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Extended Reality (XR) is the new frontier in online shopping, combining augmented reality (AR) and virtual reality (VR) to deliver immersive customer experiences. By bridging the gap between physical and digital retail, XR technologies offer consumers realistic, interactive, and personalized shopping journeys. This article explores the growing interest in XR across different demographics, its global adoption rates, and its potential impact on the future of e-commerce.
Brand recall is how well people remember your brand. Scientists found that AR boosts brand recall and recognition. This likely comes from AR's ability to create interactive and engaging experiences that feel real.
When customers use AR, they can see and experience products up close. This deeper level of interaction makes the experience more memorable. As a result, customers remember more details about your brand and products.
A February 2022 survey revealed that Gen Z shoppers show the highest interest in AR shopping experiences. Over 90% of Gen Z respondents expressed a willingness to use AR to visualize furniture or decorations in their homes. This generation’s enthusiasm for AR significantly surpasses that of older generations, with only 64% of the silent generation showing similar interest.
In the United States, consumers aged 18 to 34 are the most frequent users of AR and VR for online shopping. More than one-third of this age group utilizes XR to see how furniture would look in their home. Conversely, only 13% of shoppers over 55 years old engage with XR technologies for the same purpose.
Securing high margins in e-commerce can be tough due to competition and consumer preferences to buy lower-priced items. XR changes this by providing an immersive experience that highlights the true value of a product.
Deloitte’s research shows 40% of shoppers are willing to pay a premium after experiencing products with AR. As such, brands that integrate XR into their shopping experience are likely to see higher margins and increased customer loyalty.
Virtual try-ons are becoming increasingly popular across different countries. In 2022, 14% of online shoppers in Germany used virtual try-ons, followed by 12% in the U.S., 11% in the UK, and 8% in France. These tools are particularly favored for visualizing furniture and trying on makeup or accessories.
Additionally, the global pandemic has accelerated the adoption of virtual try-ons, as consumers sought safer, contactless shopping alternatives. Retailers like Sephora and Warby Parker have integrated AR into their online platforms, allowing customers to try on makeup and eyewear virtually before making a purchase.
Consumer excitement for AR and VR in online shopping varies by region. In 2023, emerging markets, especially in the MENA (Middle East and North Africa) and Southeast Asia regions, showed high enthusiasm. Approximately one-third of respondents from Vietnam and Saudi Arabia expressed significant interest in these technologies. This contrasts with lower excitement levels in the United States.
Despite the potential for AR and VR in digital payments, consumer adoption remains slow due to concerns about technology availability and security. A 2023 survey highlighted that 12% of respondents would not use XR for payments due to security issues. Interestingly, the main hurdle was a lack of understanding about what the technology could achieve.
In the metaverse, real-world payments are often part of the shopping process. A PayPal survey indicated that U.S. consumers primarily used PayPal for metaverse purchases, followed by debit cards and cryptocurrencies. This includes both direct purchases and the conversion of real-world money into in-game currencies like Robux or V-Bucks.
Moreover, XR technology can enable innovative payment methods, such as biometric authentication using voice or iris recognition. Although adoption is currently slow, the potential for seamless, secure transactions in virtual environments is significant.
Today's customer wants to feel empowered and in control. According to Business Insider, 64% of consumers want a virtual shopping assistant that combines AR and AI, and one in five already expects retailers to have AR tools. XR is their best chance to get these personalized and immersive experiences.
But this comes with some challenges. For example, how much control should companies relinquish to consumers before it compromises their brand integrity? Companies need to carefully check how much customization they allow while still maintaining a consistent brand image.
Polish consumers are particularly eager for XR tools in online shopping, with 40% expressing interest in 2023. In the U.S., 37% of consumers shared this sentiment. These figures indicate a growing desire for more immersive shopping experiences across various markets.
As of 2023, only a minority of consumers engaged in shopping activities on the metaverse. While 36% were aware of the metaverse but had never used it, 9% made purchases after testing products virtually, and 7% used it for luxury shopping experiences.
Extended reality has a significant impact on shopping, especially among Gen Z and Millennials. According to research by Klarna, more than half (59%) of Gen Z shoppers are open to robot fashion advisors in-store to take their measurements and recommend styles. Additionally, 34% want virtual personal shoppers online to provide fashion recommendations based on their taste. As such, integrating these technologies can be a great way for brands to attract and engage younger consumers.
Typically, e-commerce stores rely on text and images to guide customers. But XR offers them a chance to enhance this experience. According to a study, 42% of consumers want AR integrated with instructional guides.
Companies are already tapping into AR's potential to help customers understand and use products better. Mercedes Benz, for example, replaced its owner’s manual with an AR app in Germany. Owners can open the app, point the camera at the controls, and see 'how-to' videos and guides on the screen.
Furthermore, XR is increasingly being used for product customization and personalization. Brands like Nike and IKEA are leveraging AR to let customers design and visualize products tailored to their preferences, enhancing customer satisfaction and engagement.
XR technologies are poised to revolutionize online shopping by providing interactive and personalized experiences. With significant interest from younger generations, increasing adoption of virtual try-ons globally, and growing excitement in emerging markets, the future of e-commerce looks set to be more immersive than ever. Retailers should leverage these technologies to meet the evolving demands of consumers and stay ahead in the competitive landscape.
