Diving brief:
- As brands and consumers increasingly take interest in Snapchat’s AR features, the platform’s latest research shows that its virtual testing tools are attracting shoppers. Two-thirds of consumers are less likely to return a product after using an augmented reality feature, according to an Alter Agents survey commissioned by Snap and Publicis Media from 4,028 shoppers aged 13-49 in the US, UK, France and Saudi Arabia.
- Nearly three-quarters of respondents said they were likely to buy clothes after using an augmented reality experience in the future, followed by retail (70%), beauty (69%), travel (64%) and food and drink (60%).
- Eighty percent of survey respondents said they felt more confident in their purchases when using augmented reality tools.
Overview of the dive:
Snapchat has promoted its AR commerce research by releasing new augmented reality features in its app.
In April, the social network published a report stating that 92% of Gen Z shoppers prefer AR reality tools for e-commerce. This survey of 16,000 consumers in 16 markets found that Gen Z consumers preferred AR shopping tools over millennials and Gen Xers. The following month, the company unveiled several new AR tools designed to connect brands with shoppers on its platform.
In addition to researching the impact of AR tools on consumer habits, Snapchat and its growing list of partners have been experimenting with AR tools as social commerce is expected to grow. In the years leading up to its recent AR feature rollouts, the platform has partnered with brands and companies such as Toys R Us Canada, american eagle, Gucci and Adidas at interact with products beyond typical 2D images. Meanwhile, an Accenture report found that the global social commerce market could reach $1.2 trillion by 2025.
Amid its push for greater AR engagement, Snapchat has also grown its overall user base and revenue. According its report on the results of the first quarter of 2022, the social network’s revenue rose 38% from a year ago to $1.06 billion. More than 250 million Snapchat users engaged with its AR features daily on average, and its daily active users grew 18% from a year ago to 332 million, according to its quarterly earnings report.
But as Snapchat tries to lure brands onto its platform with its AR tools, retailers have started releasing their own virtual product testing features. In 2020, Amazon released its Room Decorator tool, an augmented reality feature that allows consumers to virtually decorate their homes with furniture. Earlier this month, the e-commerce giant released another AR tool to allow shoppers to virtually try on their shoes. Similarly, Pinterest launched its Try-On for Home Decor tool in February, allowing furniture shoppers to view furniture and their homes using AR technology.
“The future of shopping is here today, through the use of augmented reality. It has continually proven its value to shoppers as a way to show how a brand or product can fit into their lives. Helen Lin, chief digital officer at Publicis Groupe, said in a statement. “Virtual try-ons and 360-degree product demos can help reduce the need for returns and in-store visits. Think about the impact that it could have on customer service, supply chain and overall sustainability.
Digital platforms rely on AR functionality to inspire consumer confidence as retailers grapple with the complicated headache of product returns. Retailers predicted consumers would return more than $761 billion in merchandise sold in 2021, a January report from the National Retail Federation and Appriss Retail revealed. Amid the rising costs and environmental impact of returns, some retailers, including Zaraare following the lead of electronics retailers in charging customers for returns.
