Shoppers who use AR less likely to return purchases: Snap - The Entrepreneurial Way with A.I.


Tuesday, June 21, 2022

Shoppers who use AR less likely to return purchases: Snap


Dive Brief:

  • As brands and consumers become increasingly interested in Snapchat’s AR features, the platform’s latest research shows that its virtual testing tools are catching on with shoppers. Two-thirds of consumers are less likely to return a product after using an augmented reality feature, according to a Alter Agents survey commissioned by Snap and Publicis Media of 4,028 shoppers aged 13 to 49 in the U.S., the U.K., France and Saudi Arabia.
  • Nearly three-quarters of respondents said they were likely to buy clothing after using an AR experience in the future, followed by retail (70%), beauty (69%), travel (64%) and food and beverages (60%). 
  • Eighty-percent of survey respondents said they feel more confident in their purchases when using augmented reality tools.

Dive Insight:

Snapchat has been promoting its research surrounding AR commerce as it releases new augmented reality features in its app.

In April, the social network released a report indicating that 92% of Gen Z shoppers prefer AR reality tools for e-commerce. That survey of 16,000 consumers across 16 markets found that Gen Z consumers favored AR shopping tools over millennials and Gen Xers. The following month, the company unveiled multiple new AR tools designed to connect brands with shoppers on its platform.

Besides researching the impact of AR tools on consumer habits, Snapchat and its growing list of partners have experimented with AR tools as social commerce is predicted to grow. In the years leading up to its recent AR feature rollouts, the platform partnered with brands and companies like Toys R Us Canada, American Eagle, Gucci and Adidas to engage with products beyond the typical 2D images. Meanwhile, an Accenture report found that the global social commerce market could reach $1.2 trillion by 2025. 

Amid its push for greater AR engagement, Snapchat has also grown its overall user base and revenue. According to its Q1 2022 earnings report, the social network’s revenue rose 38% compared to last year to $1.06 billion. More than 250 million Snapchat users engaged with its AR features daily on average, and its daily active users increased 18% compared to last year to 332 million, per its quarterly earnings report.

But as Snapchat tries to attract brands to its platform with its AR tools, retailers have begun releasing their own virtual product testing features. In 2020, Amazon released its Room Decorator tool, an augmented reality feature that lets consumers virtually style their homes with furniture. Earlier this month, the e-commerce giant released another AR tool to allow shoppers to try on their shoes virtually. Similarly, Pinterest launched its Try-On for Home Decor tool in February, enabling furniture shoppers to visualize furniture and their homes using AR technology.

“The future of shopping is here today, through the use of AR. It’s continually proven its value for shoppers as a way to show how a brand or product can fit within their lives,” Helen Lin, chief digital officer at Publicis Groupe, said in a statement. “Virtual try-ons and 360 product demos can help lessen the need for returns and in-store visits. Think about the impact this could have on customer service, supply chain, and overall sustainability.”

Digital platforms are relying on AR features to instill consumer purchase confidence as retailers navigate the complicated headache of product returns. Retailers anticipated that consumers would return more than $761 billion worth of merchandise sold in 2021, a January report from the National Retail Federation and Appriss Retail found. Amid the rising costs and environmental impact of returns, some retailers, notably Zara, are following the lead of electronics retailers by charging customers for returns.


Tatiana Walk-Morris, Khareem Sudlow