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November 23, 2023
| 5 mins read
If you have landed here, it is likely you are a brand owner or a C-level executive in the retail sector. Now, imagine waking up to a record sales conversion on your e-commerce platform. Your customers are 25% more engaged and satisfied with the shopping experience – from exploring to buying. Shoppers’ trust in your retail business has surged, boosting brand value and ROI.
All these can become a reality with augmented reality in reality
AR offers an incredible way for customers to engage with retail items, whether online or in-store. Since its inception a few years ago, AR’s foothold has increased rapidly in retail. According to a report, the market value of AR in retail was US$2 Bn in 2021, which will balloon to US$61.3 Bn by 2031 – a phenomenal 30X growth in just a decade!
Let’s understand how augmented reality is transforming retail businesses as well as shopping experiences.
In an era of digitally native shoppers, augmented reality in retail is an immersive technology that blurs the lines between the physical and digital (phygital) worlds. Speaking in detail, AR superimposes virtual elements onto a user’s real-life setting to improve their digital experience of the existing physical environment.
Imagine your customers checking how a new pair of jeans would look on them or how a couch would seamlessly fit into their homes, all with just a few clicks/taps on their Internet-connected devices. Augmented reality in retail stores makes this state-of-the-art shopping experience possible.
While AR has been around for a while (think Pokémon GO and Snapchat’s dog filter), it has become a powerful lever for both direct-to-consumer (D2C) brands and brick-and-mortar businesses.
To enjoy the AR retail experience, users must point their smartphone cameras at a product first. The built-in AR tool then uses various sensors, such as GPS, accelerometers, and gyroscopes, to gather information about the real world. Cameras capture the user's surroundings, while other sensors provide data about the device's orientation and movement.
The collected data flows to a computer or a powerful processor, which evaluates the video stream to understand the user's environment, location, and the objects within it. Some (not all) AR applications use markers like QR codes or special visual patterns to identify specific objects or locations and link them to corresponding digital content.
Based on the processed information, the AR tool produces digital content, such as 3D models, images, or text. These elements are accurately positioned and scaled to follow the real-world objects or locations.
The AR tool overlays the augmented content onto the user's view of the real world through a display device, either a smartphone, glasses, or tablet. The user sees a composite picture that includes both the physical environment and the digitally generated elements.
Users can interact with the augmented content using gestures or voice commands, and the system responds accordingly. The AR software continually adjusts the overlay as the user moves or as the environment changes.
Augmented reality has positively impacted multiple industries, some of which include:
Every 3 out of 5 shoppers return products due to poor style or fit, resulting in a 10% loss. The situation further amplifies when people are buying clothes online. AR in retail is a much-needed antidote for fashion retailers. The technology enables shoppers to “try before they buy,” thus eliminating guesswork and decreasing product returns by 20%.
Moreover, fashion retailers can install AR-powered smart mirrors on shop floors and inside fitting rooms to let visitors check multiple garments and colours without physically undressing - a boon for busy shoppers.
With AR-enabled platforms, carmakers can enable prospects to drive a vehicle without even being in one. Customers can view vehicle models, functionalities, and colours in real time through AR apps, headsets, and glasses.
From the driver’s point of view, potential customers can see the world beyond the windshield, enjoying the full-blown vehicle experience. By moving the AR-enabled camera 360 degrees, they can even check out the entire car (interior and exterior) and customise it as they wish. Also, interested buyers can unlock various repair and maintenance operations using smart pop-up instructions.
All these benefits eliminate the need for people to hit the road in real for a test drive. A mobile device and an AR app, and they are good to go.
One of the most popular AR use cases in the cosmetics & beauty industry is virtual makeup try-ons. Using only their Internet-connected devices, shoppers can try on various shades of eyeshadow, lipstick, and false eyelashes virtually. They can swap between beauty products, adjust the makeup intensity, and save preferred looks for future purposes.
AR in retail uses facial tracking technology to track several points on customers’ faces and deliver hyper-realistic mock-ups. That way, shoppers can better see how a beauty product will look on them from various angles and refine the results to achieve the desired look.
AR retail experiences especially benefit customers who are hesitant to test new makeup products or seek a more convenient way to experiment with different shades. Plus, they stave off the need for in-person trials and returns.
Have you tried browsing online for a particular jewellery piece, and the product page bombards you with so much information that you could not digest at all? Consequently, you are left confused and uncertain than when you logged in.
That is how information overload looks. Fortunately, AR in retail prevents information overload by presenting product details to shoppers in digital snippets and in a more captivating way.
AR overlays relevant product information directly onto the jewellery’s virtual image. Customers can access information, including the 4 Cs of diamonds (carat, cut, colour, and clarity), gemstone details, the type of metal used, pricing, and even the craftsmanship behind each piece. All of these by simply interacting with the AR interface.
This educational aspect not only improves the shopping experience but also builds trust and confidence in the brand.
Here are some popular examples of how brands have deployed augmented reality in retail stores.
PC Jeweller introduced augmented reality in retail stores, which lets shoppers try on jewellery pieces virtually in its 11 showrooms across Delhi-NCR. Powered by the mirrAR app, customers can use the digital platform through iPads stationed at multiple locations without actually wearing the items. These iPads would behave like smart mirrors in retail showrooms, offering customers a memorable shopping experience.
