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AR in Retail Will Be the Norm Sooner Than You Think
Many retailers traditionally utilize a portion of their funds and resources to test new in-store experiences each year, especially pop-up shops. However, 2023 is beginning to change all of that, with more big-name retailers opting to experiment with virtual stores and AR.
Similar to a video game experience, shoppers will be able to explore an immersive world, big or small, and examine products like they would in a physical store. The added benefit is the e-commerce checkout and delivery system.
And even though there are critics who dislike the perceived complexities of virtual shopping, according to PYMNTS, retailers are still searching for innovative and efficient ways to improve the shopping experience. Augmented reality (AR) is turning out to be just that.
According to Research and Markets, “Augmented reality is a technology, which uses the existing user’s environment and overlays the digital or virtual content or information over it to offer an immersive digital experience in a real-time environment.” AR can also consist of computer-generated 3D environments so that end users enter an artificial world while no longer seeing the real world.
As discussed by Adweek, this technology is more than just a mobile app video game, as “brands that have embraced AR have seen a significant impact to their bottom line. In fact, studies show that consumers are willing to pay as much as 40% more for a product that can be experienced through AR. Using AR gives customers the confidence to buy, increases their post-purchase satisfaction, and reduces return rates.”
Furthermore, Research and Markets reported that “augmented reality in retail market size was valued at $2 billion in 2021, and is estimated to reach $61.3 billion by 2031, growing at a CAGR of 41.4% from 2022 to 2031.”
Bloomingdale’s is one big-name brand that took advantage of 8th Wall web-based AR for its 150th anniversary. Shoppers were sent AR-activated catalogs and could scan AR-enabled pieces to see real-life models walk around in selected clothing that appeared true to life. The gamble paid off since “this initiative led to a 22% higher conversion rate to shop and a 38% higher engagement rate,” according to Adweek.
Another successful example is how the online art gallery Saatchi Art created an AR experience called “View in My Room” that allows over 1 million pieces of art to be overlaid into a user’s home. Using their smartphone or tablet, the end user can select a work of art from Saatchi Art and see it hung on any wall in their home without the need for an app.
Saatchi Art decided to pursue this avenue after their survey revealed that 87% of art buyers are hesitant to make purchases without being able to see the artwork in advance in their homes. According to the company, their AR strategy “has successfully helped art buyers with their buying decisions online with an average 17% increase in spending.”
In the world of retail, AR is also allowing for customizable products, personalized shopping experiences, optimized warehouse spaces, “try before you buy” interactivity, and more detailed information about products being sold. And since AR in retail is still in the developing and transitional phases, brands can capitalize on the wow factor of this technology while pioneering the new frontier.
Discussion Questions
DISCUSSION QUESTIONS: Do you think AR will be more impactful than standard e-commerce shopping, prompting more consumers to go digital than ever before? Do you foresee any other increased pros and/or cons with AR shopping?
Poll
Loading …BrainTrust
Ron Margulis
Managing Director, RAM Communications
Karen S. Herman
CEO and Disruptive Retail Specialist, Gustie Creative LLC
AR isn’t new in retail. Companies like IKEA, Target and others have been using it for years to allow people to see what furnishings look like in their home. I am sure that more immersive experiences are possible and, in some cases, will be engaging and interesting. However, a lot of AR is still very rudimentary; in many cases, it is more of a gimmick than a viable way of shopping. As for completely immersive worlds where we can shop, we have heard this before with all the metaverse nonsense. I have yet to see anything compelling or game-changing.
AR holds get promise for shopping, but despite the successes described, it still has a long way to go. The fact is, many companies have been chasing the AR-dream for years, and investing billions. Google took a big swing at it with Google Glass, Meta has famously invested billions and Apple recently announced their contribution to AR with its Vision Pro headset. So herein lies the problem: the cost and quality of AR headsets. I have no doubt that AR innovation will continue and it will eventually create exciting new ways to shop and engage with products and brands, but it’s still a work in progress as the technology continues to improve and becomes affordable for the masses.
I love the fact that AR can be described simply as a “confidence builder”. No need to over promise. AR helps turn some Unknowns into Knowns. I am deeply skeptical that customers would pay more as the result of an AR experience. That makes no sense. It makes perfect sense that AR would increase conversion rates and decrease return rates. That combination is a big deal.
I don’t believe there will be much interest initially in AR but as the population ages out it will increase in popularity. Forget about converting baby boomers or millennials, the target is Gen X and beyond. AR is here to stay but it won’t replace but augment both online and in store experiences.
Retailers will want to explore all the potential uses of AR. The use of AR for research is definitely viable. One challenge for in-store shopping research will be the use of googles. Of course, an immersive AR store can be developed and then the walkthroughs and AR shopping could be done from anywhere. Let’s not forget wearables and on-shelf sensors. Augmented Reality involves all types of IoT devices and analytics, not just goofy-looking goggles.
The key here will also be staying true to the brand. Every aspect of testing, gathering feedback, and the user experience will need to be designed around the retailer’s existing brand experience.
AR helps today’s shopper develop a personal relationship with tech and grow digitally. I’ve been beta testing emerging tech in retail for the past ten years and am very pleased to see AR work through today’s retail landscape. AR is working nicely for tech savvy brands, like Coach and their partnership with ZERO10 to bring AR to the street with AR mirrors and AR storefronts. Shoppers are finding a comfort level with using AR at their own pace, and seeing that it provides increased convenience and efficiency.
