Augmented Reality Drives Consumer Confidence During a Recession

Editor’s note: This column is part of a series with Snap on augmented reality. Below, global director of insights and analytics Lauryl Schraedly describes how different types of AR activations have different capacities to reenvision your retail and ecommerce strategies. It’s time to talk about the “I” word. Yes, that one: Inflation. Today’s consumers are feeling the pinch. According to the U.S. Bureau of Labor Statistics, consumer prices are up 9.1% over the year ending June 2022, the largest increase in 40 years. With high inflation, increased interest rates and decreased consumer spend, it’s unsurprising that, with the uncertainty of the future, 65% of consumers are feeling cautious about spending, according to our research. The current economy is impacting brands, too. Media inflation is increasing, digital ad prices in North America are expected to become 5.4% more expensive this year and supply chain issues persist, making inventory management critical for bottom-line returns. So, what’s the key to convincing cautious consumers to spend more when you have less budget and getting them to buy the goods you need to move? Win their confidence with augmented reality. As Students Get Ready for Fall, Add AR to Your Back-to-School Toolbox AR enables your business to virtually put your product in the center of the consumer's world. Or on their bodies. It’s an immersive, interactive experience that can bridge the gap between consideration and trial, all from the comfort of your audience’s own home. Shoppers agree that AR gives them the confidence to buy, and four in five customers agree that AR promotes discovery and would make them want to try something new. Brands can use this technology to share an array of products or services with consumers, helping them feel good about their purchasing decisions while managing supply. Drive consideration with a virtual store experience Many people, including younger consumers, would substitute an in-store shopping experience for a virtual one if they could. 80% of shoppers say they’re more likely to shop brands that offer an easy online and virtual retail space, while 26% of consumers say they would fully substitute in-person shopping for online. With augmented reality, the future of retail extends far beyond a physical brick-and-mortar store. World lenses use the outward-facing camera to detect and map the environment and surface around a user, allowing them to interact with 3D objects overlaid onto their world. With this solution, brands can offer shoppers a “touch and feel” experience directly from their phones, helping them imagine an item in their space or on themselves. A great example is the athletic shoe and apparel brand, Hoka One One, which gave consumers a fully immersive commerce experience without ever leaving their homes. They built a virtual pop-up store where shoppers could explore the space while trying on shoes and clothing. A "Shop Now" button swiped up to Hoka's website where users could check out. Drive trial with virtual try-on technology Thanks to technologies like augmented reality, exciting new shopping experiences have emerged. And they’re thriving. In their New York concept store, beauty retailer MAC Cosmetics uses AR to offer virtual try-on via smart mirrors. This in-store experience enables shoppers to choose a lipstick shade, prompting the mirrors to apply the corresponding shade to the person’s reflection. Customers can also save their looks to a digital MAC Pass profile and access it later for their next shopping trip. Canadian eyewear brand Clearly used this technology to engage Snapchatters with the brand’s products in a fun and realistic way. They combined a lens activation with video ads, driving incremental conversions and improving action intent and ad awareness, resulting in 4.9 times ad awareness lift and 1.3 times always-on AR purchase intent lift, according to internal data. Manage SKUs with real-time product information Whether you’re still working through supply chain delays or addressing inventory pile-ups due to reduced consumer spending, SKU management is an essential strategy for any business. And during times of economic crisis, shoppers are specific about what they need. Consumers want brands to communicate their latest products, offerings and discounts. 60% of shoppers are looking for more coupons, discounts and deals to offset higher prices across categories, while 53% are shopping at multiple stores to find the best price. Dynamic product ads create simple, personalized shopping experiences while featuring the products consumers actually want and inventory businesses actually have in stock. Built directly from a brand’s product catalog, these ads are tailored based on user behavior. Plus, with catalog-powered AR shopping lenses connected through your product feed, consumers can check out up-to-date prices while viewing your product in 3D to test, rotate and even shop the interactive experience. Uncertain times call for certain strategies. By pairing highly engaged shoppers with confidence-building formats, your brand can inspire meaningful connections that drive attention and sales. Snap Powers AR Experiences for Vogue World Event at New York Fashion Week