Editor’s Note
This article explores the enduring appeal of virtual try-on technology, moving beyond its pandemic-era origins to become a strategic investment for major brands. It examines the psychological and practical reasons behind its effectiveness in enhancing the online shopping experience.
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At first, virtual try-ons may have looked like a pandemic trend — a way for people to enjoy a high-quality shopping experience without leaving their homes. That’s not the case though. Brands like Dior, Prada, and even beauty market leaders like NYX Cosmetics are investing in the technology.
Many retail companies offering highly exclusive products are looking into this new opportunity. It’s no wonder — the potential of VR and AR on the ecommerce market is huge.
Before we look at the seven reasons why virtual try-ons for fine jewelry and watches are so popular right now, let us consider the market situation to get a better idea about the relevance of virtual try-ons. Most of our data has been taken from the latest McKinsey research on fine jewelry and watches.
Revenues have declined: the fine jewelry and watches industry has suffered revenue declines of up to 30%, proving that they are not resilient.
Slow transition to digital: the COVID-19 pandemic has revealed cracks in the industry’s digitalization – with online sales representing only 13%. One reason for this could be that there are no proper ways to discover luxury products online.
It’s time to bring more business online. Online fine jewelry sales are expected to increase from 13% to up to 21% of the total global market by 2025. Retailers and ecommerce companies that want to benefit from this trend should consider how they can capture those online customers.
Digitally augmented but human-centric experiences are what customers want. It’s worth remembering that 80% of purchases will still be made in-store. Customers will expect a high quality of service in both the offline and online channels, so seamless connectivity between them will be key for retailers.
1. Conversion rates improve
According to Shopify, interactions with products that have augmented reality and/or 3D content results in a 94% higher conversion rate than for products without AR/3D. Even top quality photos don’t give consumers the same feeling of knowing what the product will look like when worn.
2. Online sales and traffic increase
Virtual try-ons give customers more confidence to buy a product online and send traffic to online stores.
3. The majority of consumers are willing to use AR solutions
51% of consumers are willing to use AR or VR solutions to assess products, which is a large enough segment to make investments in these technologies more than viable. As younger generations grow up in a world full of AR and VR solutions, this number is likely to grow.
4. New customer segments and markets can be accessed
Since a virtual try-on lowers the barrier of trying on a piece of fine jewelry or a watch, access is granted to a new customer segment. People living in areas without easy access to a physical store can have their needs met, and a new avenue for brand discovery is open, especially to younger customers.
5. The number of returns goes down
Virtually trying on a piece of jewelry or a watch increases confidence in buying the product online. It’s also a way to reduce the number of returns for online purchases, as fewer shoppers will be dissatisfied, leading to cost reductions.
6. The technology is available
As mentioned earlier, the once complex and costly technology of augmented reality and machine learning is now available at your fingertips. It is the key to presenting exclusive products in the way of a luxurious product discovery or luxury sales ceremony.
7. The market space is heating up
Strategic decisions are being taken now to either invest in proprietary technology or work with out-of-the-box solutions and platforms. See Piaget with Snapchat, Rolex with Chrono24, IWC with their own app, or Chopard with Farfetch. The market leaders are not twiddling their thumbs.
What other solutions should fine jewelry and watches providers implement to face the challenges of revenue declines, slow transition to digitally-augmented experiences, and the surge of online traffic?
Improving the online experience they provide will likely be the most important. This can be achieved in a number of ways, such as deploying sales assistants (human or digital, as needed) to achieve superior customer service.