AR will continue to be limited to select retail verticals that require senses beyond sight and sound for purchasing decisions. I don’t foresee applications in the grocery, drug, convenience or foodservice channels in the next few years. In channels mostly reliant on sight and sound — apparel, consumer electronics, furniture and house goods — innovation is moving quickly as developers work with retailers to give shoppers an immersive that they can’t even get at a physical store. Not just how a room will look with new furniture or a new dress will look with accessories, but how the shopper will live in that room or in those clothes.
Why does it always have to be all or nothing? Of course AR and any technology that can facilitate the decision process, especially the digital one, is beneficial but it won’t work in all cases and it doesn’t replace the “touch” experience of physical retail. I’ve used AR to choose counter tops for my kitchen and it was more than just a toy. It was extremely useful (and, admittedly, very fun for my nerdy side). However, though I believe that AR could increase conversion and engagement, I’d like to meet the people that were willing to pay 40% more for a product that can be experienced through AR. I’ll take the 40% discount and skip the AR, Bob (RIP). Traditional ecommerce never slayed the physical retail dragon and it has been trying to be more human and bridge the physical divide ever since it accepted that reality. Technology is a great way to do that and a trend I hope continues reasonably, logically and profitably – I know, it’s a big ask!
AR has a niche role to play in retail. It’s still in its early stages, but for certain categories, furniture and home decor in particular, there’s a role for AR. For the vast majority of categories, however, AR adds friction to the customer’s experience. For most items consumers are buying online, they want to find what they want quickly and check out fast. AR is the antithesis of that.
Definitely! I bought sunglasses via an AR experience. They were great! Super happy with the experience – and I’m super fussy with glasses. One thing to note though. I wanted not just to try them on but see different options side by side. I accomplished this by taking screenshots and pasting them into a slide. But it would be great if AR tech let you take snapshots for comparison rather than just letting you see a live view or one view at a time. It would also provide great data to mine.
AR is quite useful for customers but in very limited ways. And the referenced article minimizes disadvantages which will always limit its usefulness. Projecting new furniture into an existing room, for example, offers a very limited sense of what that furniture will be like and risks customers buying things they hate or rejecting things they would have liked. Why? So many reasons. Fabric in real life is much different. Size and weight of furniture is much different in the real world. Rooms change drastically depending on light yet defining light in AR is something even the most sophisticated animator fights to get right.
So is AR the missing ingredient for getting people to but through digital and online stores? No. It’s not.
AR, when joined with AI is going to continue to grow in importance over the next ten years. It will add importance in many retail segments including most Specialty, Home Furnishings, Automotive and many others. Once retailers are able to build a persona for the individual consumer for reference using AR the marketing and save the sale opportunities will become immersive and endless. Forward thinking retailers will invest now, gain the early learnings, build a knowledge base and allow their customers to adopt at the consumers’ pace, It is not some thing to force on the consumer.
Gen X and beyond are the target audience, and AR will enhance, not replace online and in-store experiences. Retailers should explore AR’s potential, including research and immersive stores accessible anywhere.
AR enhances the experience in different industries such as healthcare-aiding surgery; education- interactive learning; real estate-virtual tours; gaming-immersive experiences; retail-virtual try-ons; manufacturing, streamlined processes; tourism, guided exploration, etc. In retail & e-commerce, customers are willing to pay 40% more for AR-enhanced products, boosting confidence and satisfaction while reducing returns.
On the flip side, potential cons involve privacy concerns, technical glitches, dependency on technology, and initial adoption challenges for certain demographics.
Yes, AR has the potential to be more impactful than traditional eCommerce shopping. Despite the convenience of online shopping, there are still some products that consumers prefer to experience or view in person prior to purchase. AR technology helps to bridge the gap between virtual and online, allowing the customer to shop where and how they want, and even turn their own homes into the showroom with the help of AR.
From a brand perspective, this technology will help significantly increase add-to-cart behavior and decrease returns, better engaging the customer and providing them with a more realistic online shopping experience. In a time when brands are looking for ways to curb customer returns, this offers one possible solution. The downside of course, as with any new technology, is that some products currently appear better than others when rendered in AR. Retailers may also need to reassess their tech stacks to see how this new technology with integrate with their existing infrastructure. However, this will change quickly just like with any other emerging technology.
AR has a lot of promise, but also has a ways to go. I can see the value in it, particularly for items that are large in size and/or expense for home decor to enable consumers to visualize in their environment. I used it to see what new countertops would look like in my home and while it gave me an idea, the quality wasn’t quite good enough to convince me. I think as it progresses and features are added it will be particularly compelling as a tool that designers can use to develop an entire look and will assist when individuals want to compare amongst a variety of choices.
The meaningful inflection point is when AR will be used on a commonly held device like mobile or glasses to impact the physical shopping experience. Everything else is the same point solutions of makeup try on and furniture visualization that we have seen for years. So when will that be? Product identification models are getting good enough to run locally, but currently take a up a huge local footprint. Depending on network is too bandwidth hungry (maybe even for 5G except with a lot of optimization). I wouldn’t see AR being common place for 5-10 years.
I’m not sure how AR can be “more” impactful than standard digital shopping, as it cannot exist without a digital experience platform on which to operate. Said differently, AR is a feature of digital shopping that serves to enhance the shopping experience for the consumer, by aiding in the process of evaluating a potential purchase.
Whether evaluating a home furnishing purchase, virtually trying on a new dress or a new pair of glasses, AR enables a “try before you buy” experience that in some cases exceeds the experience that a consumer could expect in a physical store. In short, i could serve as a conversion optimizer, return reducer and a differentiating capability for a retailer that could grow sales and customer satisfaction. It’s utilization is moving main stream with each passing year, and consumers will benefit greatly from it.