In 2019, luxury fashion house Gucci partnered with Snapchat to introduce a new feature named “Try On”. This allowed people to try Gucci shoes online using just their mobile phones. The campaign was an instant hit. Customers could not try Gucci shoes worth around $700 without visiting the store. This innovative use of Snapchat’s VR allowed Gucci to explore new ways to interact with their customers and give people a taste of how they would look wearing a $700 pair of Gucci shoes.
Today, AR and VR have revolutionised the marketing landscape. What was once seen as science fiction or imagination is now a reality, which has impacted marketing and marketers seeking to create immersive, personalised, and engaging experiences. However, the possibilities and the potential use cases of AR and VR in marketing are immense.
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Immersive Engagement: Beyond Traditional Marketing
The key strengths of AR and VR lie in their ability to create an immersive and engaging environment for consumers and customers to interact with, which traditional marketing channels just can’t offer. Unlike traditional billboards or ads, AR and VR allow consumers to ‘experience’ the product or service. For instance, if you are looking for a hotel and want to see what it looks like from the inside, you can use virtual reality. In the case of AR, it can be used to try out merchandise like shoes, shirts, jackets, etc.
As a result, the global VR and AR industry is booming. A recent report by Statista shows that the global AR and VR market is projected to generate revenue of around $40.04 billion in 2024 and more than $62 billion by 2029 at a CAGR (compound annual growth rate) of around 8%. This tremendous growth is a testament to how businesses are increasingly investing in these technologies to drive customer engagement and brand loyalty.
The Power of Virtual Try-Ons
AR and VR are poised to be extremely effective, especially in retail, where customers constantly seek a more personalised experience. According to a study by Deloitte, 57% of consumers said they would be more likely to shop from a place that employs AR-based try-ons. This is mainly because, today, pretty much everyone shops online, and the biggest caveat is that you can’t try it on and don’t know how it looks on you. However, AR bridges the gap and allows you to try the dress or shoe on in a partially virtual space.
A leading example of this comes from Sephora, the cosmetics giant, which introduced the AR-based “Virtual Artist” feature in its app. This tool allows users to virtually try various shades of makeup and determine how they look wearing it. According to Sephora, the feature has seen high engagement rates, with over 8.5 million people having used it since its launch, resulting in a 27% increase in conversion rates for those who used the tool.
Reducing Returns and Increasing Customer Satisfaction
One of the major problems in e-commerce is the high return rate of products. This is especially true in the fashion and furniture sectors, as customers never properly know whether their choice is good until they see the product in person. This is where AR and VR make the lives of consumers and e-commerce companies easy. AR and VR have revolutionised the field by giving consumers a better understanding of what they are purchasing.
For example, IKEA’s AR-based app, IKEA Place, allows customers to place true-to-scale 3D furniture models in their homes to see how they fit and look before purchasing. According to a Forbes report, IKEA has noted a 35% reduction in product returns since implementing the app, highlighting the value of AR in minimising customer dissatisfaction and reducing logistical costs.
Virtual Reality in Event Marketing
Since the world witnessed the pandemic in 2019, VR has transformed how events and brand activations are conducted. In the post-pandemic world, where physical attendance is often limited or frowned upon, VR allows brands to create engaging virtual events. According to 2021 research by PwC, VR events are poised to grow at 25% annually. It is mostly driven by increased demand for immersive experiences in education, entertainment, and corporate training. Just imagine a time when you can watch the latest movies from your home while feeling like you are sitting in theatres with hundreds of other people.
Volvo is currently offering VR test drives, which allows users to virtually experience driving the XC90 SUV through scenic landscapes. This campaign extends the reach of test drives beyond physical dealerships, enhancing accessibility and drawing in tech-savvy, adventure-oriented customers. Moreover, it gives Volvo a chance to showcase the drivability of its cars, which helps increase sales.
Reshaping the Marketing Landscape With AR/VR
With projections indicating a VR and AR market revenue of over $62 billion by 2029, these technologies aren’t just trends; they’re transformative tools helping businesses worldwide to engage more customers than ever before. Companies that embrace AR and VR aren’t merely adopting new marketing tactics; they’re setting new standards for consumer experience, which will be pretty hard to beat without the same technology. As these technologies evolve, they will redefine engagement, satisfaction, and loyalty in a digital-first world, allowing forward-thinking brands to stay ahead in an increasingly immersive market.
