Augmented Reality in Ecommerce: How AR, VR and 3D Are Changing Online Shopping

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Illustration by Jennifer Tapias Derch

According to Statista, the augmented reality market is valued at $30.7 billion, with around 810 million active mobile users. And so far in 2021, over 400,000 augmented reality glasses have already been sold.

We could rattle off more statistics, but there’s no question about it: where ecommerce retailers were once scrambling to adopt video as a new method of engaging customers and improving conversion rates, augmented reality (AR) and virtual reality (VR) are now poised to forever alter how products are sold online.  

 Here’s why 3D, AR, and VR matter—and how they’re already benefiting early adopters.

Table of contents

Augmented reality for retail: 2021 stats and trends

Source: The Cambridge Satchel Company

Despite being around since 1968—when the first AR headset was developed by a computer scientist at Harvard University—augmented reality can still feel like a gimmick or technology rooted in the distant future. In fact, it’s more akin to what video content was five years ago—it can be a critical component of your ecommerce storefront, capable of engaging new customers and boosting conversions.

Snap Inc. reports that there are already more than 100 million consumers shopping with AR online and in stores. In 2021, the company teamed up with Deloitte Digital to survey 15,000 consumers worldwide. While most respondents said they currently consider AR a “toy” (think: Snapchat filters, Pokémon Go, or Google’s AR-enabled search, which, at one point, had everyone placing dinosaurs in their home), a whopping 76% want to use it as a “tool” in their everyday lives.

And the most realistic and practical use for it that already exists today? Online shopping. According to Google’s 2019 AR Survey, 66% of people are interested in using AR for help when making purchasing decisions.

The pandemic has only accelerated this process. If those same surveys were conducted today, the numbers would likely be much higher. While brick-and-mortar stores are reopening, they’re doing so with new health and safety restrictions. For example, customers who can no longer try makeup samples in-store have to rely on virtual mirrors, such as Sephora’s Virtual Artist feature.  

Unfortunately, not much reliable research (read: uninflated data) yet exists on how AR will affect conversion rates. But Shopify’s internal numbers indicate that it has strong potential.

Consider, for example, that adding video lifts conversion rates 60% over buyers interacting with images alone. Merchants who add 3D content to their stores see a 94% conversion lift, on average.  

 “That tells us a lot about buyer trust and behavior,” says Ryan Smith, product lead at Shopify.

If I can interact with the product, see it from different angles, evaluate the texture, or place it in context in my room or on my face, it helps me make the buying decision better than images alone can deliver. It’s a merchant telling a story with a richer medium.”

Source: Rebecca Minkoff

Smith, who specializes in leading media (including image, video, 3D, and AR) efforts for Shopify merchant experiences, believes this type of content will be ubiquitous by 2023. 

“We’re just about to hit a tipping point,” he says.

Or, as AR expert Helen Papagiannis puts in the Harvard Business Review: “Once a nice-to-have feature, AR has quickly become an essential technology for retailers.”

Business and customer benefits of using 3D, AR, and VR in retail

Source: Gunner Kennels

But first: What’s the difference between 3D, AR, and VR? 

Put simply, augmented reality places virtual objects within real-world environments. The much-hyped virtual reality is an artificial environment that replaces a real environment. And lastly, 3D images are photorealistic representations of real-world objects. They’re also the cornerstone that AR and VR technology rests upon (more on that later). 

But the question we’re really here to answer is how 3D, AR, and VR can benefit both ecommerce merchants and their customers.

Increased customer confidence and lower return rates

According to a study conducted by UPS, 27% of consumers returned goods because they were “not as described.” By allowing customers to virtually “try before they buy,” you’ll give customers more information to decide with and, in turn, reduce return rates.

The power AR has for merchants is that it allows customers to preview what something would look like in their space or on their body as though they were actually in front of that product in a store."

—Daniel Beauchamp, principal engineer of VR/AR at Shopify. 

But Beauchamp notes that even if you’re not ready to go full hog, investing in 3D models of products (the first step in AR and VR creation) can still have huge payoffs. Unlike a photo, which only stores pixels, 3D models store information about the structure of products and the material they’re made of. They also let customers answer questions that an image alone can’t—like what a product looks like from different angles—to gain more confidence in their purchasing decisions.

“You don’t need AR or VR to reap the benefit from a 3D model of your product,” he says.

More engaging customer experiences

 AR gives customers who typically shop online the chance to view and interact with products in the same way they would if they were visiting a physical store. This may be part of the reason why AR experts such as Papagiannis are predicting that the next phase of AR will likely be a “gamified social experience,” such as digital storefront or virtual closets where you can shop or explore with a friend.   

As the capabilities of VR improve, merchants may be able to play on this to engage with customers in different ways. Beauchamp gives the example of shopping for snowboards.

“Would you want it to look like you’re inside a virtual mall with fluorescent lighting and tacky carpet? Or would you want it to feel like you’re actually on a mountain in the snow? Suddenly, a brand can put you in a story that their products tell—and that’s incredibly powerful,” he says.

