Is e-commerce still profitable in 2019
How virtual reality in e-commerce moves consumers to buy
The new technologies virtual reality and augmented reality offer a multitude of possibilities in e-commerce. But are there already application examples in online shopping? And what do consumers think of virtual reality and augmented reality in e-commerce anyway?
According to a survey by Capgemini from 2018, the use of AR and VR applications in companies will be standard in 2023. 28 percent of German companies are already introducing virtual reality solutions and 38 percent are introducing augmented reality solutions. There are more or less successful practical examples and with some projects the development was stopped after a short time. It turns out that AR and VR can create added value in very different product categories. For example in the areas of furniture (Otto), clothing (LegoWear) or electronics and technology (Saturn).
Otto “yourhome”: furniture planner app with 3D augmented reality
For example, the German mail order chain Otto has been offering a virtual furniture planner with the yourhome app since 2018. This enables customers of the online shop to arrange products such as furniture or decoration in their own four walls with the help of augmented reality - before buying, as an aid to check the proportions, after buying as a furnishing planner.
The app calculates the room dimensions in relation to the product using the smartphone camera. This creates a true-to-scale, three-dimensional room for furnishing from the two-dimensional image. In addition, consumers can view the desired furniture in terms of appearance or material from a wide variety of perspectives - unlike conventional product images, which often reveal hardly any details.
Virtual Saturn: online shop with VR support
The electronics retailer Saturn has created a virtual reality in e-commerce with the Virtual Saturn app. In two different environments (loft or space station), customers, equipped with virtual reality glasses and controllers, can discover and place products in 3D and buy them directly or obtain advice from connected experts. Gamification elements for measuring, creating photos or drawing round off the experience. The required equipment can of course be purchased directly from Saturn. The function is not only available to customers at home as a VR app, but also in selected retail markets.
Lego Wear Augmented Reality: Pop-up Store
At Fashion Week 2019 in London, the LegoWear brand, in collaboration with SnapChat, surprised everyone with an empty pop-up store. This served as a portal to an exclusive online shop by means of an issued SnapCode. The products available there could be viewed with augmented reality placed on Lego dolls and bought directly online. An empty clothing store that will only become a shop through augmented reality. This linking of a real pop-up store as access for an AR / VR shopping experience shows how creatively and innovatively the technology can be played with and how social media channels can also be integrated.
Virtual reality in e-commerce: what consumers think of it
According to a 2016 survey of 1,500 consumers by the polling institute Ipsos, 52 percent of Germans can imagine that virtual reality applications are useful when shopping. 47 percent also find this idea appealing. In a US study, around 69 percent of respondents indicated that virtual reality and augmented reality will play a role in e-commerce. The central finding: around half of the respondents found an interactive 3D model more helpful than images when shopping online (Artec 3D 2019). So how are the VR and AR solutions offered so far to be assessed?
Virtual reality in e-commerce: higher conversion rate
There are numerous other examples from brands like Gap, L’oréal, Ikea, Ebay, Apollo and many more. But the three use cases described make it clear that virtual and augmented reality in e-commerce and retail can boost conversions, strengthen customer loyalty and create positive PR. However, the exact number of cases to monitor success is currently not yet public. Only sales forecasts are already available: According to market research by the organization SuperData Research, sales with VR on the global consumer market in 2021 will amount to around 19 billion US dollars (Statista 2018).
Aspects that are currently still missing in the majority of applications are often the usual shopping functions such as filters, sorting by price, navigation menus, ratings and specifications. It is important to round off the shopping experience and to offer users the usual functions for the greatest possible convenience without compromising.
High effort for capturing the products in 3D
The biggest problem with using virtual reality in e-commerce is the high effort involved in rendering and capturing the range with 360-degree cameras and 3D measuring devices. As a result, not all products are available in the virtual world for applications like those from Saturn. The larger the range, the more expensive and time-consuming it is to bring together all of the available data in order to generate three-dimensional models.
Only when virtual reality and augmented reality in e-commerce not only offer visual incentives, but also use the data in the best possible way in order to present the entire range of the product range in detail, the technology is helpful in the eyes of customers when choosing a product.
Web-based VR and AR applications available
If you are now considering integrating virtual or augmented reality into your online shop, you have several options. So far, the implementation has mostly been designed as a feature of an app (either mobile or for VR devices). Web-based virtual reality solutions for e-commerce have also been available since autumn 2018.
With editors like Amazon Sumerian or Spark AR from Facebook, solutions can be easily created, edited and published with a web browser. The Shopify AR shop system offers retailers prefabricated AR catalogs for individual use. This means that smaller projects can be implemented cost-effectively, but the possibilities for getting creative are limited. Numerous service providers come into play here, taking on the planning, development and maintenance of the applications. Depending on the scope of the project, this can be expensive, but the freedom of design is greater and the quality is better. Qualitative VR solutions from such providers start at around 20,000 euros. The acquisition of the hardware for the implementation amounts to at least 2,000 euros. According to a Deloitte study from 2018, companies will invest around 850 million euros in virtual, augmented or mixed reality solutions in 2020.
Virtual Reality in E-Commerce: Weighing up effort, costs and benefits
Whether it makes sense to invest in VR and AR for an online shop depends on several factors: On the one hand, not all product groups can be sensibly designed in 3D. Games, technology and experience-oriented products as well as products whose dimensions can be represented three-dimensionally on people or rooms are usually better than others. This becomes exciting, for example, in the areas of entertainment, travel, beauty, fashion or lifestyle.
On the other hand, the characteristics of the target group are decisive. This should ideally be tech-savvy as well as willing to try things out and enjoy gamification elements. In addition, they should either have the necessary equipment or be interested in buying and thus have enough purchasing power to cover the acquisition costs. Depending on the type and scope of the equipment, these are between ten and 1,000 euros for VR glasses / smartphone headsets / controllers. There is also the entry barrier for downloading an app. Previous studies show cautious attitudes towards purchasing VR equipment. According to a survey by Bitkom from 2018, only eight percent of those surveyed have their own VR glasses, 17 percent can imagine.
VR and AR applications require good usability
However, once this initial inhibition threshold has been overcome and the required technology is in place, the solutions show an uplift in conversion rates and contribute to customer loyalty. An absolute prerequisite for this is, of course, consistently good usability of the shop and the VR / AR application. The most important criterion is that the VR and AR experience brings relevant added value to the customer experience and (except in the corresponding industries) more than just that has to be a nice, additional gamification factor.
As long as there is concrete added value for the consumer, the high costs and effort are worthwhile, since the buying experience in e-commerce is a decisive competitive factor in the strong competition in the overcrowded online market. An integrated virtual or augmented reality service experience can, under certain circumstances, justify higher product prices if the user feels better advised, informed or entertained as a result. (sg)
You can read more about virtual reality here:Study: Augmented and Virtual Reality in Retail
The customer experience in the development of web shops is becoming more and more important. On the programming side, this works well with NoSQL databases.
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