Key takeaways
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Augmented reality is driving sales on top of engagement for fashion and beauty brands that are investing in the technology, either through social media platforms or on their sites.
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On e-commerce sites, viewing 3D models in AR increases conversion by up to 250 per cent.
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While AR skills are still nascent, tech platforms are investing in tools to make it more accessible.
SAN FRANCISCO— Last week, Tel Aviv-based influencer marketing agency Leaders Group introduced the first marketplace for people who design and build augmented reality filters. Called Creators AR, it operates like an Etsy-style marketplace: creators list their price and profile, and brands can commission them to design custom assets.
Founder and CEO Eran Nizri says the platform was created after the agency found that both brands and AR artists were increasingly asking to work together. Nizri says that influencers who use AR designs see much higher engagement, and during a time when people are staying home, he anticipates that creativity will flourish.
As more retail stores temporarily close due to the Covid-19 pandemic, brands must navigate how best to represent themselves to mobile and online shoppers. Many are turning to AR, which has shown to increase engagement and conversion and is becoming both more accessible to brands and more familiar to consumers.
AR most commonly uses a smartphone camera to overlay digital content into the physical world, offering both escape and practicality. It’s also a globally relevant tool. An online shopper in California can better understand the size of a Rebecca Minkoff bag by visualising it on their kitchen table; someone in London using Gucci’s app might be convinced to buy an Ace sneaker after seeing how it will look on their feet; someone browsing Facebook in France can swipe through We Makeup products with a selfie filter.
AR is becoming commonplace in part because tech platforms are integrating tools that place AR within reach. Last week, Shopify made it easier for any brand to add AR content to their website, and Apple introduced an iPad Pro with a camera that makes it easier to place AR content in the real world. In the past year, Pinterest and YouTube have both added AR makeup try-ons, and Facebook and Instagram have begun rolling out AR-enabled ads and AR-enabled posts.
Snapchat’s selfie filters, which were introduced in 2015, ignited the idea of AR being an everyday pastime. “People are realising that there’s been this consumer shift around the camera. It’s where people are spending more and more time,” says Snapchat’s Carolina Arguelles, who leads its global product marketing in augmented reality. She says that fashion and beauty brands, in particular, have been leaning into AR more than ever. “They’re really starting to understand that this isn’t just new tech, but an existing opportunity that’s here and ready for the taking.”
Standing out on social
AR assets generally require products to be rendered in realistic-looking 3D using the same tools for creating video game characters, CGI movie effects and digital clothing. AR creation is still a nascent skill. “There is no such person who is a native AR developer yet, so everyone is still learning,” says Tamara Gaffney, VP of decision strategy at digital intelligence platform Quantum Metric. “But the amount of creativity and innovation is reaching an inflection point.”
Arguelles suggests that brands first identify if their objective is to build engagement and buzz, help customers consider an e-commerce purchase or to encourage existing customers to become advocates by sharing content. Some Snapchat AR experiences have become more educational; Olay, for example, outlined a step-by-step skincare process. On Snapchat, people can make their own AR filters for free; like Facebook, it has a list of vetted creators and agencies that it recommends to brands. Arguelles says there has been a rise in creators who have no previous 3D experience.
One is Santa Monica-based Vertebrae, which has worked with Fossil, Herschel and major European luxury brands. Vertebrae helps brands create, optimise and deploy 3D and AR content across websites and social platforms. “Our mission is to bring the in-store shopping experience online to make it feel like somebody has all the value of being in a retail store [while] shopping from home,” says Vertebrae founder and CEO Vince Cacace.
Cacace says that brands have begun investing in in-house AR tools and talent. Now that early experiments have proven effective, they’re considering how to make it a more meaningful piece of the product catalogue. “We’re moving from a phase of early adopters to the early majority,” he says.
Instagram began testing AR try-ons in October with brands including Nars and Oliver Peoples. In the first two months of its pilot, it found that 24 per cent of people who viewed an eligible product display page used the AR try-on feature and that people on average tried on three different AR products.
Oliver Peoples added AR in Instagram Checkout so that customers who can’t access stores can preview how frames will fit, and partnered with influencers to promote the try-on feature. CEO Rocco Basilico says that he sees AR as a way to enrich customers’ experience of the brand online and as a way to enhance influencer marketing by allowing creators to promote products in a more interactive way. “AR has the potential to affect daily behaviour for the vast majority of consumers, completely changing the way we experience a brand,” he says.
