Shopify has signaled visual shopping ambitions through its latest acquisition: AR startup Primer. For those unfamiliar, Primer specializes in AR product remote visualization with a focus on home renovation. In particular, its strength is lighting and textures — key factors when choosing things like paint and wallpaper.
For example, in interior design projects, consumers can point their smartphone camera at their bedroom wall to then superimpose a variety of styles and textures. It’s the modern — and more visually intuitive — version of the longstanding practice of holding up paint swatches to envision colors and patterns.
This involves a combination of Primer’s 3D-modeling tech and its partnerships with tile and textile brands. The latter gives it an inside track to develop realistic product simulations, not to mention a channel for distribution and monetization. It mostly reaches consumers through its iOS app, built on Apple’s ARkit SDK.
But the company’s go-to-market formula now takes a new trajectory. Shopify hasn’t revealed how it will integrate Primer, but it will likely deploy it in-app and get it in front of more consumers. The play here for Shopify is to boost stickiness among consumers and value-add for its merchants (more on that in a bit).
Faces & Spaces
As background for this move, one of AR’s most popular use cases is visualizing products on “faces & spaces.” That includes product categories like cosmetics and couches. The former is a big “try-before-you-buy” category while the latter addresses pain points like making sure big items fit in your home before buying.
To chase this opportunity, a few companies have leaned into AR product visualization, including IKEA, Wayfair, Houzz and Shopify. Each have launched features or dedicated apps to help consumers visualize home goods. It’s all about gaining buyer confidence through a better sense of size, style and texture.
That buyer confidence is a key factor, as it drives eCommerce performance for online retailers. Specifically, AR has been shown to boost conversions by as much as 300 percent and reduce returns by as much as 40 percent. These KPIs in turn drive AR programs and investments from the above eCommerce players.
All of this has been amplified over the past year as AR has piggybacked on Covid-era eCommerce inflections. The technology can bring back some of the real-life dimension that was yanked away from consumers in retail lockdowns. The question is if AR’s exposure during this period translates to long-term traction.
Back to Shopify’s strategic drivers, this deal aligns with a few other moves we’re tracking that trace back to merchant acquisition and retention. That includes amplifying distribution to various consumer channels such as Walmart, Google, and Facebook. Just last week it formed an affiliate marketing deal with BuzzFeed.
Deeper AR integration will join those efforts in the broader push to attract and retain merchants. In fact, home renovation and decor is an underserved segment for Shopify. The Primer acquisition is a clear move towards expansion into this opportune — and AR conducive — vertical. Expect more vertical expansion.
Meanwhile, the terms of this deal weren’t disclosed. Primer’s existing investors include Slow Ventures, Abstract Ventures, Foundation Capital, and Expa. Its app and services will shut down next month as it moves on to Shopify’s greener pastures. Its team of eight employees will all transition to Shopify positions.