Increased shopping time and higher conversion rates

At the moment, video is considered crucial in ecommerce. Instructional videos that help customers better understand products increase the time spent on a site and improve conversion rates. 

If you’re already sold on video, then consider this: according to 2020 research by Vertebrae—which specializes in AR and 3D ecommerce—conversion rates increase by 90% for customers engaging with AR versus those that don’t.

Two years from now, we’ll be able to cite strong studies indicating that AR has a similar effect. Already, we’ve seen preliminary indications that this is the case—on some Shopify product pages, 3D models in augmented reality have increased conversion rates by up to 250%.

Offer flexible customization for customers

Decision fatigue? Nah. Your customers want to explore products in different colors, designs, and patterns—which is easier to do with AR. All you need is one 3D model. 

It’s for this reason that 3D model creation can also have a better ROI than traditional photography, as HORNE furniture co-founder Ryan Walker pointed out in his discussion with Beauchamp at Shopify’s Commerce+ event. Photoshoots require renting a location, hiring a photographer, and spending a few days shooting, but you only end up with a handful of images. 

“Costs of [photoshoots] add up,” said Walker. That’s just part of the reason why HORNE now relies on AR for products, including its $7,000 Serge Mouille light.

Now, 3D designers create a rendered world in which we can place objects and move them around and really choose exactly how we want everything to look.”

Develop new products quickly

 3D technology can even be used by merchants to create new products. Rather than sending sketches to a manufacturer, who then creates a prototype followed by rounds of revisions, the process can be sped up by creating a 3D model of concept. This allows ecommerce merchants to be more responsive to customer demands and market trends.

Augmented reality in fashion/apparel

From trying on clothing to see what they look like to hosting pop-ups or recreating in-store experiences, the fashion and apparel category is one that’s most likely to be transformed by augmented reality. Already, we’re seeing strong examples of stores adopting this technology and using it to improve conversions (see below), particularly in the case of merchants selling jewelry, eyewear, shoes, or accessories.

 However, AR currently has limitations when it comes to clothing. It’s not yet able to accurately simulate the physics of materials and how they move, such as what a pair of jeans looks like when you sit down, or how a shirt looks when you lift your arms.

This is something that Beauchamp expects to see change. “Within the next five years, we’re probably going to get to the holy grail: really high-fidelity AR try-on clothing,” he predicts.

Smith notes this doesn’t mean merchants should hold off for five years before starting to invest in the technology. Customers investing in luxury products—who are willing to spend more time evaluating a product—use 3D models and AR to gain more confidence in their decisions. This is exactly why brands such as Gucci have adopted the technology in ways including the launch of virtual clothing that can only be worn in digital environments.

 Even fast fashion retailers stand to benefit, since one 3D model can be used for variations on the same product. Want to release a dress that comes in 10 different colors or with different details, such as buttons or zippers? A 3D model of one dress silhouette makes that possible, without time-consuming and expensive photoshoots.

Examples of augmented reality in fashion and apparel

When century-old NYC institution MOSCOT eyewear decided to relaunch its site in 2018, it chose to do so on the Shopify Plus platform. Its new site recreates the first-class experience that customers would receive in-store—including the ability to try on glasses.

MOSCOT worked with Vertebrae to integrate virtual try-on capabilities. Shoppers can examine the designs from every angle using the 3D model, then see the glasses mapped on their faces using AR technology that considers their unique facial features.

MOSCOT reported that, since rolling out the technology, it’s seen conversion rates more than double, with overall revenue amongst shoppers who engaged with the 3D and VR increasing by 174%. Another eyewear brand, Bailey Nelson, has seen a massive 600% lift on conversion rates since bridging its omnichannel experience.

And while clothing still has a way to go in AR, it currently works well for items with smooth surfaces, such as shoes. Allbirds, for example, is taking advantage of this technology within its year-old app, with a try-on feature.  

Augmented reality in furniture stores

While 3D models can help to sell furniture, there’s a reason why every furniture retailer, from Crate & Barrel to Staples Canada, have launched augmented reality on their apps. Customers no longer have to rely on measuring or taping out a space to determine size and fit. Now, they can see what it will actually look like in a room.

 “Year-over-year, we’re seeing advancements in terms of the realism of placing objects in your space, including accurately reflecting light and shadows in the scene,” explains Beauchamp.

Examples of augmented reality in furniture stores

IKEA was one of the pioneers of using AR for ecommerce retail. In 2017, it launched its IKEA Place app, which lets shoppers place thousands of items in their homes, with 98% accuracy. Since then, countless retailers have followed suit.

 Part & Whole, a Canadian contemporary furniture company, creates highly customizable furniture. So it only made sense to allow its customers to make those customizations themselves with 3D technology. Working with Sayduck, it launched 3D furniture models, where customers could play with armrest and fabric variations, and place the results in their homes or offices using VR.

