The technological development of the 21st century gave birth to online E-Commerce marketplaces across the globe. The share of the online marketplace was limited in 1998, with annual sales in the U.S. accounting for $ 5 million, which rose to $ 389 million in 2016 (Eurostat, 2019). Researchers state that increased demand for online marketplaces is due to increased social media platforms and marketing strategies. Yet, there is an integral role being played by disruptive Technology, which is often ignored. Lavinsky (2014) argues that careful product placement and marketing strategies have caused a boost in online sales and increased the popularity of e-commerce marketplaces.
What is 3D Technology, and What Can It Do for Your Business?
Even though the argument presented by Lavinsky and several other researchers in terms of sales conversion rate is true, they have failed to identify disruptive Technology’s role in customer engagement, resulting in definite sales. Furthermore, customers in the Luxury Industry elaborated that they would buy Luxury Products online if the E-Commerce Marketplaces were integrated with 3D & A.R. Technology (Monotype, 2019).
DISRUPTIVE TECHNOLOGIES
With the development of cellular devices, 4G internet, and faster website loading speed, consumers can view their desired products online. Then, they bought them from the retail stores in person. These trends are the news of the past, as the advent of 3D & A.R. technology can ensure better customer engagement and definite sales, as argued by Raska & Ritcher in their thesis “Influence of Augmented Reality on Purchase Intentions” (Raska & Ritcher, 2017). Monotype presents similar research conducted by Green Insight, which took into account interviews from 1300 consumers, out of which 53% stated that they would buy a product they’re interested in from a Luxury Online Store if it has 3D or V.R. technology deployed on their website (MT, 2019).
Mike Sorrenti, President of Gamepill, stated the following about his first encounter with the 3D & A.R. Technology (MT, 2019):
“My introduction to V.R. was unforgettable. It was like seeing color T.V. for the first time; I immediately scrambled to get a team together to create a prototype in V.R. to learn the ropes, and the business has grown organically from there.”
This article will further illustrate the impacts of integrating 3D & A.R. Technology in e-commerce websites. It will also demonstrate how this Technology can address the limitations of online shopping and highlight the investment made into this field by utilizing examples from luxury brands currently deploying this strategy.
LIMITATIONS
With the advent of technologies such as the Internet and e-commerce marketplaces, consumers now can buy millions of products online and on the go, as they please. However, since they could not touch or try the products online, they were more reluctant to purchase on the Internet, which has hindered the growth and development of the E-Commerce Marketplace (Cuomo et al., 2015). According to the research conducted by Street Fight Surveys, only 12% of Luxury Brands stated that they are interested in exploring A.R. technology (Miles, 2019), which means that almost 88% of luxury brands across the globe are still missing out on this opportunity. Furthermore, Miles (2019) illustrates that 12% of interested companies only became inclined towards implementing this Technology after the recent success of PokemonGO in 2016 (Miles, 2019).
The online sales conversion rate is quite low for most luxury brands that fail to provide a multi-sensory shopping experience, which their high-end consumers usually expect. Such shortcomings hinder the luxury business’s growth in the digital market, even with high-quality products and almost perfect services (Cuomo et al., 2015). Research conducted by Cuomo and the team also illustrates that customer engagement by 2D marketing and images is quite low as compared to the 3D & A.R. technology; their research concluded the following:
The research finding clearly illustrates that customer engagement increases by more than a minute with the implementation and integration of 3D & A.R. Technology, and the customers are willing to spend more, and the intention to buy also increases by 74% (Cuomo et al., 2015). It illustrates that the intention to buy and sales conversion rates will be high if Luxury Brands deploy 3D & A.R. Technology in their online marketplace.
COUNTERACTIVE MEASURES: 3D & AR Technology in E-Commerce
To overcome the limitations and shortcomings of the online marketplace, brands have invested billions of dollars in social media marketing campaigns and product shoots to make the decision-making process for consumers smoother. The system of multiple product images then evolved into a 3600 viewer technology accompanied even by a thorough video to give shoppers a better understanding of the product and increase conversion rates (Yemchuk, 2016). However, an even more advanced technology, the 3D product configuration, integrated with A.R. and V.R., witnessed a peak in sales amongst luxury brands.
BENEFITS OF AR & 3D TECHNOLOGY
Limitations emphasized earlier in this article show that consumers lack trust, surety, and convenience while making online purchases. Hence, no matter how established a brand is or how positive it maintains an online presence, consumers won’t opt to make an online purchase, as illustrated earlier by Cuomo (Cuomo et al., 2015). If consumers cannot relate to the product or comprehend how it can be personalized according to their needs, the sales conversion rate would remain low as the consumer would only be engaged on the site for 12 seconds. Therefore, brands have invested billions of dollars in R&D to ensure high conversion rates by deploying disruptive technologies (Cipresso et al., 2018).
According to Statista, the retail online sales from worldwide e-commerce businesses demonstrated a stagnant increase of only $200-$300 Million, predicted to increase at a rate of $600- $700 Million since the integration of 3D & A.R. Technology (Statista, 2019).
A.R. and 3D Technology have proven to be the driving force in enhancing the consumer experience, nurturing interests in online shopping, and increasing conversion rates and sales.
Following are some factors contributing to increasing the sales of Luxury Brands running online marketplaces and have deployed A.R. & 3D Technology:
Engagement
Research in consumer behavior demonstrates that the chances of sales are increased when consumers are engaged with a given product online, whether in the form of multiple images, 360O videos, or a 3D render. However, with all the e-commerce sites uploading videos and images of their products, the only strategy providing them with a competitive edge is using 3D renders. This allows potential customers to view a product in depth and be engaged so they can relate and identify whether making such a purchase is based on their needs.
