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Augmented Reality Is Changing How We Shop

augmented reality

Augmented Reality Is Changing How We Shop

Consumer shopping habits and preferences are rapidly evolving—and it can be hard for e-commerce marketers to plan when they can’t anticipate the next major change. In a market defined by uncertainty, business intelligence has become essential to monitoring trends and making better business decisions. And right now, one of the key drivers to watch is the rise of augmented reality (AR)—and how it will influence consumer purchases.

Gone are the days of having to wait for an online order to arrive to see exactly how it will fit in your home or look on your face. AR, or augmented reality, is allowing e-commerce platforms to give their customers a more immersive shopping experience by showing how new furniture will look in a room, or how their new makeup can look once it’s applied. AR is gaining traction quickly: it was used by over 100 million shoppers in 2021, and it’s predicted to grow even more in years to come. By 2025, more than 75% of smartphone users will be frequent AR users. Right now, we’re in the early days, and the impact of a technology like this can be a game changer for e-commerce marketers looking to deliver immersive, engaging customer experiences.

How do you incorporate AR? What’s meaningful to your customers? What are your competitors doing? These are key questions to consider in shaping strategy, and it’s essential to leverage business intelligence for your planning and decision-making. Line Item can provide this insight into what is and what isn’t working for your business’s e-commerce; it can also help you monitor and evaluate emerging trends in your market so you can make more informed, strategic decisions. This includes information at the product attribute level as well as insight into your SEO and campaign performance and much more—all via a single, powerful platform purpose-built for CPG and e-commerce.


New technology shapes the shopper experience

How does AR work? AR takes the image captured on a device’s camera and imposes an image or effect over it. It’s a powerful tool to overcome one of the biggest friction points (and risks) of online shopping: the dreaded “not as described.” About 30% of all products bought online are returned (compared to an approximate 9% return rate for brick-and-mortar purchases), with 22% of those returns attributed to the product looking different than described. A customer’s ability to have greater confidence in a product before purchasing can help curb those return rates.

Brands like Ikea are utilizing AR to show shoppers what a product will look like in their homes. A shopper considering buying a new piece of furniture could use their phone’s camera to view the area where they plan to place the furniture, and the AR technology would place a 3D model of the furniture into the landscape, providing views from multiple angles.

AR, of course, is not limited to furniture. According to Shopify, Bumbleride, a stroller company, and Gunner Kennels have both been using AR to allow potential customers to see how much space the product will occupy in their home or on the sidewalk, and if their dog will fit in a specific crate. This allows shoppers to get a deeper feeling for how a product will look or function once they have it, giving them more purchase confidence. And it translates to better business performance: Bumbleride and Gunner Kennels reported 33% and 40% increases in order conversion rates, respectively.

AR can also work for CPG brands. Cosmetic heavyweight Sephora is implementing a “Virtual Artist” feature to layer the appearance of makeup over the face of a potential buyer (similar to a filter on social media apps). The buyer can sample different makeups quickly without ever having to go into a brick-and-mortar store. AR will give consumers new avenues to explore products—upping the ante for e-commerce brands. According to Shopify product lead Ryan Smith, AR functions in e-commerce “will be ubiquitous by 2023.”

Staying on top of trends

How could AR strengthen your e-commerce strategy or enhance customer experience? What competitors in your category are already implementing it? Staying on top of trends in a dynamic market with rapid shifts in consumer preferences is challenging; powerful business intelligence enabled by Line Item makes it easier.

AR isn’t the only trend to watch. Are there any new competitors out there, undercutting your pricing or appearing first in search results? What product attributes are driving value? Line Item provides better business intelligence to answer questions like these. Through its proprietary AI engine, which calculates attributes for style, form, packaging, flavor and much more, Line Item can help you analyze what’s really motivating preferences and purchases.

Line Item also helps to ensure accuracy and consistency in product descriptions and images, which can affect search engine rankings and page one results. Line Item can identify if your items are overpriced or if your promotions are working.

In a constantly evolving marketplace, understanding what is working for you—and your competitors—can help you make strategic changes and execute smarter strategies for more successful e-commerce. It all starts with better business intelligence. This makes Line Item your lifeline to more profitable ecommerce.

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Ironbridge Software was founded in 1989 by Mike Dickenson. Mike’s unparalleled expertise and passion for technology led him to create the first-ever analytical solution for the Consumer Packaged Goods Industry.

augmented reality

How Augmented Reality Can Propel E-commerce Growth

One of the biggest challenges e-commerce retailers have had to deal with is finding a way for the consumers to interact with the products before purchasing. Owing to the fact that most people like to experience the product before making a purchasing decision, customers may abandon their carts. However, technological advancements have come in a big way to solve this through augmented reality (AR).

