In the ever-evolving world of e-commerce, Augmented Reality (AR) and Artificial Intelligence (AI) are redefining the shopping experience. Have you heard of virtual try-ons? The days of guesswork and uncertainty are gone: AR and AI power virtual try-ons by allowing customers to see how products fit and look in real time, all from the comfort of their homes or literally anywhere.
This seamless integration enhances customer satisfaction, boosts conversion rates, and reduces returns. These cutting-edge technologies are transforming the retail landscape and setting new standards for online shopping.
Transforming Customer Experience Using AR/AI
AI can significantly enhance AR by providing more intelligent, interactive, and context-aware experiences. Businesses that utilize Augmented Reality and Artificial Intelligence to give their customers a try-on option provide a realistic and personalized way to enhance the overall customer experience. Customers considering whether or not to purchase an outfit, eyewear, or a makeup brand can see how it will look before hitting the purchase button. By using a try-on application, customers can have fun shopping; it is also more convenient, and customers can go at their own pace without feeling rushed by store employees. This shopping type allows customers and business owners to reap the benefits.
Kevin Nicholas, CMO of Growth Marketing, shares how AR and AI can enhance the customer experience in e-commerce, specifically for virtual try-on applications:
AR, coupled with AI, makes for a highly personalized shopping experience. AR/AI can sense your skin tone and shape to recommend clothing, make-up, and accessory purchases. In addition, when added to past purchase behavior data, the increased personalization can significantly enhance the customer experience in e-commerce for individual brands and marketplaces by providing a more interactive and immersive shopping experience. For virtual try-on applications, AR/AI allows customers to see how products, such as clothing, accessories, or makeup, will look on them without needing to try them on physically. This reduces the uncertainty and hesitation often accompanying online shopping and increases customer confidence in their purchases. We often see an increase in e-commerce basket size, add-on purchases, and conversion rates with AR/AI. Deloitte highlighted that retailers using AR /AI see a 40% increase in conversion rates and a 20% increase in average order value compared to those not using these technologies. Further, we also see a significant reduction in product returns that can save millions in cost savings.
In an article by Medium (originally published in 3DVerse), the author discusses two additional benefits of using AR/AI for businesses.
First, they discuss safety as a reason many shoppers prefer the virtual shopping experience over going into the store. When COVID numbers are high, or it is flu season, the online try-on option creates space for fewer people in the store while still building revenue online.
The author shares another advantage of virtual try-ons: a wide variety of items can be showcased online, while doing so in-store would use up too much floor space.
“It means they [the merchant] can increase their inventory without having to necessarily stock up items on their shelves. Retailers can gauge customer reactions to products before ordering large quantities, reducing overhead costs tied to unsold inventory.”
Incorporating AR and AI into virtual try-ons transforms e-commerce by providing a seamless, personalized shopping experience that boosts customer confidence and satisfaction. Leveraging these technologies keeps businesses competitive, offering a shopping solution that meets evolving customer needs.
Utilizing AR/AI Consumer Sentiment Data
Sentiment data captures individuals’ attitudes and emotions about a subject, collected from sources like social media, reviews, and surveys. Analyzing this data helps businesses understand customer satisfaction, identify trends, and make informed decisions to improve their products and strategies.
Nicholas believes businesses will use AR/AI consumer sentiment data in e-commerce marketplaces to increase sales and improve customer gratification. He says:
Sentiment data captured through AR/AI e-commerce applications can significantly enhance the capabilities of AI large language models (LLMs) by providing insights into customer emotions and preferences. This data can personalize recommendations, improve product development, enhance customer service, and refine marketing strategies. When integrated into LLMs, sentiment data enriches the model’s understanding of human emotions, enabling it to generate more context-aware and empathetic responses. This leads to more personalized, responsive, and emotionally intelligent customer interactions, ultimately improving satisfaction, loyalty, and online sales. Further, the sentiment data is like the icing on the cake for the LLM that will enable higher levels of personalized AI when aggregated together – richer data builds the AI engine’s effectiveness that all LLM aggregators such as Google and Microsoft will be after.
According to an article on Zendesk, online reviews and ratings are the most influential factors in today’s buying decisions. The author shares that “…94 percent of all purchases are made for products with an average rating of 4 stars and above. Additionally, 61 percent of consumers say the number of reviews was important to them.” They also share this data:
- Ninety percent of customers will spend more to buy from companies that offer good CX.
- Eighty-one percent say a positive customer experience increases the likelihood they’ll make another purchase.
Each of these statistics further proves Nicholas’ point by showing an abundance of rich sentiment data is needed to help businesses with AR/AI try-on applications improve customer satisfaction.
Current Brands Using AR/AI Applications
The AR/AI e-commerce try-on application market is rapidly growing as more businesses recognize its potential to enhance customer engagement and satisfaction. Major brands like Sephora, Warby Parker, and Nike leverage these technologies to offer virtual try-ons, allowing customers to visualize products before purchasing. By incorporating AR/AI, these companies improve the shopping experience and significantly boost their revenue through increased conversion and reduced return rates.
Nicholas, working with Frenik Marketing Group, advises FaceCake Technologies on go-to-market and positioning strategy in e-commerce AI/AR applications.
Nicholas shares how popular brands and retailers utilize ADD AR/AI e-commerce Solutions:
Citing one of the leaders in AR/AI virtual try-on and e-commerce applications is FaceCake Technologies. FaceCake has several brands and retailers they work with, including the following use cases:
Chanel uses FaceCake technology for eyewear and other accessories, Ulta Beauty uses its GlamLab app for virtual makeup try-ons, and Neiman Marcus employs Mirror Mirror technology for fashion items. Macy’s integrates FaceCake’s virtual try-on for makeup and accessories, and L’Oreal offers virtual try-ons for its makeup products through this technology. Additionally, JCPenney leverages FaceCake’s AR technology for virtual jewelry and accessory try-ons, providing shoppers with a personalized and interactive experience across these leading retailers and brands.
The market for AR/AI technology providers is fairly fragmented, and a technology consolidation is probably close in the near future. The aggregation of sentiment data value also drives this.
Other retailers that have joined the try-on game include Nike, Zara, Sephora, Warby Parker, and Ray-Ban.
Conclusion
The combination of AR and AI in virtual try-on applications greatly enhances the e-commerce customer experience by providing realistic visualization, personalization, interactivity, increased confidence, and valuable business insights. This technology improves customer satisfaction, drives sales, and reduces return rates. It’s a win-win.