One of the most serious obstacles that online merchants face today is the low conversion rate. In spite of the multiple benefits of online shopping, conversion rates for the same average around 3%.  Whereas that for brick and mortar shops hovers around 30%. Online conversion rates vary with industry, geographic region, device, holiday seasons, etc. That said, a conversion rate of 5% or above is considered quite exemplary for online merchants,.  

In this article, we will look at the top three reasons why online merchants fail to convert and how Augmented Reality can help them address these issues.

1. Poor Product Data

Product data is what connects your products with what the consumer needs. Poor product data serves shoppers incomplete, inconsistant, and/or unreleated product content. Poor content leads to loss of opportunities that may have ended in a purchase.

This is one of the problems faced by small, as well as, large retailers. Creating and maintaining product content and attribution, inline with the user’s expectations and the current language trends and applicability of the product is difficult. Further, this requires constantly updating an ever increasing amount of content both inside and outside the retailer’s platform, which is an unnecessary burden.

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Online stores these days do give consumers quite rich content including product visuals, feedback, question forums and recommendations, but most stores lack an organized structure to present this data to the user in a searchable/filterable format.

As a result, customers lose trust as well as interest when they do not see what they searched for, even if you have such products in your inventory. Edgecases’s research states that 40% customers express distrust of search due to irrelevant results. These are customers who have the highest buying intentions, as they specifically searched for a product. What happens is that a customer in the last stage of the funnel is being pushed back to the first stage, rather than being propelled towards conversion.   

2. Disconnected omnichannel experience

Customers prefer a seamless shopping experience, whether it is through an online platform or at retail outlets. An online presence of your brand should complement the shopping at a retail outlet, and both should work in tandem to provide the shopper an omnichannel experience.

An omnichannel approach is a marketing method that uses multiple channels to reach out to the customer, such that each channel is aware of how the customer interacted with another channel. The data is used to guide the customer’s journey and experience. This customized experience, backed by data, provides a unique experience to the customer and instills brand loyalty. In fact, reports by Retail Insights state that brands that utilize an omnichannel strategy see a 15% to 35% boost in average transaction size.

But businesses struggle to keep up with the changing technology and implementing the same for their marketing channels. Periscope’s survey reported that 78% brands have no one-brand experience across their platforms. The main reason is linked to customer data. The digital backends are often obsolete and rudimentary with customer data being unorganized and stored in different silos. Data, even if collected properly has to go through a series of steps before it becomes actionable data that can be implemented across other channels.

3. High shipping and return costs

Customers have now become accustomed to free shipping and returns, to the point that many customers misuse these policies. For online retailers, shipping and especially, return costs are more than an overhead cost.

While shipping costs can be optimized properly depending upon the location of the nearest warehouse and the customer, returns are a nightmare for the retailer. From the time a product is collected from the customer, shipped to a warehouse, entered in the inventory management and sold again to a customer, the retailer’s margin for that product becomes negligible, if not negative.

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Returns are a necessary evil that online retailers must accept. For some industries, as the apparel sector, return rates can be as high as 30%.  Retailers cannot even experiment with their return policies, fearing backlash and reduced sales when popular competitors are doing it for free. But the truth is that returns are slowly eating away the margins of retailers.

How can Augmented Reality help?

AR, when leveraged in your marketing solutions, helps address the aforementioned obstacles. Augmented reality is a technology, that enhances the view of the surroundings with relevant digital data. So your customers could either be seeing your products through an AR-enabled headset or they can see the products through an AR-enabled mobile app. In any case, they can see digital projections of say, features, applicability or use cases. This helps solve the lack of product content within the content management systems for retailers.

Cost of returns augment

Similarly, AR helps to bridge the gap between online and offline channels by allowing customers to ‘try and assess’ even if they are browsing online. For instance with a mobile AR solution like Augment, shoppers can simply tap the “view at home” button inside their favorite retailer’s app to see the product in life-like 3D augmented reality.  The shopper can quickly get a sense of the size, design, and mode of operation as if they were in the store.  AR brings the tangible in-store experience to digital shops.  

With this, augmented reality helps remove the guesswork of shopping online. AR helps manage customer expectations and allows them shop in full confidence. Customers cite incorrect size/color and different expectations as a major reason for returning goods. If customers are given a better perception through Augmented Reality, businesses can decrease the cost of returns.

Augmented Reality is being used by numerous online stores to provide consumers a better and above all, a unique shopping experience. While addressing the pain points of online retailers, AR also has a long list of benefits that can help you to increase customer engagement and boost your sales in the long run.


Augmented reality shopping