Dive Brief:
- As more retailers adopt augmented reality technologies, Kohl's is expanding its partnership with Nextech AR Solutions Corp. to create "thousands" of 3D product models to improve shoppers' e-commerce experiences at the department store, according to a Tuesday press release.
- Nextech's 3D WebAR for Ecommerce tool allows shoppers to interact with their desired items in front of any backdrop they choose. The expanded partnership comes after "extensive product testing," according to the release.
- The Kohl's 3D models will soon be displayed in organic Google search results, which will let consumers review and interact with Kohl's products, per the press release.
Dive Insight:
With its Nextech partnership, Kohl's joins a growing list of retailers enlisting 3D technology to enhance its online shopping experience. Last October, David's Bridal used technology from Vertebrae to create 3D and AR product pages for its best-selling dresses. Digital platforms like Etsy and Snapchat have integrated AR tools to help consumers virtually try on products or visualize items in their house.
Now that the COVID-19 pandemic has catalyzed a spike in e-commerce, retailers are turning to AR technologies to somewhat replicate the in-store shopping experience and hopefully reduce unnecessary returns. The National Retail Federation estimated that online returns doubled between 2019 and 2020, and e-commerce was a major driver of returns growth last year. An April report from eMarketer predicts that e-commerce sales could rise by 13.7% to $908.7 billion in 2021.
"Augmented reality in e-commerce can not only drive sales, but reduce customer returns as the buyer feels a higher level of product familiarity before placing the order — the latter being a key point for many e-commerce customers," Evan Gappelberg, CEO of Nextech, said in a statement.
As Kohl's focuses on improving its digital shopping experience, the retailer has also experienced an uptick in sales and is making changes to its physical stores. Last December, the company announced plans to open at least 850 Sephora shop-in-shop locations within its stores by 2023. The company in early August commenced the rollout of Sephora shop-in-shops, beginning with more than 70 locations across the U.S.
Around the same time, Kohl's announced Q2 net sales increased by 31.4% compared to the same period last year, exceeding its previous expectations.
"As pleased as we are with our ongoing strategic progress, much of our opportunity is still ahead of us," Michelle Gass, CEO of Kohl's, said during the company's earnings call. "We are on the eve of launching several transformational partnerships that will drive sustainable growth for years to come."