Storytelling
On the other hand, augmented Reality (A.R.) ensures higher sales with a different approach, allowing consumers to comprehend the story behind creating any given product or brand itself. Businesses and e-commerce sites can create 3D videos and post them on their websites, giving consumers a glimpse behind the curtain and understanding how the product was manufactured and what it would bring to the customer. In addition, they can also allow them with features to custom create their products using 3D/A.R. technology online.
Curiosity
When consumers view a brand story using A.R., they become more curious about the details of the product and whether they can carry the product fashionably or not. Businesses have deployed certain features in A.R., fulfilling their curiosity to know more about the product and ultimately forcing them to purchase.
Accuracy
Another limitation hindering online businesses is the lack of product description and presentation accuracy. With reported scams and negative online shopping experiences, users are now concerned about the inaccurate information about online products and the parcels they receive. With 3D and A.R. technology, customers can get accurate details of the products as if they are viewing them in real life.
Personalization
To boost sales, businesses offer free/ paid personalization on their products; however, in most cases, users cannot precisely picture the final result. Furthermore, consumers previously were unable to put themselves in the new outfits. This new technology allows businesses to overcome these issues by offering real-time and interactive 3D models.
HOW 3D & AR TECHNOLOGY BOOST SALES IN LUXURY MARKET
In the hypercompetitive market, where economic uncertainties are forcing businesses, especially luxury brands, to develop and implement innovative strategies to ensure sales and sustainable growth, the convenience of shopping online becomes a major objective. Luxury brands today favor 3D & A.R. Technology as it ensures customer satisfaction by providing a virtual try-on of products they wish to purchase online.
This is especially true for the luxury industry, as they cannot implement strategies such as bulk sales or offer discounts to boost sales. Numerous luxury brands today are providing consumers with a 3D render of their products online and using it to illustrate to customers how the product would look with the added customization features.
For example, Baume, a Luxury Watch brand, not only offers customization of their icon products but allows consumers to build their watch from scratch and see how it might look on their wrists.
Another luxury brand “SCHMiDT,” provides online personalization, enabling customers to build a piece of furniture before even ordering the product, thus making clients quite sure how their new furniture would suit their kitchen.
Furthermore, “Kenzo” also allows customization of their shoes online. Even the basic details, such as the outer sole, can be modified in terms of design and color, and the brand renders a 3D version in real-time. This satisfies consumers that the decision they are about to make to purchase the product is right for them.
However, all of the above have been offered in some form or other by numerous brands. But, the jewelry market is the most crucial business area or the uncharted territory for businesses operating in luxury brands. Customers are still reluctant to purchase jewelry online, as they are quite expensive, and high levels of customization are always required in terms of ring diameter, stone size, and materials. Yet “Edenly” has revolutionized online jewelry shopping by addressing all customer queries by integrating 3D customization of products and a real-time 3D render of how the end product will look. Furthermore, they even provide an option to create jewelry from scratch and render a 3D image of how each customization would look.
CONCLUSION
Ultimately, it can be concluded that marketing and consumer behavior research indicates that 3D & A.R. Technology keeps consumers engaged in a product or an online advertisement for more than 83 seconds. This number is significantly higher than the 12-second engagement from an image or an online video. Hence, if a Luxury Brand wants to increase its online sales, it must integrate 3D & A.R. Technology into its online marketplaces to ensure definite sales and higher conversion rates.
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AUTHOR
Yahong Zhang is head of marketing at Hapticmedia, a provider of Cuisine 3D. She also writes for Cwordsworthblog about SEO and inbound marketing for startups.
REFERENCES
- Eurostat, (2019). Online Shopping Trends 2019 & Key Figures – What you need to know. Nation Master. Retrieved from: https://www.nationmaster.com/ecommerce
- Lavinsky, D. (2014). How To Increase Conversion Rates. Forbes. Retrieved from: https://www.forbes.com/sites/davelavinsky/2014/03/18/how-to-increase-conversion-rates/#5f76653b16d4
- Raska, K. & Ritcher, T. (2017). Influence of Augmented Reality on Purchase Intentions. Jonkoping University. Retrieved from: http://hj.diva-portal.org/smash/get/diva2:1115470/FULLTEXT01.pdf
- MT (2019). What brands need to know for success in A.R. and V.R. Monotype Imaging Inc. Retrieved from: https://www.monotype.com/resources/articles/what-brands-need-to-know-for-success-in-ar-and-vr/
- Miles, S. (2019). 5-Brands innovating with Augmented Reality. Street Fight Magazine. Retrieved from: https://streetfightmag.com/2019/01/02/5-brands-innovating-with-augmented-reality/
- Cuomo, M. T., Metallo, G., Scannapieco, V., & Tortora, D. (2015). Consumers augmented experience and digital engagement tools: Some evidence. Research Gate. Retrieved from: https://www.researchgate.net/publication/297283204_Consumers_augmented_experience_and_digital_engagement_tools_Some_evidences
- Yemchuk, O. (2016). How Virtual and Augmented Reality will Influence Decision-Making. ZOOVU. Retrieved from: https://zoovu.com/blog/how-virtual-and-augmented-reality-will-influence-shopping-experience/
- Statista (2019). Retail e-commerce sales worldwide from 2014 to 2021 (in billion U.S. dollars). Statista.com. Retrieved from: https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
- Cipresso, P., Irene Alice Chicchi Giglioli, Mariano Alcañiz Raya, and Giuseppe Rival. (2018). The Past, Present, and Future of Virtual and Augmented Reality Research: A Network and Cluster Analysis of the Literature. FRONTIERS IN PSYCHOLOGY. Retrieved from: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6232426/
- Scholz, J. (2018). Augmented Reality Marketing: Moving From Gimmick to Strategy. SEJ. Retrieved from: https://www.searchenginejournal.com/augmented-reality-marketing-strategy/254765/
