What will e-commerce look like in the next few years? If you think about this question, you can no longer avoid numerous articles on immersive technologies. Virtual reality and augmented reality are therefore not new topics that are driving the e-commerce industry. However, the question of how far developments have progressed and what concrete use could look like remains mostly unanswered - and it is precisely these answers that we would like to find in this article.
What is immersive technology?
Immersive technologies enable users to immerse themselves in a computer-generated, three-dimensional environment. Virtual reality and augmented reality are among the most relevant immersive technologies that are already being used as a commerce channel.
Virtual reality (VR): With VR technologies, users are placed in a completely virtual environment through VR glasses. This environment enables a 360-degree view of the constructed digital world.
Augmented reality (AR): AR integrates digital information and objects into the real world. This is also done through the use of AR glasses, but in most cases with mobile devices such as the user's own smartphone, which supplement the user's real environment with digital elements.
The difference between virtual reality and augmented reality: VR is fully immersive and requires equipment, while AR usually augments the real world via an app on the smartphone.
The fact is: VR and, above all, AR are already being used as marketing channels by many brands to create buying impulses for the target group through immersive experiences. According to forecasts by Statista, the AR advertising market in Germany will be worth around 172.8 million euros by the end of 2023. Not only companies, but also users find immersive sales channels appealing: in a Bitkom survey, a quarter of respondents stated that they would use immersive technologies such as the metaverse for both private and commercial as well as professional purposes. You can find out more about the metaverse as a B2B channel here.
How can immersive commerce channels be used?
Immersive technologies have great potential to improve the online shopping experience and offer customers a more realistic and interactive way to experience and buy products. Here are some ways immersive technologies can be used in e-commerce.
Virtual stores and showrooms
Companies can create virtual stores and showrooms where customers can try on or try out products using virtual reality (VR) or augmented reality (AR). This allows the target group to take a closer look at the products and get a better idea of them - similar to a physical store. In the fashion industry in particular, AR apps can have a major influence on purchasing decisions: Customers can use them to virtually try on clothing and accessories with the help of individual avatars. This not only offers a better customer experience than a traditional online store, but also helps to reduce return rates.
Product visualization:
3D models using immersive technologies allow customers to view products from different angles and better recognize details. This is particularly useful for products whose appearance, dimensions and quality are important - for example, furniture and furnishings. Many large retailers, such as IKEA, offer their customers the option of using AR to project pieces of furniture into their own home using a smartphone app.
Extended product information
With AR, customers can access additional information about products by pointing their smartphone or AR glasses at the product.This information can be product reviews, instructions for use or other relevant data.
Social shopping
Customers can shop together in VR-controlled environments, meet friends and select products together.This interaction creates a social shopping experience that was previously not possible in the online world.
Live streaming and influencer marketing
Companies can use live streaming events and influencer marketing in immersive environments to showcase products directly and increase customer engagement. Live shopping events are already being used by many large companies such as About You, Otto and Ikea.
Use cases - three examples from e-commerce
Virtual Saturn
Saturn is one of the early adopters and has been offering customers an e-commerce experience via virtual reality with Virtual Saturn since 2017. Using VR glasses and the Virtual SATURN app, users can shop from home in a virtual 3D environment. Products can be discovered in 3D, placed in the room and purchased immediately - with expert advice if desired. Gamification elements provide additional entertainment and a longer dwell time.
Amazon VR View
Amazon offers immersive e-commerce via Amazon AR View. Products are also displayed virtually within your own four walls via the Amazon app. According to Amazon, this has a positive influence on purchasing decisions, especially for larger items, as many shoppers are reluctant to buy furniture and bulky items online because they would like to see or measure them in the desired environment beforehand.
Virtual Artist
Sephora is one of the global market leaders in cosmetics retail and has also been giving customers the opportunity to try out a wide range of products on their own face with the Virtual Artist app since 2017 with the help of AR. Users upload a selfie that can be enhanced with digital make-up using 3D technologies and can even be moved. This technology has been continuously optimized over the years to make the products appear even more real on the customer's face. According to the app developers, these optimizations increased the conversion rate by 22%.
Payments and data protection - how secure is the use of AR and VR in online retail?
Important: Of course, security protocols and encryption technologies must also be implemented when using immersive technologies in e-commerce in order to protect user data - just like in a traditional online store. The applicable data protection guidelines must also be adhered to here in order to adequately protect sensitive data and customer information. The integration of established third-party payment services, such as PayPal or Apple Pay, can increase security, as these services have already implemented tried-and-tested security mechanisms.
If this is ensured, payment processes via VR channels can be designed to be seamlessly integrated into the virtual environment while being secure and user-friendly - for example through virtual wallets, voice assistants or even gestures and movements for confirmation. The VR environment can even offer a higher level of security for authentication processes than password entry. For example, authentication can take place using a pattern in the VR environment that users trace to confirm their identity.
How do I strategically implement AR or VR in my company?
The use of immersive technologies in e-commerce offers enormous potential to take the customer experience and personalization to a new level. It enables companies to engage with customers in an innovative way and present products very close to the physical world. Organizations that establish these possibilities in their omnichannel strategy today will most likely have a competitive advantage in the future. You can find more in-depth insights and recommendations for setting up a successful omnichannel strategy here.
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Dorothee Haensch
