Originally published on Marketing Interactive

This article was written by Dileep Raj Singh, head of digital, OMD Asia Pacific.

Social commerce has become an integral part of the digital media mix for many consumer brands, particularly in fashion and beauty categories.

Within social commerce, live commerce is the most widely adopted tactic to drive sales across the full funnel. However, there is a gap in the way consumers experience the brand in live commerce, and this gives way to an interesting opportunity, particularly in the beauty category.

The opportunity I am alluding to is Augmented Reality (AR), which could power social/commerce platforms to level up the experience. Despite being around for decades, AR has not realised its full potential, largely due to the tech limitations and costs. Past challenges notwithstanding, numerous studies and experiments have already shown that AR positively impacts brand engagement, consideration, conversions, average order value, product returns, and more.

Now, we stand at the brink of realising AR’s full potential, particularly in conjunction with the emergence of AI. This brings about white spaces that brands can fill with their innovative live commerce experiences.

Here are some ways brands can leverage AR to achieve this:

1. Embedding interactive AR features into live streaming

Currently, many apps use AR technology to help consumers virtually try-on products, but this is an isolated feature, which diverts consumers away from the convenience of live commerce shopping.

Allowing brands to embed their AR features within live streaming will significantly change the entire experience, where a consumer can tap a button during a live stream to go to a split screen to virtually try on a product that is being showcased or was showcased earlier in the live stream.

YouTube, for example, has made this experience available through its AR Beauty Try-On feature, allowing viewers to access a palate of make-up colours while a tutorial video plays at the top of the screen.

With deep AR technology, the power of AI, and advanced facial recognition that is available today, brands can make the virtual try-on experience seamless. This is a huge improvement in AR experiences from a few years ago that were marred with technical challenges hurting its reputation, which in some cases, still keeps consumers away from using AR for virtual try-on as a standalone product.

But once you have this feature available within live streaming where consumers are already engaged, AR could see an uplift in usage and elevate the virtual try-on experience for brands in the beauty category to boost sales and revenue.

Tarte Cosmetics, for example, saw encouraging results when they incorporated virtual try-ons that combine the power of AI and AR for consumers to experience personalisation across their range of cosmetics.

The brand saw a 200% increase in sales for customers experiencing virtual try-ons, a 30% increase in add to cart, with a significant increase in time spent on site, and reduction in calls to customer service desk for help with foundation shades.

2. Personalisation using AI supported by AR

Expanding upon the interactive AR experience during live streaming, personalisation in recommendations from brands during live streaming could push the boundaries of the virtual try-on experience.

Powered by AI, brands can enable skin, lip, and/or hair analysis to recommend the most suitable product for the consumer and offer them a personalised try-on experience with deep AR. Doing so gives users the power and choice to personalise their interaction with the brand’s live streaming efforts.

There are various studies and surveys where marketers across brands vouch that personalisation is a key contributor to achieving their goals.

For example, Clinique used Perfect Corp’s AI and AR technology 2 to recommend three lipsticks that pair well with their already personalized foundation shade. With personalized features such as these, Clinique’s website dwell time was 4x longer, it led to 30% larger basket size, and increased conversion rate by 2.5x.

Research from CB Insights states that consumers who get personalised recommendations are 75% more likely to make a purchase.

Personalisation in live commerce will give brands a significant opportunity to create memorable and customised interactions with individuals using the power of AI and AR while retaining the capability of broad reach that live streaming offers.

This approach will not only help personalise the live-streaming experience but also provide brands with insights for further personalisation and/or aid the brand’s product insights and development.

3. Cost

While there are merits to trialing and implementing new technology, brands will also face challenges in their journey to creating an innovative social commerce experience.

Building and maintaining an AR capability is not cheap both from a tech and resourcing viewpoint, especially when complicated tech is involved in managing large amounts of data and personalisation. Hence, it is important for brands to do a cost-benefit analysis to establish that the benefits of AR will surpass the initial investment for building the experience.

Aspects to consider for the analysis include but are not limited to a reduction in in-product return rates and customer service calls, reduction in physical infrastructure and in-store operational costs, and potential increase in sales.

This will help brands move forward with confidence. Alternatively, brands could offset some of the cost by partnering with existing virtual try-on platforms to build a customised solution.

4. Platform dependency

Enabling the above-mentioned AR features within live commerce is heavily dependent on individual platform priorities and speed of development. Some large brands like Estee Lauder, Revlon, L’Oréal, or Neutrogena that have significant experience with AR apps could work with platforms to co-create the capability on live commerce for themselves. Outside of a few large players, other brands are at the mercy of platforms enabling this capability.

Nonetheless, embedding external AR capabilities into an existing platform is not new. For example, Alibaba’s partnership with Perfect Corp for an AR Makeup app, WeChat mini programs using YouCam, or the integration of FameBit (now BrandConnect) capabilities into YouTube.

5. Data Privacy

While personalisation using AI and AR can change the game for brands, the privacy of user data will need to be a priority. It is incumbent upon the brand and/or the platform to gather consumer consent for the use of their data, pics, or live videos for analysis (skin, hair, lips, etc.) and the extent of the usage of this data (both new and existing). The use and limitation of consent will need to be clearly articulated and enforced to maintain consumer trust.

In conclusion, a win-win situation for brands and consumers alike is an immersive AR experience that can be taken to consumers within the environment of live commerce where consumers are already engaged with a brand (unlike expecting them to take the effort of using a brand app). This is an opportunity to provide indelible brand experiences tailored to individuals without compromising on scale and reach.