Sources: Lego, Marvel, IKEA
Has augmented reality tech reached an inflection point at retail?
At Adweek’s recent Social Media Week event, Jeremi Gorman, Snap’s chief business officer, said she believes augmented reality is at an inflection point in marketing technology similar, to the emergence of social media in the early 2010s and the web in the late 1990s.
“Getting it right now is just as important as scoring the right URL in 1999, and the right social handles in 2010,” she said, according to Adweek. “We all know how fleeting the moment is to stake your claim as an early mover, and that moment has arrived for AR.”
AR campaigns gained significant traction during the pandemic as restrictions on in-person interactions prompted more retailers to introduce virtual online try-ons. But retailers are also trying out other applications as AR tools have become easier to implement on social platforms like Snapchat and Instagram as 5G rolls out.
A new university study from City University of Hong Kong and Singapore Management University identified four broad uses of AR in retail settings, along with examples:
- To entertain customers: AR-enabled experiences can drive traffic to physical locations. Walmart collaborated with DC Comics and Marvel to place special thematic displays with superhero-themed AR experiences in its stores. In addition to creating novel and engaging in-store experiences, the displays encouraged customers to explore different areas in the stores.
- To educate customers. AR can bring a new level of interactivity that helps translate information. Toyota and Hyundai have utilized AR to demonstrate key features. In-store navigation apps at Walgreens and Lowe’s overlay directional signals onto a live view of the path in front of users to guide them to product locations and notify them of special promotions along their path.
- To facilitate product evaluation. AR helps users visualize how products appear in their actual consumption. IKEA’s AR-enabled Place app overlays three-dimensional models of furniture onto a live view of customers’ rooms.
- To enhance the post-purchase consumption experience: AR can enhance and redefine the way products are experienced post-purchase. Through a companion AR app, animated Lego characters spring to life and interact with the physical Lego sets, combining physical and virtual gameplay.
- Augmented reality in retail and its impact on sales – Journal of Marketing
- Augmented reality in retail and its impact on sales – Science Daily
- AR Is the Future of Marketing – Adweek
- Augmented Reality Gets Pandemic Boost – The Wall Street Journal
- Has Snap laid the foundations for AR to be taken seriously? – The Drum
- Once Considered Gimmicky, Branded AR Is Having Its Moment – Adweek
- Worldwide Spending on Augmented and Virtual Reality Forecast to Deliver Strong Growth Through 2024, According to a New IDC Spending Guide – International Data Corporation
Discussion Questions
DISCUSSION QUESTIONS: Did augmented reality make a significant breakthrough during the pandemic? What applications do you see becoming more commonplace in the near-term for retail?
Poll
BrainTrust
Lisa Goller
B2B Content Strategist
Christine Russo
Principal, Retail Creative and Consulting Agency
AR can enhance the retail experience. But, the key is to “enhance” not take away from or distract. When used well AR can help with shoppability, improve shopper understanding, and increase stickiness. When used poorly, it can get in the way or may simply be ignored.
Augmented reality (AR) has made significant gains in capability and usability over the past several years. The pandemic allowed brands who embraced this technology to exploit it and make it available to their customers. Just like many technologies, there was an acceleration of the adoption and use of it.
AR allows customers to experience products without having to be there. When used the right way, it’s an incredible experience for the customer. It’s still new and fresh. There will be a point where it moves from novelty to just another online tool. I view it as a video demonstration on steroids. I don’t mean to offend AR companies with that comparison, but this is what it is. A tool to be used to take the customer on a more experiential demonstration than a static picture and description of the product.
During the pandemic, many retailers made significant advances in implementing AR applications to enable shoppers to virtually try on or test merchandise. As more consumers experience AR applications for product evaluation, way-finding and entertainment, AR will become an expected service for many retail segments.
I remember seeing AR at retail and tech shows in the early-mid 2000s. It was tapped as the new marketing tool for the future. At this point, I would have expected to see more retailers using AR to sell their product or service. I see loyalty programs being more tailored for retail customers to get customers back to shopping either in-store or online.
Yes, the pandemic boosted AR’s utility in retail and its pervasiveness. It overcomes inaccessible stores with digital online convenience and personalized visuals.
The try-before-you-buy application will be common, as it boosts e-commerce sales and consumer trust. Online shoppers see exactly what they’re buying, reducing the costly risks of dissatisfaction and returns. AR is also versatile, evolving beyond Warby Parker eyeglasses to Gucci engagement rings and David’s Bridal wedding dresses.
Bottom line: AR is ideal for e-commerce growth.
I can’t tell. I can tell you that I have never been presented with augmented reality when shopping online (of which, admittedly, I do not do much).
before COVID-19, AR, like the QR code, had a hard time going up against the chants of in-store experiential retail. It was so binary. Now the sky is the limit for so many forms of engagement. This “inflection point” has been inflicting for a while and easy, fast, affordable and accurate solutions will lead to adoption and, of course, a screaming need like a pandemic.
Even if engagement wanes post COVID-19, AR must be a part of omnichannel and marketing engagement going forward. Innovative retailers run in tandem with the evolution of engagement.
I have personally used AR to buy eyeglasses. The technology worked great. I also used it on Wayfair. The most practical impact would be on reducing buyer remorse and returns. There is a great opportunity to increase the confidence in purchase with product fit, size, appearance, colors, look, etc. across multiple categories – beauty and skincare, clothing and apparel, most of the home goods, furnishings.
Retailers should focus on usability and functionality before prioritizing the gimmicky stuff.
Like so many things, the pandemic accelerated development of products or systems and new experiences, in this case for shoppers. But the indomitable future is bringing the entire store (shopping experience) to one’s own home.
5G has started to make AR a game playing reality. That is what we are discussing here. (Definition of 5G — it is not the 5G that the mobile phone providers advertise, it is much more, with higher speeds and higher capacities.) But 6G is on the horizon, the magnitude in the differences with 5G is 100 times or more. Imagine the service, the creativity, the ability of a shopper to explore and buy all types of products from cosmetics to automobiles, confidently, without leaving home. That is when AR will take hold and be the norm. And be sure there will be such a thing as 7G.
For certain categories like eyewear, home decor and make-up, AR has become a necessary part of the buying process. It’s not going to change.
Haven’t seen significant breakthroughs for AR. The standard furniture, hardware, makeup, and shoes is where I’ve witnessed any level of retail AR, and in most cases by the largest chains, like Home Depot, Sephora, Nike, etc. I continue to expect a tiny portion of retail will be using AR immediately post pandemic, with slight growth at prior rates. Less than 1% of retailers were using AR/VR as of late 2019 (MobileMarketer) There has been limited change since then. We have seen more AR applications on the industrial side of the house, but for most of retail it’s a shiny new object.
From a merchant perspective, absolutely!
Giving merchants and buyers an opportunity to save time and money on travelling to trade shows and showrooms to purchase product, allowing them to discover product in remote parts of the world, and giving smaller more obscure brands exposure has helped retailers add $ to their bottom line.
Enabling this technology on new emerging marketplaces and platforms to help retailers buy better will be something that I hope becomes part of the buying model in a post-pandemic world. The environmental impacts on traveling to trade shows and markets alone would impact the fashion industry’s carbon footprint in a HUGE way.
AR can be used to entertain, but for it to enhance the shopping experience it needs to deliver actual value such as information that drives purchase decisions. For specific scenarios where additional information/direction is needed, I think AR is a good option for tech-enabled consumers.