Interested shoppers will have to look into the smart mirror, and the digital store will come live. They can virtually try on jewellery items without manually putting them on, choose designs from the brand’s 95 retail showrooms across 75 cities, and place an order.
Plus, customers can get real-time fashion suggestions from bloggers, experts, and influencers worldwide as the AR tech plays nicely with mirrAR’s fashion advice platform.
Burberry has collaborated with Google to bring in-store shopping right to shoppers’ digital gadgets in the form of Google Search. This functionality allows online shoppers to browse, for example, a Shield Sling Bag, and activate the AR mode to see it in three dimensions.
In addition, the AR app not only helps the fashion retailer deliver more connected experiences and personalisation but also helps manage shoppers’ expectations. This offers customers a more realistic view of products before purchasing, eliminating in-store visits and directly interact with items, thus potentially reducing the likelihood of product returns.
Toyota launched an app-free AR retail experience to promote the latest model of the Toyota Crown in the US. The automaker’s multichannel campaign - “Says So Much” - uses digital out-of-home (DOOH) ads that drive customers to the immersive experience with a QR code on the ad.
When customers scan the QR code, they can see a 3D rendering of the new sedan on their smartphone screens, placed within the framework of their immediate surroundings. Using the AR lens, they can rotate the image, shuffle between the car’s colour, zoom in, and get behind the wheel for a (virtual) test drive. They can closely see the automobile from all angles in a way impossible on a website.
Toyota developed the AR retail experience in partnership with Yahoo.
As AR in retail spreads its wings across numerous use cases, here are some prominent trends you should keep an eye on.
AR and AI are a match made in heaven. The synergy is unleashing a new level of sophistication in AR applications.
AR tools continually gather data about the user’s existing environment via multiple sensors, including facial and spatial recognition software. You need complicated algorithms to make sense of sensor information about the surroundings. AI simplifies that process and makes it more accurate than a human-built model.
Besides, AI analyses physical environments, decodes user actions and gestures, and delivers more tailored and contextually relevant AR content. Case in point, AR-enabled apps can leverage AI algorithms to understand a conversation’s context and translate it more precisely, promoting seamless communication no matter the language.
Furthermore, retail brands will focus on AI chatbots and virtual assistants that support customers while shopping and offer personalised recommendations, whether online or at stores.
Accessibility has been a longstanding challenge with conventional AR tools. Until now, customers had to download a specialized app/software to activate AR retail experiences in traditional apps. This approach is inconvenient and takes significant time, leading to poor adoption rates.
WebAR resolves this problem by eliminating the need for users to download a smartphone app. Instead, they can access virtual elements directly from a retailer’s website. This shift extends the accessibility of AR experiences to a broader audience.
Without customers needing to deal with bothersome app installations, Web AR’s browser-based approach saves valuable time and storage space, making immersive experiences instantly accessible. A critical advantage in today’s fast-paced ecosystem where reducing barriers to entry is quintessential.
Influenced by these benefits, 64% of flagship brands are already betting on WebAR, which will represent a global market worth US$21 Bn by 2024.
AR in retail can also serve as a powerful organic marketing tool. Retailers are using the technology to build engaging marketing campaigns and branding materials that capture the attention of their target audience. From interactive AR ads to gamified product promotions, AR enables retailers to create more memorable marketing campaigns.
As such, retailers can spark initial brand love as well as the ubiquity and ease of digital devices to convert prospects into loyal customers.
Today, copying any digital content, including images and captions, you have found on the Internet is easy. Determining whether the digital content is original or a copied version is difficult.
Blockchain provides a way to verify the origin of digital assets in AR, including virtual products or AR ads. This helps ensure virtual elements’ authenticity, preventing fraud and counterfeiting in the retail space. In addition, blockchain’s immutability helps safeguard the intellectual property of AR content developers. You can securely record the ownership and usage rights for AR assets on the blockchain, reducing the risk of unauthorized use or replication.
The Internet can be a discriminatory, hostile, and unsafe space. Hence, a more immersive digital ecosystem, where interactions appear more real, will not be any safer.
AR in retail depends on collecting and evaluating significant chunks of personal information, including preferences, location data, and behavioural patterns. As such, brands must take user privacy seriously and implement procedures and guardrails that keep potential intrusions at bay.
These include transparent data collection practices, stringent user content mechanisms, and robust encryption protocols – retailers must implement every preventative measure to ensure reliable AR shopping experiences.
Devising cyber security strategies for the more immersive and realistic digital environments of tomorrow will increasingly form part of the debate going forward.
AR has captured the center stage in retail today, climbing from nice-to-have to a retail essential. Its ability to simulate realistic scenarios improves customer convenience and loyalty as well as product sales by notches.
We are edging closer to a point where people will be relaxing in the comfort of their couches or sipping a good strong cuppa in the kitchen, browsing through AR apps or wearing AR-enabled glasses to shop for products.
Today, the retail industry is experiencing considerable changes. Shoppers are getting more finicky when it comes to product quality, and the battle for customer wallets is becoming fiercer. Additionally, the number of active AR user devices will reach 1.73 billion in 2024 from the current 1.40 billion.
As such, brands must incorporate AR in retail into both new and existing strategies to unlock new possibilities and improve customer engagement and business growth.
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