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AR and VR in Commerce Market Size, Share, Industry Trend & Forecast 2030
AR and VR in Commerce Market
Market Overview
The market for AR and VR in Commerce is forecast to reach $10 billion by 2030, growing at a CAGR of 28.4% from 2024 to 2030. The market is driven by increasing popularity of Augmented Reality (AR) & Virtual Reality (VR) devices due to better user engagement. The commerce industry saw a huge change when e-commerce concept gained mass adoption. Augmented reality and virtual reality could become an extension to e-commerce. For example, recently, IKEA launched an application called “IKEA Place” which allows users to view the furniture products as if they were placed in the user’s home. This would help speed up the purchase decision process.
The surge in AR and VR adoption is reshaping the commerce landscape. The ability of the technology to create virtual showrooms and allow customers to explore products from the comfort of their homes without having to visit a retail store is gaining traction. AR and VR technologies provide additional information about products, such as interactive 3D models, tutorials, and reviews. This trend is fuelled by the pursuit of enhanced customer engagement, reducing returns, and enriching the shopping experience.
Market Snapshot:
Report Coverage
The report: “AR and VR in Commerce Market– Forecast (2024-2030)”, by IndustryARC covers an in-depth analysis of the following segments of the AR and VR in Commerce Market.
By Type – AR (Software and Services), VR (Software and Services)
By Platform – Head Mounted Display, Head Up Display, Handheld Device, Mobile Devices, Projector and Wall Display.
By End Use Industry – Tourism, Retail, E-Commerce and Advertisement.
By Geography - North America (U.S, Canada, Mexico), South America (Brazil, Argentina, Chile and others), Europe (Germany, UK, France, Italy, Spain, Netherlands, Denmark and Others), APAC (China, Japan India, South Korea, Australia and Others), and RoW (Middle east and Africa).
Key Takeaways
- Augmented Reality and Virtual Reality has opened up new avenues for Commerce Industry. V-Commerce (Virtual Commerce, which is Augmented and Virtual Reality integrated Commerce) has brought in quite a remarkable change in the online retail world, as Augmented Reality doesn't require or requires less hardware and requires devices that most people are familiar with such as tablets and smartphones.
- Both Augmented Reality and Virtual Reality technically elaborates the scope of E-Commerce and took the interaction to a whole new level altogether.
- As per IndustryARC research, more than 60% of online shoppers prefer to purchase items that offer Augmented Reality on websites in one way or the other. It’s inarguable fact that both Augmented Reality and Virtual Reality has increased user interaction for many companies and helped them to upsurge their user base.
AR and VR in Commerce Market Segment Analysis - By Platform
Mobile phones are fastest growing subset with an estimated CAGR of 35% during the forecast period, in terms of platform. Smartphones are the preferred device for many consumers when it comes to online shopping. Over 60% of US adults believe that mobile shopping is a necessity for convenience in online shopping, according to a December 2022 Morning Consult poll. MAR (Mobile Augmented Reality) is expected to account for more than 52% of AR Application Market by 2030. The significant focus of companies in developing MAR solutions is expected to drive market growth.
AR and VR in Commerce Market Segment Analysis - By End Use Industry
AR and VR in commerce sector is driven by rising number of AR solutions focused on the E-Commerce market. Augmented Commerce is currently being used by various retailers to sell their products such as IKEA (Furniture), Converse (Shoes), Flipkart (FMCG), Amazon (FMCG), etc. Augmented Commerce could be used by organizations to allow users to try games, clothes, furniture, cars, etc. before purchase. For instance, the North Face VR is a virtual reality experience allowing customers to explore outdoor destinations while wearing North Face gear. People could view what a flat would look like (and features like paint and furniture) by walking around through the application, and another application allows users to view the interior and exterior of various cars. Google has made a huge investment in an ecommerce giant that was making use of augmented reality technology to boost its sales. Similar investments are expected from organizations that want to leverage the technology for their operations.
