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The Missing Link in E-Commerce: How AR, 3D, and XR Bridge the Personalization Gap
The Missing Link in E-Commerce: How AR, 3D, and XR Bridge the Personalization Gap

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The global retail market continues to burgeon. Valued at $30.0923 trillion in 2024, The Business Research Company, a leading market researcher, predicts it will continue to expand at an average rate of 5.26% per annum to reach $48.8679 trillion by 2033.

Going by post pandemic hype, one would have expected a big chunk of the $30 trillion retail market to be e-commerce, but surprisingly, not. Numbers published by The Business Research Company peg the estimated market size at just $5.8 trillion in 2023 and project it will reach around $8.5 trillion by 2030.


So, what is holding retail e-commerce back?


The business benefits of e-commerce are tremendous—the ability to reach millions of potential customers in domestic and international markets, connect with customers in their own language, stock thousands of SKUs across several cost-effective warehouses, automate extensively, cut operational costs, and pass some of these benefits to customers as discounts and offers.

Besides the business benefits, the customer benefits are just as impressive. Customers have the ability to shop 24/7 from the comfort of their homes, pick and choose from thousands of products, and have these delivered to one's home, sometimes, within hours.

A significant stumbling block to the retail e-commerce customer story however, is the lack of personalization that is offered by a brick-and-mortar store. This results in a return rate of between 16.9% and 30%, and amounted to a staggering $890 billion in 2024, according to the National Retail Federation (NRF).

Add to this the logistic and warehousing costs of picking up the returned products, storing them, checking for defects, and deciding whether to retain or discard them, and the opportunity offered by retail e-commerce loses some of its sheen.

 

Can immersive AR, 3D, and XR be the e-commerce industry’s answer to personalization?


With the rise of augmented reality (AR), 3D, and extended reality (XR) technology, e-commerce retailers have the opportunity to address the personalization gap by creating exclusive showcases at their physical stores. With the improvement in mobile technology, apps, and high-speed internet, e-commerce retailers also have another opportunity to connect with customers anytime, anywhere on web stores, as well.

In an immersive commerce environment, customers can interact with a product intuitively -zoom in from different angles, review the product’s look more closely, place it virtually in a real setting, and do virtual try-ons. While consumers enjoy this interactive experience, marketers have an opportunity to create more engaging and informative content for better decision-making.

Once expensive, complex to deploy, considered futuristic, and affordable only to large brands, immersive retail like AR, 3D and XR are becoming increasingly affordable. Fibbl, a Stockholm-based company, recently launched a plug-and-play platform that enables retailers to integrate 3D and AR into their e-commerce sites. Cloudinary 3D, an AR and 3D experience company, also promises to simplify the generation of immersive content so that brands can create high-quality experiences quickly and cost-effectively.

Imagine consumers visiting your website, and instead of viewing static pages, wearing an AR headset to take a virtual tour through your store, pick stuff off the rack, rotate and explore thesize, texture, and design from different angles, and make an informed purchase decision. E-commerce brands adopting 3D and XR found that consumers spent 80% longer on their pages interacting with the immersive experience and noted a higher conversion and lower return rate. Research also showed that immersive product content reduced cart abandonment by nearly 50% and returns by a third.

Another big advantage is the resources saved by clothing, footwear, cosmetic, and furniture companies in creating and distributing sample products to stores. Several retail brands feel this adds to their sustainability efforts, especially as consumer awareness and desire for sustainability heighten.


Repositioning the brand with AR, 3D, and XR


While consumers enjoy the interactive, gamified experience of virtual shopping, some companies, like Walmart and Benefit Cosmetics, are seeing an opportunity to brand innovatively, cement loyalty, and stand out creatively.

With over 4,000 brick-and-mortar stores, Walmart’s predominant clientele is female white Baby Boomers. The company pivoted toward Gen Z and Gen Alpha shoppers by leveraging the metaverse, first via Walmart Land and Walmart Universe built on Roblox and, more recently, Walmart Realm built on Emperia. Realm is an independent web platform that seeks to take advantage of the surge in online shopping to develop an emotional connection and interact with younger customers.

Another example is Benefit Cosmetics, which launched The Benemart. Built in partnership with a 3D virtual shopping experience provider, The Benemart, enables shoppers to dawn an avatar and browse the aisles as a group, engaging in voice chat and playing games. when e.l.f. Beauty launched their Virtual Luxe Lounge, they became yet another example of a retailer offering customers an immersive e-commerce experience on web and mobile browsers.

While the use cases for fashion, clothing, and cosmetic industries are apparent, the opportunities for e-commerce retailers selling anything from home appliances to hardware tools and electricals to automotives are limitless.


The crucial differentiating features of AR, 3D, and XR


The case for retail e-commerce businesses to harness AR, 3D, and XR is strong, not just because innovative technology is becoming cost-effective but because of the tremendous benefit they offer, especially to small and boutique e-commerce firms with unique products but small marketing teams and budgets. AR, 3D, and XR will be to content creation what TicTok and Instagram are to marketing, the opportunity to be where your customers are, and enable them to buy the right product when needed.

What will set the best 3D, AR, and XR platforms apart from their competitors is the advanced interactive analytics they offer and their ability to integrate with traditional websites and marketing channels while giving consumers a choice to switch to richer immerse experiences when they have the capacity, technology, and viewing gear.

The inclusion of AI capabilities will enable companies to access granular insights into customer behavior and observe movements in real-time to predict customer buying patterns and allow for personalization and store layout optimization.

Immerse commerce powered by 3D, AR, and XR is here to redefine your brand and how customers engage with it. Is your business ready to differentiate itself and rise above the competiton.


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