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AR, VR, the metaverse, AI, and GenAI. All of them have the potential to drive higher conversion rates when they improve user experience in a demonstrable way. In some cases, these technologies are changing the ways customers interact with brands.
For example, retailers are adopting 3D interactive content so customers can do things like explore a product in 3D space, such as turning a shoe upside down and sideways to understand the design more fully. Similarly, Amazon’s AR capabilities enable shoppers to see how a shoe would look on their foot. In both cases, 3D imaging, with and without AR, is bringing analog-like experiences to the digital economy. The more real digital experiences feel, the more likely humans are to explore them.
“I believe the biggest shift will be in how we experience the media,” says Michal Koor, CEO and founder of Vectary, a 3D/AR asset management platform that simplifies the creation and sharing of spatial computing models. “For example, if you look at a four-minute video, somebody created a timeline of all the things that were going to happen, but if I give you access to the space that you can explore, you’ll spend 50 minutes and it will be your story, different from all the other users. That’s what’s new.”
Engaging More Senses for a More Compelling Experience
Product designers have been tapping into consumers’ desire for more lifelike experiences for a very long time, whether it’s providing gaming chairs that help players “feel” the game they’re playing or home theatre sound systems that provide a cinematic-like experience. According to Verified Market Reports, digital scent, when combined with AR and VR, helps provide more immersive experiences in such industries as healthcare and aromatherapy, gaming and entertainment, retail and marketing, and personalized wellness and lifestyle. Digital scent is also useful for environmental sensing and safety.
“Currently, [most] e-commerce and physical retail experiences are mundane, two-dimensional affairs. The repetitive cycle of click, scroll, and click has become the norm, leaving much to be desired in terms of excitement and engagement. This status quo is ripe for disruption,” says Michael Zakkour, founder and chief strategist at retail consulting firm 5 New Digital, in an email interview.
Brands, retailers, and consumer packaged goods (CPG) companies are transforming boring, flat, non-immersive “buying” into a three-dimensional, dynamic, engaging shopping experience. The key for companies is to do this online and in-store and then connect it through unified commerce so they can:
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Lower costs of consumer acquisition and logistics,
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Increase organic traffic,
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Boost conversions from an average of 2% to 6%, to 10%, 20% or 30%,
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Lift average order volumes, and
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Ensure the delivery of long-term customer value.
More specifically, Zakkour says 3D product description pages produce 15% to 20% higher conversion rates and livestreaming commerce produces 3X to 7X high conversions while cutting returns from an average of 25% to 45% to 10% to 15%.
“Walmart is setting the industry standard for improving UX and UI by engaging in the ‘New Retail Model,’ [which is] the full integration of online, offline, technology, entertainment/media, and supply chain,” says Zakkour. “Their marketplace, Roblox habitat, the new Walmart Realm, and Walmart Connect. It all adds up to a new UX/UI paradigm, which was invented and perfected by Alibaba and is now spreading globally.”
5 New Digital recently held a two-hour livestream event for a major New York City luxury apparel company during which the retailer sold more in dollar value than the flagship store. The four-week post event tracking showed that the flagship store foot traffic rose 52% and online traffic increased 42%. Social media followers and shares spiked by 25%, while average order value (AOV) increased across channels by 20%.
In the payments space, developers are focused on creating integrations and experiences that make payments as simple and seamless as turning on a lightbulb.
“The more invisible a payment is, the smarter it is. If you think about it, that is the magic of ride sharing apps — the checkout experience is to just get out of the car. When the rider leaves the vehicle, the payment is automatically triggered,” says Mike Blandina, managing director, global head of payments technology at financial services firm JP Morgan Chase. “Payment experiences like biometrics and tap-to-pay offer similar fast and convenient checkout experiences that encourage better customer experiences and brand loyalty.”
For the sake of better user experiences and cybersecurity, payments are increasingly focused on proving the user’s identity in a fast and easy way.
“Developers are currently focused on shifting from payments based on credentials such as valid card information to identity-based payments where the transaction is verified by establishing who’s actually behind it,” says Blandina. “There’s a variety of ways to do this, from paying by face, palm or device, as preferences differ across generations.”
Look no further than your friendly neighborhood Whole Foods Market, for palm-scanning checkout, for example.
Data Is Also Important
Marketers have been using data since the dawn of the Web to understand customers and their behavior better, and capabilities have been advancing with technology, such as moving beyond historical reports to predictive capabilities and personalized recommendations.
Thus far, data has been a blessing and a curse for designers. On one hand, they have data-driven insights whereas before they could only make educated guesses. However, designing UXes based on data alone may miss the mark.
“Metrics can’t replace intuition. The reality is, the broader your ideas, the metrics get harder to articulate,” says Jenny Chang, head of design at data analytics platform provider Amplitude. “Do not lose out on the intuition of what you need to do to differentiate yourself in the market and then after that is when metrics become paramount to success.”
Data also feeds the AI designers use. According to the soon-to-be-released 2024 Economics of Design Outlook by design and product development firm OCTO, 49% of respondents believe AI will expedite early-stage design and innovation processes, and 47% noted that AI will improve their brand’s creativity. Only 11% say they think it could diminish their organization’s creativity.
“One significant transformation lies in the realm of generative design, where AI algorithms are leveraged to explore vast design spaces and generate optimal solutions based on predefined parameters,” says Justin Sirotin, founder at OCTO. “This approach accelerates the iterative design process and simultaneously uncovers innovative solutions that may have eluded human designers.”
By harnessing the power of AI, designers can explore countless design variations and quickly converge on the most efficient and effective solutions.
Bottom Line
Retailers learned some time ago that separating analog and digital experiences is a bad idea. Hence the rise of multichannel and omnichannel marketing and customer journeys.
3D, AR, VR, AI, and GenAI are all means of creating immersive, interactive digital user experiences that are more lifelike. While digital experiences are more modern than analog ones, in the end, users want digital experiences that are as close to lifelike as possible because they simply feel more natural.