Due to the Covid-19 pandemic, the world has witnessed a drastic shift in people’s shopping behaviour in the last few years. In light of this reality, luxury brands have started adapting to this new trend, using the latest technologies to offer their customers new and innovative shopping experiences. One of these technologies is augmented reality (AR) which helps in replicating the personalized in-store shopping experience combined with the convenience of digital media. AR’s ability to let customers see, interact with, and try on products in a lifelike setting could unlock unprecedented opportunities for high-end retailers.
Dior offers a glimpse of where the luxury industry is headed, partnering with Snapchat in 2020 to launch their new B27 sneaker. Snapchatters in the UAE were able to try on six new pairs of the B27 through AR, see how they look wearing the latest kicks, and purchase them from the Dior brand profile and on Dior.com. This trend is also true for jewellery and watches. Cartier leveraged the wrist tracking technology to launch their first Pasha de Cartier watch try on lens across Saudi Arabia and the UAE, the experience allowed the user to try 4 different watches and purchase them from Cartier’s website.
The Dior campaign’s success echoes a trend we have observed over the recent past. Recent Snap’s internal data shows over 15 million luxury shoppers in Saudi Arabia buy high-end jewellery, watches, male and female fashion, lifestyle goods, beauty products, and gift items.
Driving this shift is the unprecedented power of AR to grab people’s attention. AR delivers twice the level of visual attention compared to non-AR equivalents, according to research from AR platform Zappar. This leads to improved memories, enhanced experiences, and a more powerful response from consumers when looking and purchasing a brand. Further, when people interact with products that have an AR experience, their conversion rate is 94% higher, indicating a deeper individual connection with the brands. Additionally, AR can capture the public’s attention and maintain interest over time. Data shows that 90% of Snapchatters engage with AR lenses every month.
Sharing with friends is part of the social media experience, but none of the other platforms comes close to Snapchat forging a community, both virtual and in real life. Previous research shows that two in three Snapchatters share or save AR Lenses every month.
Any luxury brand without an AR strategy in 2022 should reconsider its approach. Research shows brands are 34% more likely to be considered if they have an AR experience. A Snap survey of Saudi in December 2021 showed that almost two in three Snapchatters are willing to spend up to $2,700 per gift. Even better, demand for AR is customer-driven. An Alter Agents study commissioned by Snap revealed that 75% of Snapchatters wished for more AR experiences for shopping and gift-giving. The upcoming Ramadan season, the busiest shopping period in the region, is an excellent opportunity to drive new growth by leveraging AR-based shopping.
AR is the ultimate call-to-action engine. A third of Snapchatters Snap surveyed in December 2021 in Saudi Arabia confirmed buying luxury items after seeing an ad on Snapchat in the past month. While competing platforms have been around longer, Snapchat ranks as the number four channel for purchasing luxury items in the Kingdom.
The luxury industry can no longer ignore the influence of millennials and Gen Z customers. AR speaks to a new generation of digital-native shoppers who are used to buying online and whose first experience with a luxury brand is most likely via its website or social media. Millennials will make up 50% of luxury sales by 2025, and Gen Z shoppers already account for nearly 10% of the market. In addition, millennial buying power is increasing year over year. The Snapchat Generation has a whopping discretionary spending power of $425 billion in MENA, reaching SAR 3.4 trillion in Saudi Arabia and AED 216 billion in UAE.