By Matthew Klimpke, CEO and Co-Founder of Vyking.io
UK inflation may have slowed for now. However, with spiralling energy bills and a looming recession that economists agree is only temporarily halted, consumers’ worry about the cost-of-living crisis firmly remains. And it is this worry that has quickly and dramatically reshaped spending behaviours.
Evidently, consumers are looking for ways to save money and cut back, building immense pressure particularly among the online retailer community. ASOS, for example, recorded an 8% fall in sales and 3% revenue dip, resulting in plans to drop 35 brands and close five warehouses, while Amazon recently announced plans to close three UK warehouses.
However, another response to the cost of living crisis has seen consumers become more keen to make the most of their purchasing power. This response, in comparison, creates opportunity. By leveraging technology such as AR (augmented reality), personalisation and an enhanced customer experience, online retailers have the opportunity to help shoppers make informed decisions and ultimately drive sales.
AR technology has in fact become more commonplace of late, driven in part by the pandemic, which drove huge numbers of consumers online. Many brands - particularly in the makeup, footwear and eyewear arenas - looked to emulate the in-store experience with virtual solutions for try-on (VTO). By allowing consumers to see how a product will look or function in their own space before committing to a purchase, the results were huge. L’Oréal, for example, saw conversion rates triple on makeup product pages where VTO was available. By creating a more interactive and engaging shopping experience, brands such as L’Oréal have been able to not only boost sales, but also increase customer loyalty.
While the restrictions to in-person shopping have been fully lifted for some time now, much of the shift to online shopping habits have remained and are now being cemented by the cost of living crisis. This is partially down to the sheer convenience of online shopping. Combine this with the ability to see how a product such as new shoes or a pair of glasses will look with their existing wardrobe - shoppers can avoid the need to make multiple trips to a store. This can save shoppers time and money; especially important in a cost-of-living crunch. And, by helping shoppers make more informed decisions, retailers are able to reduce the likelihood of returns.
VTO also plays an important role in high value purchases, such as luxury goods. While there is often an extended purchase journey, with the time from browse to basket typically taking longer, VTO still has the power to increase interaction times threefold. And if a customer lingers over a purchase, other prompts such as discount codes or time sensitive offers are a retailer’s chance to push a sale over the line.
In the land of footwear - Vyking’s heartland - reports show VTO is seeing the same success as other verticals such as eyewear and cosmetics, with conversion rates almost doubling for the best performing products. Following in Vyking’s footsteps, Amazon and Snapchat have also recently introduced VTO for shoes, with Snap reporting up to a 94% increase in conversion for footwear campaigns on their platform.
As with any technology as it develops and improves, production costs for 3D content has reduced significantly with the introduction of new players. The ecommerce industry is seeing a growing appetite for technologies requiring 3D modelling and new innovations that make 3D production quicker and more cost effective for brands are continuing to drive demand. In the future, generative AI will be able to produce high quality 3D models even more affordably and make VTO accessible at scale.
Coupling affordability and speed with the fact VTO can be deployed at scale across multiple platforms - mobile apps, websites and even in store - it’s the ideal investment for fashion and beauty brands looking to future proof their business as recession fears loom.
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