The future of retail: How AR will be the ultimate game changer for how we shop

by | Sep 22, 2021

Imagine being able to try on different shoes, clothes, or a face of makeup before committing to an online purchase. Or maybe you want to see how a dresser or dining room table will fit with your home decor before taking it home.

AR is the long-awaited innovation that makes all this possible. The technology overlays digitally-created content on the user’s real-world environment. It’s a way that brands can create novel and immersive experiences for their consumers through a PC, tablet, smartphone, or even an in-store kiosk. With 34% of customers already using some form of AR while shopping, the trend is already established and it will change the way we shop forever.

What are the benefits of AR in retail?

1.Augmented reality can help online retailers reduce product returns

Online customers are not able to hold products in their hands. They can’t see, feel, try or experience before purchasing. As you’d expect this often leads to disappointment and misunderstanding, which results in product returns.

Last year around 30% of all products ordered online were returned and refunded. AR can help online retailers significantly reduce this rate by allowing customers to digitally try the product before buying. This is compared to 9% of products purchased in a brick and mortar store. This discrepancy alone suggests that there’s a gap there to significantly improve the online shopping experience.

ASOS was one of the first companies to hint at how. The UK clothes retailer created an AR app called “See My Fit” to show what clothing looks like on different body types, to help consumers feel good about the fit on their body type and reduce returns.

ASOS often stocks over 10,000 items at any one time, so clearly photographing every item in 3–4 different sizes is not feasible. But now there’s a digital alternative. The app doesn’t actually put the clothes on different models. Instead it uses maths and wizardry to dynamically adjust the clothes to fit – more or less.

L’Oreal is another innovator in this space who’ve released several AR apps. There’s one that lets users see how they’d look in different makeup. Another called Style My Hair that allows users to become a blonde (or any other hair color) on live video.

IKEA has a mobile app called Place that lets shoppers overlay 3D furniture models in their home or office or anywhere else, to visualize how they would look and fit into their interior space.

76% of shoppers say they would ‘definitely buy more items from online stores if there’s a ‘try-before-you-buy’ option. Also, 40% of the shoppers say that they’re willing to pay more for products they can test through AR.

So, AR solutions can not only reduce the cost of returns for online retailers but can also encourage customers to shop and spend more on online platforms.

2. Enhancing the in-store shopping experience

Most people think AR it’s only for online shopping, but this technology can significantly improve the in-store shopping experience.

How annoying is it when you can’t find any staff to ask for directions to the product you’ve been looking for?

You’re not alone in feeling frustrated by scarce staff; the 2019 Consumer Retail Technology Survey found that 61% of shoppers are looking for ways to save time in-store.

Some forward-thinking brands are solving this problem with AR. Adding in-store navigation to a shopper’s experience allows customers to find what they’re looking for without wasting time.

Most progress is being made in The States, where The Mall of America, Harrods, and Target have all employed beacon technology for indoor navigation and proximity marketing.

AR can also take over your product demonstrations.

Ask yourself this, how many people do you think will wait in line to trial a product, vs just downloading an app to try it digitally on their own phone?

The easier you can make your touchpoints the more likely it is that users will engage with them. Installing an app is easy, and forgetting you’ve installed one is even easier; so they won’t uninstall when they leave the store.

AR mirrors are a common form of demonstration. They let users try outfits without having to visit the changing room, or to visit once they are confident they’ve an outfit they like and consequently are more likely to purchase. It’s also more social. You can’t invite all your friends into the changing room with you, but you can swipe through twenty outfits in a crowded shop with AR.

These apps and experiences don’t need to be helpful. Sometimes it’s enough to be novel and cool. You can’t underestimate the power of cool when it comes to marketing. It’s also one of the hardest labels to obtain as a brand.

One company that’s achieved cool with AR is the Treasury Wines Estates. They created AR labels to promote their limited edition Walking Dead themed bottles. After downloading an app and pointing it at the label, customers are able to see a whole animated scene with characters and zombies and whatnot. If nothing else this experience gives you a reason to keep that bottle on a shelf at home and show it off to your mates. Word of mouth marketing is still the most trusted form and there’s no stronger social proof than what you’ll get from your tribe.

3. Scalable product variations and Low effort showrooms

AR is a powerful tool for showcasing products and running scalable product demonstrations.

If you’re selling cars, you can’t possibly think of showcasing every single model and the 7 versions of red available. So you show the customer a brochure, but then how are people supposed to walk around a car and see the color and model they are considering? AR, that’s how.

With the help of AR, customers can physically see how different colors and designs look on a product. So, all you need to do is have at least one product for each model in your showroom, and use AR to showcase its different variants. This way you’re not only delivering a positive customer experience but also lowering your store operating cost. It’s a win-win situation.

4. More brand exposure and consumer retention

Unless you’re a globally recognized retailer consumers think of you as just another brand.