Simply put, augmented reality is a technology that needs artificial intelligence to be effective, and that creates a digital interface in the environment around a person by placing virtual objects in real-time in the real world. In other words, AR allows customers to review virtual products in their real-life environment, through computer-generated images on a screen to see how well they fit in their lives.

This technology has significantly improved the e-commerce customer experience. In fact, most customers now prefer purchasing on sites that offer this technology.  Even as you think of starting your e-commerce store, it is important to rethink the platform that you are going to use. It is also important to do SEO for your store to make sure that potential customers are finding you easily on online search engines. If you’d like to optimally leverage your SEO strategy, you can partner with an SEO company to help you customize the right strategy for your e-commerce.

That being said, these are the ways augmented reality can take your e-commerce forward.

1. It increases sales

In a brick and mortar store, people pick up multiple clothes before going to fit them in the changing booth. This gives them the chance to see how well an item fits on them. The more items that fit them, the more the chances of buying a few of them, if not all are increased.

The same situation is brought to life in e-commerce stores through AR. Customers are able to try on multiple items in a short time. For instance, a person who wants to revamp a room has the ability to see how multiple pieces of furniture fit in the room. They are more likely to purchase multiple pieces that go well together.

In addition, the ability to view a product in 3D provides many insights as compared to static 2D images. This influences the purchasing decision especially for people who prefer interacting with an item before purchasing. This shows that the conversion rate is high in a site that uses AR as compared to a site that doesn’t use AR.

2. It increases customers’ engagement

AR technology is thrilling and fun. Think of how many hours people use experimenting with Snapchat filters. Going through Instagram Stories, you can see people post different photos of them with different filters on, which is actually AR at play.

Virtual try-on is engaging. Statistics show that customer engagement increases by a huge percentage on an e-commerce platform that incorporates augmented reality technology. Someone can be hooked for some time trying on watches on their wrists or trying on different eyeglasses. The longer they stay, the more they are making an emotional connection with your brand, and the more they will be compelled to purchase something. This connection makes them loyal and repeats customers. Even if they fail to buy during their first visit, you can be sure that the high level of engagement will take them back in the future.

3. Increases brand awareness

Facebook challenges have been on the rise in the recent past. They provide businesses a creative way to market their brands in front of millions of people. Brands that have been able to leverage them have seen so much success in their marketing campaigns. With AR filters, you can start a Facebook challenge encouraging people to try on your products. Use catchy captions and hashtags and encourage people to tag their friends in the challenge. Owing to the fact that AR try-ones are fun, you stand a big chance of success with engaging AR campaigns.

One example of such a campaign was done by an Italian cosmetics company, We MakeUp, on Facebook. The company used a video showing people how to use filters to try on different shades of lipstick. The video encouraged people to try how the lipstick would look on them. The brand recorded a huge success and increased sales.

This is to say that video-only ads are engaging, but they are more successful when AR is added to them.

Case Study of IKEA

Ikea is one of the biggest manufacturers of furniture located in multiple countries across the world. What keeps IKEA on a competitive edge is their affordable prices and the easy to assemble products. So what IKEA has been doing recently to keep their advantage is that they have introduced virtual reality into their store with the aim of improving the customer experience. They have started this activity also in China, which allows users to test the IKEA products by using this VR app. Basically, they can use the app to automatically scale the products, depending on room dimensions which is highly accurate and gives users the possibility to see how products would look in the room.

E-commerce stores are slowly taking over the brick and mortar stores. However, the ability to interact with products in a physical store beats the convenience of online shopping by far. If you are to capture the customers who are still stuck on trying on products before purchasing, AR is an aspect you can’t afford to ignore.

AR

How to Create an Enduring Workflow for AR

Please note: Vocabulary in the payment automation world varies. While customers (i.e., clients, buyers) and their suppliers (i.e., vendors, beneficiaries, sellers) are both considered customers to payment automation companies like Nvoicepay, this article will use the terms “customer” and “supplier” to distinguish between them.

Imagine having to switch out old railroad tracks while a rusted steam engine thunders across. Adopting modern electronic payments runs about as smoothly for banks.

When you think about how old banks are in the U.S., it’s an understandable plight. They’ve been running on the same tracks since the first bank’s founding. Additional features, like wire payments and credit cards, were added over time as a complement to the old system. But the rise of nimbler financial technology (fintech) companies has lit a fire under them. Now they face the challenge of converting their processes to electronic means without disturbing their clients’ day-to-day business.

