The pandemic is causing a shift in brand loyalty with 75% of consumers changing their preferred brands. This modification creates a unique opportunity for smaller, less established retailers to grow their market share.
Given this unlikely situation, it’s important that newer and less established brands do not lose sight of what consumers expect when shopping online in favor of exciting technologies that – in theory – could improve conversions.
One such example of this is augmented reality. AR has emerged as an immersive shopping tool that can help online buyers visualize and interact with an item.
In the right setting, these tools can be both fun and beneficial to consumers, but any change to a familiar purchasing process may confuse shoppers and negatively impact sales conversions.
Large established brands using AR, such as IKEA and Gucci, can afford to invest without a sizable risk of losing customers, but that’s not the case for new contenders.
Retail brands will continue to innovate as a result of the past year, but newer entrants trying to capitalize on changing consumer preferences should tread lightly when implementing augmented reality to avoid disrupting proven e-commerce checkout fundamentals and losing out on sales growth.
E-Commerce Process Fundamentals
Despite the fact that people can buy almost anything online, the reality is that the majority of sites share similar steps for both their shopping and checkout flows. One of the key risks of introducing AR into the e-commerce experience is disrupting the purchasing process.
According to Google, a one-second page load delay can reduce conversions up to 20%. Implementing augmented reality into shopping and check-out processes may lead to site lag, or simply confuse shoppers and lead to abandonment during checkout.
Brands need to make sure their website favors functionality and familiarity over new features, meaning it should operate as expected with the shopping cart and menus in expected locations, and should use prefill whenever possible, from shipping data entry through payment processing.
Checkout abandonment is especially dire for retailers who offer subscription-based services. If a payment doesn’t go through properly one time, or if there is a distraction during checkout, the failure could potentially cost thousands of dollars of future sales per customer.
Retailer Demographic and Brand Credibility
According to Lifetronic, 70% of consumers aged 16-44 are aware of augmented reality technology, meaning it is vital for brands to understand their demographic when implementing this technology. Brands with a majority of less-technical visitors should be especially cautious when considering implementing AR.
Brands must also be realistic about their existing credibility (or lack thereof) with potential customers. Well-liked Millenial or Gen Z brands, such as Peloton, Nike, or Asos, can utilize AR in their shopping experience as their brands have established customer bases. If the purchasing experience is longer-tail or not as immediate because of the addition of emerging technology, customers are still likely to continue the transaction.
Emerging companies will not be afforded the same luxury with regard to technical snafus or with a less-than-familiar online purchasing loop, which can be easily perceived as poor design.
Shifts in brand loyalty create a unique opportunity for less-established brands to assert themselves in the market and grow their consumer base and credibility. While it is important for retailers to innovate and capture interest from potential customers by using immersive shopping tools, like augmented reality, the ultimate goal remains sales.
Risking demographic preferences or website setup in order to implement AR technology may inadvertently do more harm than good in some cases.
Credibility and Online Fundamentals First, Then Augmented Reality
Presently, AR technology is also expensive to design and properly integrate and should only be done by brands that can afford to take calculated risks with both their website setup and customer base.
There are many additional nuances to creating a streamlined application or mobile-supported site, so newer retailers are almost certainly going to gain more value from tightening up transactions than onboarding new technology.
Emerging retailers that are still establishing an online presence post-pandemic should first focus on perfecting their back-end systems, including supply chain and shipping processes, to ensure smooth delivery of items, and happy customers.
Only once credibility and online fundamentals are well-established should brands look to add augmented reality and other immersive tools into their site experience.
About the Guest Author(s)
Bo Grist is EVP of product delivery at Ignition Commerce, responsible for the delivery of all client implementations and the functional and technical evolution of Ignition Commerce products. He also serves as the lead technical subject matter expert for new and existing clients. Grist has over 20 years of experience in eCommerce and has developed operational systems that reduce production time while increasing stability and project predictability.