How Retail uses Augmented Reality?

Retail companies are becoming increasingly dependent on immersive technologies such as Augmented Reality to drive engagement and conversions. According to a report by MarketsandMarkets, the global augmented reality in retail market size was valued at $1.4 billion in 2020 and is projected to reach $8.1 billion by 2025. In this blog, we will learn how retail companies are using AR in a variety of ways to enhance the shopping experience of the consumers. 

What is Augmented Reality and how does it work?

Augmented reality is an immersive technology which combines virtual information with the real world. This virtual information could be a text, video, 3D models or music, etc. There are different types of AR applications including marker-based, markerless, and location-based.

Marker-based AR

It works by scanning a marker which triggers an augmented reality experience. With the help of smartphone’s camera, the users can simply hover it over an image or a QR code and see a 3D content or a video placed in the real world. 

Marker-less AR

Unlike using an image or a code, marker-less AR uses the camera to detect objects in the environment and motion-sensor to detect floor surface and place 3D objects. Many upcoming smartphones are equipped with LiDAR technology for in depth precisioning.  

Location-based AR

Location-based AR depends on a real-time location system which identifies the present location of the user through the help of smartphone’s sensors. Many retail companies are using the technology to anchor product categories to make in-store shopping experience seamless for customers.

Use Cases of Augmented Reality in Retail

Virtual try-on: 

Virtual-try-on (VTO) technology allows retailers to let consumers try on products such as clothing, cosmetics, shoes, watches and much more. VTO technology enables consumers to evaluate their products, which in turn affects their purchase decision. According to research, VTO technology provides utilitarian and hedonic value. The former involves helping consumers with the fitting of a product, its size or color, whereas, the latter involves creating an interactive and immersive experience for consumers while doing online shopping. 

VTO works with the help of a smartphone’s camera which tracks the real-world objects. Then, the device camera analyzes the image to identify its features such as patterns, edges and textures. Next, the features are used to identify the orientation of the camera, whether it is landscape or portrait. Finally, the 3D model, text or animations appear on top of the real-world. 

Sephora, a cosmetic company, offers a virtual-try on with its ‘Sephora virtual artist’ in its iOS app which overlays a virtual tutorial on the user’s face showcasing how to apply contour, highlighter and false eyelashes. Amazon, launched their own virtual-try on for their shoes allowing customers to simply point their camera at their feet and scroll through a variety of shoes. UK retailer, Marks and Spencer is piloting a virtual try-on allowing customers to see how an array of outfits will look on them. 

In-store navigation

An AR in-store navigation is a technology that uses a camera on a device such as a smartphone or a tablet to overlay an interactive visual guide in the real-world to help customers navigate through a physical store. It enhances the overall shopping experience as it enables customers to find what they are looking for easily and quickly.

Apart from locating the product on shelves, retailers use AR in-store navigation to create personalized experiences on the basis of customers’ shopping history. For example, directing them towards discounted items or seasonal products which they are most likely to purchase. For most retailers, in-store navigation has become a part of a brand’s omni-channel marketing strategy to create seamless and consistent experiences for their customers. 

Lowe, a home improvement company, is using in-store navigation. Once the user enters the store, it drops digital breadcrumbs that will take customers exactly to the place they want to go. Macy’s, once one of the largest department stores, is using in-store navigation which significantly mitigates the hassle of asking store employees for directions. 

Product visualization:

Product visualization allows retailers to create engaging 3D models for customers to visualize in their own space. Instead of seeing 2D images or videos of the products, customers can see the object in real life and how it complements other objects in the same environment. For example, a user can select a furniture item from a retailer’s website, place it in the real world, and change the color and size as needed.

AR product visualization opens up a new opportunity for brands to attract and engage customers by enabling them to comprehend the product better. This can certainly help reduce any ambiguity or hesitation that a consumer might have while purchasing the product. Moreover, such novel experiences can bring customers closer to the brand and boost loyalty, and help retailers increase their sales and reduce return rate. 

Crate and Barrel, a leading furniture company uses product visualization to attract both online and brick & mortar shoppers. Using their ‘View in my room’ tool, customers can place more than 5000 items in their living room. IKEA, lets users place IKEA products from sofas to lamps, rugs to tables in their spaces. 

Product Information

Product information plays a pivotal role in a customer’s buying decision. With AR, retailers can add in an extra layer of information such as product’s nutritional value or brands’ history in a spatial environment. Instead of writing the crucial message at the corner of product’s packaging, AR expands the territory and allows retailers to create meaningful and interactive experiences. 

Additionally, the novelty of AR product information leads to deeper connection between consumer and brand. Not only do consumers spend time with the brand’s messaging but it makes them feel like a valued customer. Moreover, AR let’s brands move away from facts and figures and create a compelling narrative, which stays in the minds of the audience for a longer time. 

Walmart, one of the largest retailers, is using AR to allow shoppers to point their smartphone at store shelves using Walmart app. Consumers looking for gluten-free items can visualize the product information overlay the items without having to pick the items and rotate it to find the details. 

In-store displays

For many shoppers finding the right piece of clothing or a bag or any other item can be a cumbersome process. Even if the customers decide which product to buy, standing in the queue can be a bit annoying. Furthermore, sizing differences between brands would leave many shoppers stranded and waiting for an employee to hand over a different size. 

To overcome this issue, many retailers are using ‘Smart Mirrors’, which shows the user’s image on screen when they stand in front of it. Unlike using a smartphone to try on a particular product, Smart Mirrors have the capability of superimposing garments with different sizes and colors. 

H&M Group, a Swedish fashion retailer, is using smart mirrors across stores in the US to offer personalized styling and virtual try-ons to customers. 

Over the next few years, we are going to see AR technology going from nice to have to being a pivotal part of retail operations and marketing strategy, giving customers a new shopping experience while ensuring conversions, brand-awareness and less return-rates.



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