How Augmented Reality boosts upselling and cross-selling in retail

Despite the current economic downturn, the global market outlook for Augmented Reality (AR) is promising. While the technology reached a respectable value of $15 billion in 2020, it is expected to grow into a breathtaking $122 billion dollar industry by the end of 2026, with retail being one of its main sectors of application. Read on to find out more about why you should integrate AR into your own retail sales strategy and how AR can boost your business’ upselling and cross-selling efforts.

Why AR should be part of any modern advertising strategy

AR technology lets you superimpose digital content on top of real world images and objects, which users can view through their mobile phones. This opens up a multitude of possibilities particularly for the retail sector, with the primary value lying in enhancing the customer’s shopping experience.

Let’s have a closer look at how AR can positively impact the shopping experience for customers.

1. AR allows to visualize product details that are valuable to the shopper and help them make a purchasing decision. For instance, such visualizations may include extra information about the product, user manuals, or a live-size image of the item on display.
2. AR can provide interactive and engaging experiences for the shopper. Retailers can use AR to create interactive buttons that forward customers to a website where they can find, for instance, personalized recommendations including similar items from the shop’s product assortment or a smartly placed promo code to further incentivize the purchase of other products. Apart from helping customers make more informed purchasing decisions, AR transforms shopping into a more fun and immersive experience.
3. AR helps retailers improve customer satisfaction and, as a consequence, reduce returns. By proving additional information and allowing customers to interact with products before purchasing them, retailers can effectively reduce the number of returns due to a misalignment between the customers’ expectations and what the product is actually able to deliver. This can lead to happier customers and more loyalty to the store.

Upselling and cross-selling as a revenue driver for businesses

In addition to, or rather as a consequence of, enhancing the shopping experience for customers, AR can also act as a real sales driver for businesses. Its easy and user-friendly application make AR particularly well suited to complement and support upselling and cross-selling efforts across retail.

Before we dive right in to see what exactly it is that AR can do in this regard, let’s first clarify the meaning of upselling and cross-selling.

Upselling and cross-selling are marketing methods businesses use to encourage customers to purchase additional or complementary products or services.

While upselling is the practice of encouraging shoppers to purchase an upgraded, often higher-priced version of a product or service they’re interested in, cross-selling aims to convince customers to purchase related or complementary products or services, often at a discounted price. By offering, for example, a special package deal, retailers might try to cross-sell a television stand or a sound system in addition to a TV set.

Both upselling and cross-selling can be effective ways to increase sales and revenue, but they should be used carefully to ensure that they are not perceived as pushy or manipulative. This is where AR comes in as it enables businesses to better showcase the real value of their products and services and to help customers make informed purchasing decisions by providing immersive visualization options of additional information about the product and other offers.

How AR can help with upselling and cross-selling

Now that we’ve established the meaning of upselling and cross-selling and how these techniques impact revenue performance, let’s have a look at what makes AR so effective at boosting businesses’ upselling and cross-selling efforts.

1. Sales teams can use AR to demo the product in real size

Regardless of their level expertise, in the end any salesperson’s success is strongly dependent on the tools that are available to them during their interaction with a customer.

When upselling or cross-selling, it's important to focus on the value that the upgraded product or additional service will provide to the customer. AR lends itself like no other tool to emphasizing that value proposition for customers. This emphasis could be in the form of providing engaging visualizations of additional product details (e.g. product specifications or details about features) or it could be as simple as visualizing what the product would look like in a different color or if upgraded with additional features.

Ultimately, sales teams can use AR to help customers make informed purchasing decisions, which may lead to them buying additional products or higher-priced options.

2. With AR, customers can still access the immersive experience themselves even if sales teams are unavailable

AR can also be effectively used in retail environments without dedicated sales teams, such as supermarkets. For example, advertisers can easily add the immersive experience to the packaging of a product or link it to a QR code prominently placed on a pricing tag.

Customers can then scan the QR code with their mobile phones and view the experience directly on their screens via their browser. This means all that customers need to access the AR content is a phone with an in-built camera and access to the Internet.

3. AR lets you place ads and coupons where there’re none

AR can facilitate upselling and cross-selling by providing customers with personalized product recommendations based on their interests and preferences.

For example, a home decor retailer could use AR to create an interactive product catalog that recommends complementary or enhanced versions of items based on the product their customers are showing an interest in.

Another way of using AR in this regard would be to add special promo offers that customers can unlock by clicking on a prominently placed button directly within the experience. This way, customers can discover new products and may end up adding more items to their shopping carts.

5. AR provides a psychological reward for the shopper

When used in a retail setting, AR allows customers to interact with products in a way that feels real and tangible, which makes their shopping experience more enjoyable and engaging. This increased enjoyment of the shopping process provides a psychological reward in itself, thereby positively impacting customer satisfaction and loyalty.

As happy and satisfied customers are found to be willing to pay more, integrating AR into your retail strategy can have a direct impact on the results of your upselling and cross-selling efforts.

6. AR helps save time and expenses tied to the logistics of bringing products into stores

Sometimes, stores struggle putting all the products they carry on display due to the limited floor space available to them, which is a hindrance to any sales growth potential.

With AR, this is a problem of the past as customers can now experience any product as if it were physically present in the store. Instead of physically bringing in the product, an augmented version of it can easily be attached to a product brochure or a QR code placed wherever it makes the most sense from a sales perspective.

In addition to saving time and expenses associated with transporting and setting up the product in store, particularly if we’re talking about a large and bulky item such as a TV or sofa, this will also positively impact your cross-selling approach.

The best AR tool to use to improve upselling and cross-selling results

When looking for the right AR creation tool to help with your upselling and cross-selling initiatives, 2 main requirements should be met. First, the AR experiences created should be easily accessible by customers, and second, the AR tool should be specifically designed for the purpose of supporting large-scale advertising campaigns.

With the all-in-one WebAR platform Squars, this is exactly what you’ll get.

SQUARS provides a completely web-based environment that allows to create, share, and view exciting AR experiences directly through the browser. All that customers need to access the experience is a phone with a camera and Internet connection. You can find an overview of the advantages of WebAR in our dedicated blog post.

In addition, SQUARS offers everything marketing departments and advertising agencies need in order to create and launch an ad campaign in no time: a user-friendly UI that requires no prior knowledge in coding, a well-structured collaboration environment with project-based team and communication features to facilitate feedback loops, and customizable campaign sizes.

Contact SQUARS and explore exciting partnership options for your ad campaigns

If you’re interested in improving your upselling and cross-selling results with the help of AR, we recommend that you check out our platform. Sign-ups are free with no credit card information required.

We also encourage you to reach out to us via our contact form so we can individually discuss your plans further and explore potential partnership options.