In a way, fintechs have it easy. Their very nature makes competing against banks a breeze, primarily because banks were built to last, and fintechs were built to adapt. They can easily shift gears to meet demand and immediate needs. Meanwhile, banks are frequently caught up in bureaucratic processes that make it virtually impossible to react quickly to problems.

Financial and fintech industries feel the contrast most often when tackling payment security—specifically when it comes to cards. Even though check payments incur 25% more fraud instances than card payments, according to the 2019 AFP Payment Fraud and Control Survey, many companies hesitate to make the switch to more electronic means.

Kim Lockett—the Director of Supplier Services at Nvoicepay, a FLEETCOR company—offers a glimpse into why companies are hesitating to shift gears: “Fraud is not a new issue to companies,” she states. “But what we’ve learned is that fear of change overrides the fear of potential fraud loss, even among companies who have already incurred those losses.”

With almost 30 years of experience in payments and financial services, Lockett possesses a holistic perspective on supplier expectations for seamlessly receiving payments, with payment fraud protection listed as one of the highest priorities. She’s heard all the horror stories, from a small business whose checks were stolen out of their mailbox and cashed, to a company whose employee tried to use business deposit information to clear her personal checks.

That’s not to say that errors and fraud don’t occur for card payments as well. But they occur significantly less and are much easier and faster to resolve than check, ACH, and wire payment issues.

What’s the Holdup?

In the last decade, fintech companies have improved the tracks on which many accounts receivable (AR) teams function. From providing lower processing costs for card payments to offering user-friendly portals for reliable payment retrieval, fintechs transform painful AR workflows into a functional process.

Meanwhile, banks have just begun to offer pseudo-solutions that appear to be tech-friendly but still run on old tracks. An excellent example of this is lockbox technology, where banks mitigate the processing of check payments and their data for their larger customers by taking on the work themselves. This sort of offering likely extended the life of check payments. Still, it didn’t eradicate the underlying problem: that even though work has been lifted directly from their customer’s shoulders, someone at the bank still has to process checks and submit data for manual reconciliation. The process is hardly automated, and the advent of payment processing technology has all but made the entire process impractical.

Embracing the Future

Of course, the best way to avoid check issues is to avoid checks. These days, electronic payment methods offer higher levels of security. But if electronic options like virtual card numbers are such a fantastic option, why are so many companies avoiding them?

Lockett states: “In general, I think companies are afraid of handling credit card numbers because they feel there is risk involved.”

It’s not the dangers of check payments, but misconceptions about electronic payments that cause companies to refrain from accepting them. Many AR teams rationalize that they’d rather respond to the inevitable check fraud cases they understand than walk unprepared into the relatively unknown territory of card fraud.

When checks are stolen and cashed, there’s very little that can be done. At the end of the day, someone will be out that money. Other electronic payment types like ACH and wire are significantly safer, but can still experience fraud, especially internal instances, such as when a company’s employee submits their personal bank account information to receive company payments. Whether these issues are reversible is dependent on each unique scenario.

Card payments, particularly the virtual card numbers provided by fintech companies, are typically protected by two-factor authentication. Whether this means that AR is supplied with a login to access secure details or a portion of a card number, the information is much more difficult for bad actors to access, securing the payment process and reducing the risk of fraud.

In the end, not every company will have the capacity to accept card payments, so leaving alternate options open like check and ACH truly boils down to how much individual payment providers value customer service.

Taking Suppliers Along for the Automation Journey

In many cases, banks have rushed to cater to customer’s needs, leaving suppliers in the dust when it comes to follow-through on electronic payments. Despite these efforts to change, most larger banks still follow their old tracks, and their customers and suppliers experience the same lack of customer service they always did.

With over 10 years of support development behind them, fintechs have expanded their offerings to suppliers, catering to their specific needs, whether they require something as simple as customizable file formats or a more significant request like payment aggregation. Fintechs that follow through with supplier support are truly delivering on their promise of offering an end-to-end solution. They are building tracks that support the advanced bullet trains that companies have become.

“Ten years ago, companies were reluctant to add virtual card payments to their list of accepted payment types,” says Lockett. “Education, experience, and word-of-mouth have established virtual card payments as a mainstream and relevant way to conduct business.”

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Alyssa Callahan is the Content Strategist at Nvoicepay, a FLEETCOR company. She has five years of experience in the B2B payment industry, specializing in cross-border B2B payment processes.