Why AR Is No Longer a Nice-to-Have this Shopping Season, but a Must to Boost Sales
By Farimah Moeini, Head of Industry - Retail, e-Commerce, Travel Tourism in MENA at Snap Inc.
The much-anticipated fall shopping season has always been a lucrative period for retailers across the region — all the more so this year with e-commerce on the rise and post-pandemic economic recovery well underway.
According to a recent study by Checkout.com, about 83% of consumers in the region have indicated that they’ll keep or even increase their present level of e-commerce spending through 2022. In particular, experts forecast that “social commerce” (s-commerce) will be one of the region’s key e-commerce trends over the next 2-5 years. Already, 14% of consumers we’ve surveyed say they most frequently conduct their online shopping specifically within a social media app.
As digital commerce increases, today’s creative technologies are a double-edged sword for retailers. While they can open up exciting new shopping channels, the online marketplace is an increasingly competitive one. Often, consumers will place more value on a convenient, personalized, and engaging retail experience than on a specific retailer or even a specific brand. Therefore, it both literally and figuratively pays to stand out from the crowd.
Snapping up the opportunity
Within this context, today’s advancements in augmented reality (AR) will prove crucial in helping digital-savvy marketers to win in the upcoming shopping season. These AR tools are far from just ad products — they are immersive and contextual experiences that can be part of a brand’s retail strategy.
AR is now emerging as a powerful tool for shopping, entertainment, engagement, and more. An average of 80% of consumers in the UAE and KSA, for example, expect and desire to use AR as a practical “tool” in their everyday lives. Moreover, interacting with products that have AR experiences leads to a 94% higher conversion rate amongst consumers in these two GCC countries. Globally, AR delivers almost 2x the levels of visual attention compared to their non-AR equivalent.
On platforms like Snapchat, we have seen audiences in the region truly embrace AR. Over 85% of our MENA daily users interact with Lenses every day. Being exposed to AR campaigns, Snapchatters also spend more generally than the average shopper across all Q4 moments. In fact, during the month of November, campaigns running Lenses on Snapchat delivered a 5.5x higher average purchase value compared to the ones running other formats.
This reality presents a great opportunity for brands, but how does one make the most of this potential?
It begins with understanding the celebration cycle. This cycle starts on the path to purchase, as every day before the sales season represents a chance for brands to build interest and create experiences that lead to conversion down the line.
It’s also helpful to think of campaigns that combine entertainment and utility — something that AR is ideal to deliver. A virtual try-on of cosmetics, or a new pair of sneakers, generates light-hearted, shareable content amongst consumers. But it also serves a utility function in enabling them to try products on the go, from anywhere. Approximately 65% of shoppers on Snapchat in KSA and the UAE, for example, agree that AR gives them more confidence about product quality. Over half want to use AR technology to assess products, allowing for a risk-free “try-before-you-buy” experience. Nearly three in four say they’re willing to pay more for a product that promises the total transparency that AR can provide. That has significant implications considering that returns are a $550 billion drain on retailers’ bottom-line globally.
Of course, data-driven measurement needs to sit at the heart of any campaign. For advertisers, we’re bringing the same level of data-driven measurement and management that’s available for video ads to AR. Brands running innovative AR campaigns can now optimize against many of the same goals offered for video ads, and thus more easily combine these tools to breathe life into their campaigns.
As the fall shopping season inches nearer, retailers should ultimately stay focused on a consumer-centric plan based on creating experiences. Technologies like AR are no longer a new innovation or a nice-to-have, but something consumers expect.
