Friday, 10 September, 2021 UTC
Summary
Immersive shopping is proving to have experiential impact for consumers, and revenue impact for brands. Related to — but separate from — AR advertising, this is when AR is used as a tool to visualize and contextualize products to engender more informed consumer purchases.
This is a subset of AR that we call camera commerce. It comes in a few flavors, including visualizing products on “spaces and faces.” It also includes visual search — pointing one’s smartphone camera at a given product to get informational, identifying, or transactional overlays.
In each case, AR brings additional context and confidence to product purchases. And this value has been elevated during a pandemic, as AR brings back some of the product dimension and tactile detail that’s been taken away from consumers during retail lockdowns.
Synthesizing these factors, ARtillery Intelligence recently produced a report to dive into the drivers and dynamics of camera commerce. How is the field shaping up? Who’s doing what? And how big is the market opportunity? We’ve excerpted the report below for AR Insider readers.
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Varied Applicability
Following AR’s circa-2017 hype cycle, it’s become evident that the technology isn’t a “silver bullet” as once heralded. It won’t transform all aspects of our lives and work, having varied applicability to some areas more than others. But this doesn’t mean it won’t create considerable value.
Indeed, as AR continues to grow into its own skin, it’s showing strong potential to revolutionize a handful of areas. Those include sectors that we’ve examined in past reports, such as enterprise productivity, mobile gaming, social engagement and brand marketing.
Next on this list of AR-conducive activities is consumer shopping. This area that we call camera commerce involves using graphical overlays to enhance or inform shopping experiences. It engenders more informed purchases and can even boost conversion rates.
One aspect that makes camera commerce so opportune is the fact that it’s naturally monetizable. After AR has gotten flack for not having a meaningful business case, incorporating it into the shopping flow unlocks a clearer set of business models, which are explored later in this report.
Advertising vs. Commerce
While we’re level setting on definitions and classifications, an important distinction is advertising versus commerce. These areas flow into each other in an important value chain that drives consumer purchases, but they’re separate areas of brand spending and strategic development.
At a high level, AR advertising is defined as spending on campaigns that are created and distributed through specific paid channels. For example, as we’ve examined, sponsored lens campaigns on Snapchat and Facebook continue to evolve and exemplify AR advertising.
AR commerce meanwhile can happen within AR ad campaigns, but it’s generally broader. It’s defined as AR that’s incorporated into any shopping flow. That can mean venues that are outside of a brand’s paid advertising channels, such as its own app or mobile website.
Another example in retail contexts is AR commerce that’s activated through product packaging. This includes animations that come to life when prompted by a physical marker. This flavor of camera commerce has, often builds on, and utilizes existing brand assets.
By the Numbers
Quantifying camera commerce and indicating its monetization potential, ARtillery Intelligence has projected AR-influenced consumer spending to exceed $57.8 billion by 2025. To define this figure, it’s the aggregate value of consumer purchases that are influenced by AR.
Notably, this $36 billion in 2024 isn’t AR revenue per se, but rather the retail revenue that AR influences. As for where actual AR revenue comes in, it will be a fraction of consumer spending, to the tune of $2.9 billion by 2025. This is revenue from AR-commerce enabling software.
For example, the companies that occupy this value chain will help brands and retailers AR-enable their eCommerce. It will also include technology to generate 3D models, optimize the transmission of large files, and generally integrate AR into the existing eCommerce tech stack.
Business models for these ecosystem players will include SaaS software licenses, as well as revenue share arrangements. These models exist today in the existing eCommerce ecosystem, and will be mirrored in the AR shopping microcosm that continues to develop.
We’ll pause there and circle back in the next installment to go deeper on camera commerce and its best practices…
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https://medium.com/media/1e1f2ee7654748bb938735cbca6f0fd3/hrefWhat’s the Revenue Opportunity in “Camera Commerce?’ was originally published in AR/VR Journey: Augmented & Virtual Reality Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.