Instagram Checkout has begun testing try-ons for cosmetics and eyewear. Once users click on an AR-enabled product post, they can click to “try it on”.
© Ray Ban
“It’s becoming an expectation to try on before you buy,” says Nars VP of global digital strategy and social engagement Dina Fierro. Nars has implemented AR try-on in e-commerce, social media and physical retail settings, measuring success of the experiences by looking at time spent with the content, rather than direct conversions, Fierro says. Instagram Checkout has proven to be a strong driver of discovery and consideration for the brand, with AR bringing consumers closer to transacting on Instagram — which stands to be a crucial tool as Instagram pushes into commerce.
On YouTube, Nars used AR try-on in five markets; in Japan, she says, AR engagement “over-indexes dramatically — they have an expectation of being able to try on product in that way”. The coronavirus, she says, if anything, might cause an acceleration in virtual try-on in the US. “Right now, it’s important for consumers who want to have the comfort of their favourite products delivered,” she says. As AR activations become available in new settings, Nars plans to keep investing in the technology.
E-commerce integrations
While YouTube’s AR experience is well done, Fierro says, it’s exclusive to the mobile app, limiting the audience. Bringing AR out of apps and onto e-commerce sites opens the technology up for more adoption. Nars, for example, sees higher engagement rates on its site, but Fierro acknowledges that those consumers are already more likely to be considering a purchase than those on social media.
To that end, Shopify introduced the ability for all merchants to add 3D models to product pages, including the ability for them to request any product to be 3D modelled starting at $100 for simple products, on all major browsers and devices. Customers can twist and turn the 3D models to inspect products or view the object in their own environment at scale using AR.
Shopify has found that viewing 3D products in AR increases conversion rates by up to 250 per cent; Rebecca Minkoff, which participated in early tests, found that visitors who interacted with a 3D model were 44 per cent more likely to add the item to their cart and 27 per cent more likely to place an order. When a customer viewed a product in AR, they became 65 per cent more likely to make a purchase.
Rebecca Minkoff was one of the first brands to test AR-enabled 3D products on Shopify. The same 3D model can be used to generate photorealistic images, color variations, lifestyle shots, virtual reality experiences and animations.
© Rebecca Minkoff
CEO Uri Minkoff says that viewing an item in one’s space was primarily a fun way to boost engagement; he didn’t expect it to have that effect on conversions. He says that customers interacted more with the 3D model on the product page than using the 3D model to view the item in their own environment through AR.
“It is still early days,” Shopify head of AR and VR Daniel Beauchamp says. “People are going to start expecting 3D models; that’s why it’s important for Shopify to get in early so that we can get our merchants prepared.” He anticipates that in a few years, viewing 3D models in AR on product pages will be as expected as images are today. He anticipates that eventually, creating 3D renders will be possible with a smartphone or other accessible device, obviating the need for a third party to create the assets.
Eventually, more brands will begin to hire or train people in-house, Arguelles says, adding that Ralph Lauren has a team of 3D experts; Tommy Hilfiger’s new Stitch incubator is training employees on digital design skills. Demand for AR and virtual reality engineers increased 1,400 per cent in 2019.
Creators AR has found that influencers who use AR filters give brands 457 times more exposure than content that does not use these filters.
© Creators AR
Increasing accessibility
Although AR is increasingly accessible — many of the independent artists on Creators AR can design a custom Instagram filter for as little as $100 — for most sophisticated AR experiences or 3D models, “it’s not necessarily cheap yet,” according to Facebook product manager Olivier Bouan. But platforms are incentivised to make it easier for brands to add AR content; if brands garner more engagement from potential customers, platforms like Facebook will be more valuable to them.
“We’re rapidly turning our eye to how we can start to make this accessible to more advertisers and what the obstacles are. Many of them are starting to see their returns, so it’s just a question of how do you multiply that,” Bouan says. “The sooner we lower those barriers, the sooner we’ll be able to get more of these products online, more of these products in our shopping experiences and then out to more people.” He says that Facebook (including Instagram) is the largest AR platform on mobile with hundreds of millions of people using AR effects every month.
“We’re obviously not the only company working on this kind of thing. Increasingly people will expect to be able to try things on. A year or two from now, it’s not [going to be] a question of if AR works, it’s more of a question of how broadly is it available?”
Gaffney, of Quantum Metric, recommends that all brands be thinking about an AR strategy — within reason. “The question is, how far along are they with other things they have to do? A lot of things will impact the bottom line more than AR is today. But if those things are well-developed, AR is super important.”
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