“Are we heading for a recession?”
“Are we already in a recession?”
“We’re heading into a recession.”
Questions and statements that have occupied the headlines for the last several months, leading to discussions and heated debates about the impact of the market on every industry. For tech in particular, the last few weeks have been turbulent, as questions surrounding expenses, growth, and layoffs swirl. But while there is surely cause for concern, these market conditions also offer an opportunity for those who are innovative enough to find it.
History shows recessions breed innovation as demands for efficiency and effective solutions skyrocket. Commonly cited success stories of brands prevailing during tough times include General Motors and Airbnb. While these successes came a century apart, their growth was predicated on the ability to recognize and address needs created by a downturn.
In today's market, retail and ecommerce brands are some of the most vulnerable as they are faced with two seemingly conflicting problems:
a fundamental need to create efficiencies and reduce costs, and
the demands of consumers calling for better, more compelling, and sustainable products and product experiences.
Further, there seems to be dissonance among industry experts on what tactics brands should and will take in the coming months.
“What research has shown is companies that have continued to establish and retain relationships with customers have flourished post-recession.” - K. Sudhir, Yale University
“Businesses will slash promises to consumers to protect their bottom line.” -Emily Pfeiffer, Principal Analyst at Forrester
In the short term, cost reductions are surely at the front of leaders’ minds as margins are cut and expectations for lower consumer confidence are articulated. However, part of what creates a success story is the ability to thrive, or at least survive, the short term while seeing the long term potential. So what solutions are available today for brands to address the growing needs for efficiencies in the short term and the demands of consumers in both the short and long term? Our vote goes to product visualization powered by 3D and augmented reality (AR).
Benefits of Product Visualization in 2023
Investments in technology are often accompanied by concerns of return on investment (ROI) and measurable results. Effectively balancing being on the cutting edge and generating value can be a challenging task. In many industries, 3D and augmented reality have gained a reputation for tools that look cool, but drive little value. However, unlike the flash-in-the-pan iterations of the past, or even the promising but still very niche applications touted by some of the world’s largest firms, 3D product visualization is driving real, measurable results for brands today. Perhaps most importantly, these results can be seen in both the front end performance measures, and in decreasing operational costs.
Product Visualization for Cost Cutting
It is no secret imagery is a key component in any online shopping experience. In fact, 63% of consumers believe product imagery is more important than the product description when shopping online. But while consumers love being able to see pictures of every angle of a product to aid in their decision, brands are not fond of the high cost associated with delivering this experience. Since 2016, consumers' expectations of the number of images displayed on a product page have risen from three to eight. With the average photo shoot costing brands over $11,000, what may seem like a small increase actually represents thousands of dollars for every product.
Product visualization, on the other hand, enables a more compelling shopping experience for as little as one sixth of the cost of traditional photography. Where photos and videos limit a buyer’s exploration of a product to exactly what was captured on the day of the shoot, product visualization allows for a truly immersive experience, empowering the buyer to evaluate a product in ways far beyond looking at a photo. Models used in the creation of a product visualizer or configurator are often compatible with augmented reality experience, providing the brand with an additional tool to present their product and the buyer with a new way to experience it.
Not only does product visualization generate life-like imagery for a fraction of the initial cost of a photoshoot, the cost to maintain and update an accurate product catalog is greatly reduced over time. Models can be updated and relaunched as needed to reflect product updates, new features or materials, or special edition products. Instead of repeatedly shooting and editing photos and video, updated 3D product models can be deployed seamlessly, saving time, money, and effort across multiple teams.
Visual assets are not the only opportunity for brands to reduce cost via product visualization. Among the top concerns for brands across verticals is the high cost of returns. Ecommerce sees an average return rate of 25-30%, and retailers overall lose roughly 16% of sales values to costs incurred due to returns. This is an ongoing challenge for brands with an immediate need for improvement. Better visuals have proven to drive more confident purchase decisions, resulting in lower returns.
22% of buyers have return an item because it did not look like the picture
81% of shoppers say they feel more confident in their purchase when shopping with AR
Merchants on Shopify saw 40% reductions in returns after deploying 3D visualization
Product Visualization for Consumer Experience
There is strong evidence for product visualization as an effective cost cutting tool; however, when viewed through the lens of customer experience, the evidence may be even more compelling.
There is no question the competition is stiff for nearly every industry, with new competitors entering the market every day and established leaders fighting fiercely to hold their position. Product performance is still a top priority for buyers, but the buying experience has quickly become a key measure for brand differentiation. Research from Adobe shows that brands that focus on customer experience drive 2x the average order value. As consumers become more selective in where and how they spend, values like these are not surprising. As brands consider where to make improvements or enhancements, data suggests their focus should be squarely on making the customer experience best in class:
83% of Gen Zers say they view online shopping as an experience rather than a transaction
80% of business customers and consumers say the experience of buying is as or more important as the product purchased
57% of consumers are willing to share personal information for a better experience, with personalized experiences driving 48% higher sales values.
Customer experience may seem like a vast subject with a multitude of areas to potentially address, but in this case it does not have to be. Consumers are not only demanding better experience, they are specifically asking for immersive tools to help them make quicker more confident purchase decisions.
66% say 3D/AR visuals would increase their confidence that they’re buying the right product.
71% of consumers say they would shop more if they could use AR to experience products
Shoppers are willing to pay 20% more for products they can experience in AR
After shopping with product visualization tools, it is hard for consumers to go back; 77% of consumers say they prefer to use augmented reality to view product variations such as color and style differences. Buyers are also spending more time with brands online as they deploy product visualizers and configurators. A luxury accessory brand recently reported 4.5x spent with 3D enabled products compared to their standard product pages.
The Best Investments for 2023
As has been the case in many economically challenging times, we are at a tipping point between efficiency and innovation. There are many who will gravitate to intense cost cutting or a reduction in services to ride out the turbulence. While many should survive, they will open the door to competition and innovation. The most successful brands, established or emerging, will be those who find the balance between efficiency and innovation, and particularly those who can accomplish this using tools that contribute to both goals.
Dopple is here to help optimize the investment in your business in 2023. Let's talk.