AR and VR in Commerce Market Segment Analysis - By Geography
North America holds the largest market share of 42% in the AR and VR in Commerce Market in 2023. Firstly, the region boasts a mature and technologically advanced ecosystem, with a high adoption rate of AR and VR technologies across various industries. Major tech hubs and innovation centers, such as Silicon Valley, contribute to the development and deployment of cutting-edge AR and VR solutions. North America houses numerous prominent players in the AR and VR industry, including leading tech companies and startups. The concentration of these firms enhances the availability and accessibility of AR and VR products and services in the market. The region's robust infrastructure, favorable regulatory environment, and a high level of consumer awareness collectively position North America as a leading market for AR and VR in commerce.
AR and VR in Commerce Market Drivers
Rising Investment from Market Leaders
The market for AR and VR is rising due to increased investment from market leading players. Facebook integrating augmented reality ads into its application: Facebook will be providing users an augmented reality experience via advertisements in the application. Users of the application may view fashion goods such as eye glasses and shoes, and try them on virtually. IKEA introduced an AR app named Place, which enables Apple users to set IKEA furniture in their apartments and preview an interior before buying products. Thanks to this solution potential customers can choose furniture easier. Companies like Meta and Google are trying to accelerate that trend by investing more in AR and VR tools. For example, in May 2022, Google acquired Raxium, a startup that specializes in smart glasses with new technologies. By integrating Raxium's expertise in smart glasses and cutting-edge technologies, Google aims to enhance its capabilities in the AR space. In March 2022, Alibaba led a US$60 million funding round into the Chinese AR startup, Nreal. These investments align with the broader industry trend of advancing AR hardware, particularly in the form of smart glasses, which holds immense potential for transforming the commerce landscape.
Rising Focus on Improving Customer Experience
Augmented Reality & Virtual Reality is a perfect mix of technologies to engage a customer. A memorable happy experience often leads to a satisfied customer. AR/VR technologies are likely to give an enriching experience to the customer which increases the chances of customer satisfaction significantly. As this technology is meant to make it easy and memorable for customers and it is likely to have an upper hand in leading to satisfied customers for companies as well. Customer engagement and interactivity is not only required after onboarding the customer but is important to aware and attract as well. Consumers use smartphones to try on clothes or test makeup virtually, thanks to innovative like ASOS. Burberry also embraces AR, using it in its app for interactive events and collections. In the automotive industry, Jaguar Land Rover employs VR for virtual test drives and customisation options, enhancing the decision-making process. Thus, enhanced customer experience offered through AR and VR solutions will drive market growth.
AR and VR in Commerce Market Challenges
Lack of Awareness of AR Content
The biggest challenge with AR is the lack of awareness of AR content from consumers. AR and VR content can come in many forms, and this could be a cause for confusion. There’s still not much clarity over whether consumers are aware these tools are available to them, or if they realize they’re engaging with AR or VR when they use them. In a recent research study conducted by GWI in the UK and U.S., we found that over 90% of consumers in these markets are aware of VR, with around 65% saying they’re aware of AR. Awareness of AR hovers between the 70-75% mark among the 16-44 age group, but drops dramatically among 45-54s (56%) and 55-64s (44%). By gender, males (71%) display a notably higher level of awareness of AR compared to women (59%). This has resulted in limited focus on the AR market especially for applications outside gaming.
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Market Landscape
Product launches, acquisitions, and R&D activities are key strategies adopted by players in the AR and VR market in Commerce. Top 10 companies operating in the market include
- Amazon
- IKEA
- Meta
- Sephora
- BMW
- Harley Davidson
- Sotheby’s
- Walmart
- Nike
- H&M
Acquisitions/Technology Launches/Partnerships
- Amazon is trialing VR in a few selected cities in India, with a view to boost their Prime Day sales.
- Facebook will be providing users an augmented reality experience via advertisements in the application. Users of the application may view fashion goods such as eye glasses and shoes, and try them on virtually.
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