings, beauty and skincare brands can focus on helping users look and feel their most confident
  • YouTube – one of the top digital marketing trend predictions for 2021 (Think With Google), the giant video-sharing platform is also seeing the potential in AR with its new ‘interactive ads’. YouTube’s AR Beauty Try-On allows users to virtually try on makeup whilst watching video content such as product reviews. MAC is the first company to pilot this, with around 30% of consumers activating the feature.
  • Increased health and hygiene standards – reducing shared product samples and implementing digital options to try on product-ranges in-store (such as with Charlotte Tilbury’s magic mirrors) will be reassuring to customers who have grown hyper-aware of cleanliness over the past year
Benefit Cosmetics AR beauty brow try-on feature
Benefit Cosmetic's AR brow try-on feature

AR/VR in Clothing

Online clothing giant ASOS turned to AR during the first UK lockdown to enable them to promote new products when physical photo shoots were impossible. ASOS used AR to ‘digitally fit’ their models with a tool developed by Zeekit called ‘See My Fit’ which maps products onto photographs of models to create a realistic representation of how clothing fits. This use of AR allowed ASOS to promote 85,000 products during the first lockdown, which, although a relatively small proportion of ASOS’ product catalogue, it demonstrates how AR can solve core business problems for retailers during the pandemic. With restrictions still likely to be in place until summer 2021, AR initiatives such as ‘See My Fit’ may be the answer to product promotion for retailers who want to keep their customers interested, and spending.

Other brands have gone further in embracing AR to connect with their customers throughout the pandemic. Kohl collaborated with Snapchat and used AR technology to create a ‘Virtual Closet’ during the US lockdown last Spring, allowing their consumers to continue to enjoy the retail experience despite being unable to visit a physical store using the Snapchat app. Products available were catered to current demand, athleisure was featured owing to much of the population staying at home.

Levi went a step further, partnering with screensharing app Squad in September 2020 to target US school students who would usually be shopping together for their back-to-school wardrobes. In addition to the screensharing feature of the app, Levi created virtual shopping events with Levi stylists to provide tips and recommendations based on the groups’ interests and style.

We do not expect that AR will replace the role of real models in product promotion or the physical in-store shopping experience, but AR can continue to benefit retail beyond COVID-19. AR can be utilized to make online purchases easier with virtual product visualizations on different body types as Zeekit’s ‘See My Fit’ technology does. Some retailers such as Gap are already doing this, with the use of their ‘Dressing Room’ AR app which allows customers to see clothing on a variety of different body types and produce an accurate product visualization with the input of their own measurements. Such uses of AR would reduce the likelihood of having to return items, increasing convenience for the customer, and reducing costs for the retailer.  

Using AR through smartphone in a clothes shop
Using easily accessible AR to enhance the shopping experience in clothes stores


The Future for Retail

So, is AR/VR just a pandemic problem-solver, a passing trend to compensate for our locked-down lives? Or could AR morph into a standard retail practice beyond COVID-19? As we return to physical stores, we hypothesize that AR will remain a useful sales tool, both online and offline.

According to Shopify, AR content had a 94% higher conversion rate than products without AR. With the help of AR, the consumer can easily ‘try before they buy’ before committing to a purchase. AR technologies are allowing customers to see furniture in their own homes, how clothes fit their body type and even how make up looks on their skin. The use of AR also eliminates the hassle of returns for the customer, and reduces returns spend for the retailer.

In the future, AR can also improve product reach for retail brands. As brands have grown accustomed to virtual product launches and fashion shows, this practice can continue beyond COVID-19 to increase audience reach. AR therefore presents benefits to the customer and the retailer; allowing customers to make informed purchasing decisions, increasing convenience, and reducing costs. With social distancing measures and greater hygiene practices here to stay for a significant time, the retailers who haven’t yet utilized AR should consider how AR can help safeguard their future success - for ideas on how you can incorporate AR/VR into your retail strategy, have a read of Merkle India's Sneak Peak Into the Future of SEO with Augmented Reality or get in touch to find out more about our eCommerce services.