So, how do you get noticed in this sea of intense competition? If you want our advice, show them something they’ve never seen before. That will get their attention.

When you’re selling products, you can attach an AR story to your logo like Treasury Wines Estates, or a 3D visualization that plays on their phone or PC.

This AR treasure hunt app was created to attract visitors and generate foot traffic for retailers since its launch in November 2017, the app increased footfall by +4.8% against a declining national average of -4.9%.

On a global scale, only 1% of retailers around the world are currently using AR. So, brands that adopt this technology now will have a crucial competitive advantage in terms of consumer awareness and brand recognition. A study also shows that 71% of the consumers will shop more often in a store that uses AR technology.

These kinds of experiences can bring significant exposure to your brand. Having such a positive impact on consumer experience will also influence them to return to your brand for future purchases.

Mobile AR vs Headset AR

To experience augmented reality, you need a digital device. While there are other options, typically this is either a wearable headset device or a mobile phone running an AR application.

AR headsets are more expensive and targeted towards enterprise users. With your hands free it’s easier to work, and because they cover your entire vision it’s a more immersive experience that lends itself well to demonstrating 3D models to stakeholders. Headsets like the Hololens are often used by architects and engineers to illustrate complex ideas outside of their knowledge silos.

The main advantage of mobile AR is that everyone has a smartphone, and there’s an easy way to distribute the apps via the iOS and Android stores.

The reach of mobile AR is far more significant than AR headsets or smart glasses. The average consumer is familiar with how their smartphone functions, and almost everyone can download an app.

Also, smart glasses might be portable, but other headsets aren’t. You can’t always wear a bulky device on your head, and it’s not really a pocket-friendly size that you can carry everywhere. But they are great for in-store experiences. Retailers can have a couple of headsets in their store, and customers could try them on to experience an AR-driven shopping journey.

Even if consumers don’t bring their own phones, the cost of having mobile phones or tablets in a store is much less than an AR headset or smart glasses. So, all of these convenient features make mobile AR a bit more spontaneous.

But if you do have the budget and technical expertise, having an AR headset along with AR mobile apps can take your consumer retail experience to a whole new level.

Smart Mirrors

The purpose of a mirror has been the same for hundreds of years. You can say that it’s one of the least innovative products in history. However, AR is changing that.

Smart mirrors or AR mirrors not only reflect your image back to you, but they also show how you’d look in different styles and outfits. You can think of it as a digital dressing room. Instead of physically trying on every single outfit or accessory, you can just select it on the mirror, and it shows how you’d look wearing that product.

Smart mirrors are incredibly realistic. They combine Artificial Intelligence, Augmented Reality, and Gesture Recognition technology. They use a camera function to scan and create a realistic 3D projection of your body on the mirror. Using AR, the mirror will then augment different outfits onto your real-time projection, and make it appear as if you’re wearing that product.

Major brands such as Timberland, Nike, and L’Oreal are already using smart mirrors in their retail outlets to offer a unique shopping experience to their customers. It’s also helping them to achieve a massive competitive edge over their competition. It’s a fast, fun, and exciting new way of shopping. Also, it completely eliminates the need for a trial or dressing room.

Value of “Try Before You Buy”

When you’re buying a product, you’re not just investing money but also a lot of time and effort. So generally, it would be frustrating and disappointing if that product doesn’t live up to your expectations.

While e-commerce has boomed over the last 20 years, there’s still some anxiety for consumers when buying a product online. Most consumers have to take a leap of faith because their purchase decisions are mostly based on a product image, written features, and reviews.

30% of all online orders are returned, compared to the 8.89% in-store purchases. This really shows the value of trying out products before purchase. When consumers can try a product, they’re able to make a more informed decision about whether or not it’ll suit their needs and expectations.

AR technology goes a long way towards fixing this issue. If you’re buying a shoe online, you can actually see how the shoe will look on you before you hit that purchase button. So, instead of going in blind, you’re actually able to make a more informed decision. This leads to a lower possibility of returning the item, thus reducing the cost of returns for online retailers.

Even in brick-and-mortar retail shops, using AR for product trials can help retailers to provide a more convenient shopping experience, putting less emphasis on physical interactions and fitting rooms.

AR for Furniture Stores

Furniture shopping is often a headache because you’re walking into a store that looks nothing like your home. So, there’s no guarantee that the furniture which looks beautiful in the store, will also look the same within your home interior.

There’s also the concern of size. Would it fit in your house? Which room would it look better in? Unlike clothes, there are no possible ways to physically try out furniture in your home before purchasing it.

With Augmented Reality, retailers can showcase their furniture virtually and consumers can visualize how it would look in their house.

Major brands like IKEA and Amazon have already launched their own AR app, which allows users to see 3D images of furniture in their homes by using their phone cameras. This way consumers are more confident in their purchases.

