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Augmented reality complements e-commerce in New Zealand

A study made in New Zealand found the rise of virtual shopping experiences such as augmented reality and online product try-ons may soon replace the need for tactile shopping experiences, with 62% of New Zealand shoppers more likely to purchase a product they have tried on virtually.

According to the study, customers said that online shopping is convenient (68%), saves time (57%) and makes it easier to compare prices (55%). But despite its benefits, less than half of the respondents (40%) enjoy online shopping, with another 46% on the fence, stating it depends on the store.

For those who have been shopping more online due to the COVID-19 pandemic, it is the physical, real-life experiences they have missed the most about shopping in stores, such as hand-picking items (76%), trying things on (66%), testing items before buying them (53%) and face to face customer service (50%). Interestingly, tactile shopping experiences are more important to women, with 78% stating they miss hand-picking items and 71% who miss trying things on, compared with only 73% and 61% for men, respectively. On the other hand, 55% of men stated they missed in-person customer service, compared with only 45% of women.

As online retailers improve their e-commerce sites by introducing experiences such as virtual product try-ons, online shopping may become more enjoyable for users. Of the 10% who had tried on products virtually online, the majority (70%) were satisfied with their experience, with 62% stating they are more likely to purchase products they have tried on virtually.

The highest levels of customer satisfaction were found amongst those who virtually tried glasses (58%), clothing (79%), makeup (88%), shoes (67%) and watches (75%). Likewise, shoppers were more likely to purchase hair colours (67%), glasses (63%), clothing (63%), make up (81%) and shoes (60%) and watches (75%) after having tried them on virtually.

Almost one in five of all respondents (19%) believe trying on products virtually is as good as trying on a product in real life; with 22% stating they would be willing to spend more on a product if they were able to virtually try it on before purchasing.

Live chatbots, however, received mixed reviews from respondents. Just under half the respondents (48%) believed chatbots were a useful tool while a third (30%) disagreed. When it came to helping drive online purchases, 36% thought chatbots positively influenced their purchase, while 34% said they were unlikely to purchase using one. The biggest complaints about chatbots were that they were unable to solve issues (54%), they continually redirected customers to self-serve FAQs (44%) and respondents felt the chatbots blocked them from accessing a live person (43%).

Studies say that New Zealand is the 40th largest market for e-commerce with a revenue of US$3 billion in 2020, placing it ahead of Iran and behind Portugal. With an increase of 20%, the New Zealand e-commerce market contributed to the worldwide growth rate of 26% in 2020. Revenues for e-commerce continue to increase, new markets are emerging, and existing markets also have the potential for further development.

Also, market expansion in New Zealand is expected to continue over the next few years, as indicated by a Digital Market Outlook. However, it has been predicted that the compound annual growth rate (CAGR 20-24) of the country for the next four years will decrease to 7%, compared to the year-over-year (YOY) growth of 20%. This decline suggests a moderately flooded market. Another indicator of market saturation is the rise in digitalisation of businesses in the country where 61% of the New Zealand population have bought at least one product online in 2020.

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