Industry Trends

Top Trends in AR Commerce in the United States

September 5, 2023

Augmented reality (AR) has been a hot topic in tech, marketing, and e-commerce for years. Yet, AR commerce technology and investments have only recently gained traction with retailers. Now, businesses of all sizes are actively integrating AR experiences into their online or retail stores to give consumers a new way to interact with their products.

It is estimated that the AR market will exceed US$50 billion by 2024, with retail representing the third-largest AR market segment. Online stores and retailers alike are discovering the power of virtually showcasing their products right alongside the real world.

Today, we’ll explore the top trends in AR commerce in the United States. We will discuss their impact on how consumers interact with products and brands, so you can better understand how U.S. consumers respond to — and embrace — augmented reality.

What Exactly is AR Commerce?

It’s important to define what augmented reality is, and how it differs from virtual reality.

Augmented reality allows users to interact with the real world in exciting and engaging ways. AR commerce often overlays products with the customer’s environment, allowing them to see the product in a real-world context.

Virtual reality completely replaces the real world with a virtual world and often requires special equipment such as a headset. This often means they cannot see or hear the real world while interacting with a completely virtual environment.

With that out of the way, let’s dive into the top AR commerce trends defining how consumers shop.

Younger Americans Driving Adoption Forward

It shouldn’t come as a surprise that AR adoption in the U.S. is being driven by the younger generations. A Deloitte and Snap study revealed that both Gen Z and millennials are 71% more likely to consistently use AR versus older generations. Adding to that, only 20% of Gen X and Baby Boomers see AR as practical.

While some of the more notable examples of AR in practice include Snapchat and TikTok filters, other popular use cases include communications, gaming, media and entertainment, and shopping.

Companies willing to embrace AR technology will not only appeal to the younger American audience, but will also be able to create a more personalized shopping experience for older Americans. This could include providing more robust product information, comparisons, and other contextual information during the buying process.

U.S. Consumers Want AR Shopping Experiences

A recent consumer survey of 1,100 U.S. adult shoppers revealed that 34% of U.S. shoppers already use AR in some form. Additionally, 71% of them said they would shop more often if AR experiences were available, while 61% said they choose stores that offer AR over stores that don’t. Those surveyed also said AR makes shopping more fun and exciting.

Retailers and online stores that embrace and integrate AR may become customers’ first choice when looking for new products. When you consider that 77% of AR users say they use this technology to compare product differences, it becomes clear why this emerging technology is a must-have for any business looking to create a differentiated shopping experience.

Only 1% of Retailers Use AR

AR adoption rates in the U.S. still remain fairly low compared to China. It’s estimated that over 58 million Americans use AR technology, and yet, only 1% of retailers have integrated it into the customer experience.

How does this compare to China? China’s AR market ranks first in the world and is expected to achieve a 5-year compound annual growth rate (CAGR) of 43.8%, much of which is driven by significant investment by top tech firms like Alibaba, Tencent, Baidu, and others into AR/VR and the Metaverse.

A commonly-cited barrier by retailers is the challenge of developing and integrating AR with the online experience. In the past, this was a reasonable concern. Now, however, there are fully-developed third-party solutions, like Tangiblee, that significantly decrease the technical barriers standing between retailers and AR technology.

Early AR Adopters Seeing Higher Engagement & Conversion Rates

It’s no secret the pandemic has changed U.S. consumer behavior towards transformative technologies like AR/VR. AR engagement in the U.S. saw a 20% boost through the pandemic so far, with retail stores reporting conversion rates as high as 90% for AR-based transactions.

Much of this has to do with how AR enhances the customer journey, offering a more personalized and engaging experience. In fact, 56% of U.S. shoppers say AR boosts confidence when it comes to product quality by providing a “try before you buy” experience.

As the modern shopping experience continues to evolve, companies capable of recreating the familiar in-store experience through AR technology should continue to see higher conversion rates, especially for products that are challenging to purchase online.

Make Tangiblee Your AR Partner

There is one consistent theme throughout all the trends we’ve discussed: U.S. consumers are responding positively to eary augmented reality initiatives. As a result, AR leveraged by retail and e-commerce businesses can increase conversions, reduce returns, and create memorable experiences - throughout the entire customer journey.

Fortunately, you don’t need to build an AR platform from scratch. Tangiblee offers a comprehensive AR platform that is easily integrated on e-commerce sites so you can start making a more significant impact with potential customers.

Ready to embrace AR and all of its powerful benefits? Book a demo with an AR expert today to discover how Tangiblee can transform your customer experience.

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