AR is also a great way of showcasing in-store furniture. It would be impossible to have every piece of furniture in different designs and colors displayed together in a store. Instead, retailers can just have in-store devices or AR apps that allow users to virtually see different designs, colors, and sizes of furniture. It’s a more informed and interactive way of furniture shopping.

AR for Supermarkets

Navigating through a large and unfamiliar supermarket to find all the items on your grocery list isn’t always fun. What if there was a virtual tool to guide you towards your required items? What if you could learn more about an item by simply looking at it through your phone?

This is all possible with AR.

Supermarkets sacrifice a large chunk of their profit margins to increased operating expenses. More customers mean more staff needs to be hired to deliver good customer service.

AR can help to significantly reduce this cost. By simply having an AR mobile app, customers can easily navigate throughout the store and find the items on their grocery list. When the consumer looks at an item through their smartphone camera, useful information like the latest price, reviews, and ingredients pop up on the screen.

By incorporating AR technology, supermarket retailers don’t need to recruit a large customer service team. It can potentially save the cost of having to update product prices every day, print product brochures and catalogues. Also, consumers are more likely to return because they’re getting a positive and fast shopping experience.

AR in Billboards and Signage

AR makes advertising interactive, creating new ways for retailers and marketers to reach out to the consumers.

Imagine a billboard is promoting a big fashion sale. Passers-by point their smartphone camera at the billboard and it runs an animation turning that billboard into a massive roadside TV. That shows the inside of the shop along with some of the items that have been marked down. You might need to be stuck in traffic for a while to have time to download an app and watch an animation, so you have to be strategic about where you place them. But what about adding an AR sign on the pedestrian mall to convince shoppers to make a detour? Bus stops are another great place for AR advertising.

Coca-Cola recently launched an AR ad campaign called “The Arctic Home Campaign”. The ad was designed to promote how Coca-Cola was using its revenue to invest in the polar bear preservation campaign. During this campaign, consumers could interact with virtual animals through AR devices. So, naturally, they developed an emotional connection with the cause and the brand.

Similarly, Pepsi launched an AR billboard ad a couple of years back, where people at a London bus stand would get jumpscares seeing Aliens coming out of a digital billboard. Other major retail brands like IKEA, Walmart, and Samsung are also creating digitally augmented billboards around the world to draw more consumers towards their brand.

The immersive and interactive visual experience, along with the ease and convenience of accessing information has secured AR advertisements a place in the future of digital marketing.

AR and Social Media

One of the most common applications of AR in social media is face filters. Snapchat kicked us off and since then every major platform has added them. But face filters aren’t just for fun and games.

Social media platforms allow businesses to create custom-branded filters to easily promote their brands. For instance, KFC recently created a branded Snapchat and Instagram filter that turned the user’s faces into Colonel Sanders. This funny AR filter became a hit with users.

AR filters are a really effective and powerful way of increasing your brand exposure because it becomes a trend, and thousands of people share it without even realizing that they’re promoting your brand.

Facebook also has a virtual studio called the Spark AR Hub that lets users create AR ads. Businesses can use Facebook’s open-source library of AR camera effects and filters to turn their products or promotional messages into interactive 3D content. From there it can be shared on social media for people to interact with.

Similarly, Instagram has also introduced the ‘try-before-you-buy’ feature for product advertisements. It lets users virtually try on different products through Instagram built-in camera function. Although this feature is only limited to selected brands for now, soon it’ll be open for any businesses that want to sell and promote their products through Instagram.

So, it’ll save businesses the cost of making an AR mobile app, as consumers can simply try on the products virtually through the brand social media channel.

Let’s wrap it up

We’ve talked about a lot of things, but here are the highlights:

AR can allow consumers to trial products before purchasing them online, thus reducing returns and refunds.
AR can enhance the in-store shopping journey by offering an immersive experience.
AR can save the cost of operating an outlet or showroom, and offer you more brand exposure, with the guarantee of consumer retention.
AR mobile apps mean your consumers don’t have to wear any devices. They can just experience it through their smartphones.
You can effectively promote your brand through custom AR filters on social media.
Instead of investing in printed advertisements, you can get AR billboards and signage to get more customers excited about your business.

AR is bringing revolutionary changes to retail. If you own or just starting a retail business and you’re thinking about how to get ahead of such immense competition, AR is the way to go. The AR industry is expected to grow by $162.71 billion within the next 4 years. Now is the perfect time to jump on the AR train if you truly want to build a retail business for the future.
We hope you’ve enjoyed this article. If you’d like to stay up to date with the latest and greatest in virtual reality and augmented reality and learn more about the many applications of VR in business then give our team a call on 1800 418 498 or email us. We’re here and ready to brainstorm your ideas.

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