Augmented reality for specialty goods

Clothing and furniture are usually the case studies cited for the use of AR and 3D models—but the technology isn’t just limited to these categories. Heckler’s app, for example, lets users place iPad and MacBook stands on their desks to make sure they’re the right fit. Brands such as L’Oréal—which acquired AR try-on technology ModiFace in 2018—reports that its conversion rates are multiplied by three when ModiFace is available. It can also be used to try out the effects of tile, wallpaper, and different paint colors within a home.

 AR can be used for entertainment, to engage customers, and for use on social media channels. Many retailers are already doing this to a degree, through the creation of branded filters for Snapchat or Instagram Stories. But as illustrated by Wayfair—which uses AR to allow chandeliers to grow from the ceiling or chairs to rise from the beneath floor—it can also be used for more creative outcomes.

Examples of augmented reality for specialty goods

According to Bumbleride’s chief customer officer, Ryan Wilson, one of the most frequently asked questions posed to the stroller company was about the dimensions of its products when folded or stowed away. Unlike measuring out the dimensions for a static couch, it was harder for customers to determine the multiple spaces the dynamic product would need to fit in. The problem was solved with 3D modelling of the strollers and AR, which eliminated the need for text-based measurements.

“It’s a really cool example, because you can see what the stroller looks like in your car, if it fits in your hallway, or how much space it takes up on the sidewalk,” says Beauchamp.

Not only did users stay on the site longer as a consequence, but there was also a 33% increase in conversion rates.

 Bumbleride isn’t alone. Gunner Kennels had a similar need for AR technology: customers wanted to determine whether their dog would fit in their crates, and if the crate would fit in their cars. Now, they’re able to place the virtual kennel next to their dog, ensuring the right fit. In addition to a 40% increase in order conversion rate, Gunner found there were other benefits. “As we see higher adoption rates with the [3D] models, we are also seeing lower return and exchange rates,” says Macey Benton, Gunner Kennel’s VP of marketing.

How hard is it to get started with AR?

 It’s much easier than you think.

“There are thousands of app developers who integrate with Shopify, including those in the 3D asset creation space,” says Smith. He notes that once upon a time it may have been necessary to send a product to a 3D model developer to create a 3D model, but now mobile scanning solutions exist, allowing you to take multiple 2D images of a product, which are then converted to 3D.

If you’re a Plus merchant and you want to use this feature, you may need to make a small modification to your theme to enable it in your online storefront. You can follow our guide to learn how or you can hire a Shopify Expert to help. If you have a custom theme or you use a theme developed by a third party, you should contact your theme developer to find out if your theme supports 3D models or videos.

Before customers can view your products in AR, you need 3D models of your products. The Shopify Expert Marketplace has a list of experts that can help with this.

To create the 3D model, the developer needs photos of your products from multiple angles:

When taking photos of your product for AR, follow these guidelines:

  1. Your product should be well lit. The whole product should be in focus. If possible, don't use a cellphone camera. For large products like furniture, use a camera with a 50 millimeter lens. For small to medium-size products, use a 70 millimeter or 100 millimeter lens.
  2. Take extra photos of any unique details or textures.
  3. Give the photo files clear titles like “blue vase - top,” or “blue vase - left,” and store them in a clearly labeled folder.

Learn more about creating 3D models and how to add these to your store to enable the AR experience for your customers.

The future of shopping is virtual

Already worth billions, augmented reality is expected to continue expanding dramatically in the coming years. By 2024, it will be worth close to $300 billion. And with it, the technology will only continue to improve in its accuracy and usability.

“A lot of stuff we have today is the tip of the iceberg—it’s the very beginning of this spatial future that we’re going into,” says Beauchamp. “The current smartphone technology is a stepping stone to a more immersive experience.”  

In September 2021, Facebook announced its partnership with Ray-Ban to launch “smart glasses” capable of capturing photos and video, listening to music, and taking calls. It’s the rudimentary beginning of what will become commonplace. Beauchamp says that future likely isn’t too far off, with AR/VR experiences likely incorporating glasses, headsets, or even smart contact lenses. He also says it will become commonplace for people to purchase NFTs (non-fungible tokens, or unique digital assets) for use in virtual worlds, like the branded digital skins available in games such as League of Legends, where it’s already a billion dollar industry. 

It may sound fantastical and hard to imagine, but the future is here. AR, VR, and 3D are already demonstrating many tangible benefits for ecommerce merchants ready to make the (small) leap. 

“What AR/VR is today is not the end goal. But at the same time, the experiences of tomorrow will all rely on one thing—and that’s 3D models,” says Beauchamp.

No matter what new experiences, social media channels, or headsets come out—you name it—they’re all going to rely on those 3D models.” 

As brands seek to improve their conversion rates and bolster more revenue, the benefits of augmented reality cannot be overstated. Augmented reality offers businesses the chance to create a more interactive shopping experience and the opportunity to virtually try the product they want to purchase.

About the author

Jessica Wynne Lockhart

Jess is an award-winning Canadian freelance journalist and editor currently based in Australia. Her writing has appeared in ChatelaineenRouteThe Globe & Mail, and The Toronto Star, amongst others. Learn more about her work at jesslockhart.com.