eCommerce platform Shopify has acquired Primer, an augmented reality (AR) app that lets users test the effects of a home improvement project before getting their hands dirty.
Terms of the agreement, including the cost of the acquisition, were not disclosed in Primer’s blog post, published on Friday (June 11), but the post did note that Primer’s app will shut down on July 10, 2021.
Primer aims to create commerce that is immersive, the blog post said, a goal that is reflective of larger eCommerce trends. Many companies have turned toward a virtual strategy in their path toward economic recovery, as PYMNTS previously reported. Customers want to recreate in-store experiences, and even more so, they want the flexibility to try products before buying them.
“We’re excited to have the opportunity to realize our founding conviction of building immersive shopping experiences on a massive scale at Shopify,” reads Primer’s blog post, written by the company’s co-founders, Russ Maschmeyer and Adam Debreczeni.
Primer offers its augmented reality (AR) technology to brands, which provides both sample and showroom integrations that sales teams and clients can use to view product installations at full scale virtually. The technology can mimic real lighting conditions, textures and sheens that give its customers realistic visuals of tiles, colors and patterns, according to its website.
AR can be a game changer for brands. Shopify released data last year that showed that interacting with AR content when shopping leads to a 94 percent higher conversion rate than shopping without.
In its first-quarter earnings report, the company said it is building out its suite of services to meet consumers’ changing demands and behaviors.
“2020 catapulted commerce into a period of incredibly rapid change, presenting Shopify with unprecedented opportunities in 2021 to accelerate innovation,” the company said.
High interest rates. Pending tariffs on a wealth of foreign imports. Concerns about mass deportations.
Taken together, these factors are all driving a drop in demand for home improvement projects, the Financial Times (FT) reported Sunday (March 2)
As that report noted, shares of a number of companies in this space are reaching historic lows, with the market stressed by the Trump administration’s tariff threats and the possibility of mass deportations of undocumented workers.
“It has been tepid for a while now really since the Fed began raising rates, and I also think the consumer is pretty conservative right now,” said Nicholas Fink, CEO of Fortune Brands, the parent company to kitchen and bath fixtures provider Moen.
The report cited data from the National Association of Realtors showing that pending home sales hit a record low in January, thanks to high interest rates. And Home Depot, the largest home improvement retailer in the country, recently forecast sales growth of just 1% for the year.
CFO Richard McPhail, however, maintained that Home Depot’s customers “remain very healthy,” during an earnings call, as PYMNTS reported.
“As homes continue to age and people are staying in those homes, they’ll eventually do larger remodeling projects. We’re just not sure that comes in 2025 at an accelerated pace,” he said.
The construction industry is also threatened by Trump’s willingness to deport undocumented workers, who make up between 15% to 20% of the sector’s workforce, the FT added.
“Absolutely some of the activity around deportations is a risk for this sector,” said Kurt Yinger, a vice president at D.A. Davidson.
In another sign of consumer caution, recent data from the Bureau of Economic Analysis shows consumers saving more than they’re spending. During January, personal consumption expenditures decreased 0.2% month over month, the first time consumption measured in current dollars fell month over month since March 2023.
When adjusted for inflation, the decrease was 0.5%, the sharpest decline since February 2021. The personal savings rate as a share of disposable income climbed from 3.8% to 4.6%, the largest increase in the personal saving rate in a year.
“The January pullback may not be a one-off,” PYMNTS wrote last week. “Concerns about trade and tariffs led to the biggest monthly decline in consumer confidence since August 2021, per February data from The Conference Board. The slide was seen across all age groups. Four of the five components of the index showed greater pessimism.”