Augmented Reality Is Reshaping Retail And Re-Engaging Customers

By Dr. Hendrik Witt, Chief Product Officer, TeamViewer

The advent of AR can strengthen consumer sales even during a pandemic.

The steady advance of augmented reality into the world of consumer retail sales, as with earlier digital technologies, may have been inevitable. Already, by 2019, retailers of different types were testing a variety of approaches that involved using AR to enhance the customer experience, as well as the seller’s own business performance. And the initial results seemed encouraging.

But the onset of COVID-19 deeply rattled the retail universe, emptying stores, shedding employees, sending buyers online, and accelerating by years the otherwise orderly adoption of AR – only this time as a way for retail sellers to connect with potential buyers, in a low-touch, socially distant kind of way. From the relative handful of pre-Covid applications of the technology, which was designed to aid customers in their buying decisions, the pandemic prompted a surge of interest in ways that AR could help retailers survive what had quickly become a volatile and unpredictable environment.

Their interest, in turn, unleashed a world of creativity in finding innovative uses of AR to help keep alive the battered retail industry. That interest was encouraged by pre-pandemic survey findings showing that consumers were likely to spend more on a product if they had experienced it through AR and that they would prefer to buy more frequently from retailers who used AR in their businesses¹. That same idea was reaffirmed during October of 2020, deep into the pandemic, when Shopify observed that products using AR content enjoyed a much higher conversion rate than those without it².

Of course, different products are experienced differently, so it follows that how AR can enhance the consumer’s experience ought to differ as well – and they do. For example:

IKEA and Wayfair were early adopters of AR, using it to show how their furniture and other goods would look in the customer’s home. Customers can move the furniture around virtually to see if it fits, and how well it matches the colors, style, and general appearance of their homes. The IKEA Place app, developed in collaboration with Apple, enables shoppers to see the company’s products superimposed on their living spaces³.

Earlier versions of Magic Mirrors – an AR tool for shoppers to try on different clothing items virtually, in front of a mirror outfitted with sensors – have been experimented with since 2010, when Macy’s rolled out its smart dressing room. That technology helped to boost the development of even smarter mirrors which were rolled out in a pilot program with Neiman Marcus⁴. Both versions use on-prem installations and were designed to attract visitors into their stores.

Sephora, the French-based retailer of beauty products, takes a different approach. It has an AR app that shows how different shades of lipstick, for example, would look on the real-time image of a customer through their smartphone⁵. Eyebuydirect is one of several online companies selling prescription eyeglasses and using your phone or computer’s camera to show how different frames would look on your face. However, except for standard reading glasses, an optometrist’s prescription, typically based on an office-based phoropter, is still strongly recommended. However, unlike magic mirrors, both uses allow the final sale to be completed without ever going into a store’s beauty counter or an optometrist’s office.

The Gap has created an app it calls the “DressingRoom” for remote sales. It allows users to try out a garment using a virtual mirror in which a virtual life-size mannequin appears to wear the clothes that the customer is considering. To match the mannequin to each person’s size, the customer must first enter their body measurements. Unlike try-ons that use a conventional fitting room, this type of transaction is completely contact-free and can be transacted from anywhere⁶.

But what about the social aspects of shopping, where groups of friends shop together in real time? There’s an app for that, too. Levi’s has rolled out a co-watching video app that can be followed by people from separate locations. It is designed to help re-create the social experience of shopping – one that many people have missed since the pandemic began. And Burberry has even developed a game-like application using entertainment content to appeal to younger customers⁷.

Pandemic-cautious shopping led to sharply increased demand for curbside pickup and same-day delivery options, with store employees picking out and packaging the requested items for customers. But in a supermarket with thousands of products, brands, sizes, and flavors, it takes time to find the right ones, particularly for new employees just starting to learn the store’s shelving arrangements. Here too, AR-enabled wearables like Google Glass are being used to graphically provide the worker fulfilling the order with product location and availability information, displayed on smart glasses, while freeing both hands to retrieve items and move their cart. Pick rates have improved by as much as 40 percent.

AR also has post-retail applications. For example, the Korean automaker Hyundai developed a digital manual that uses AR to help owners fix common problems with cars, like changing a flat tire. The owner uses their phone’s camera to show the car’s problem area. The software recognizes what is shown, digital images and instructions appear on the screen, and the owner can then follow those steps to fix the problem⁸.

Other B2C product makers and retailers also have found value in AR. They include such well-known companies and brands as Converse, Burberry, L’Oreal, BIC, and Lego. But one of AR’s most natural applications is in the world of B2B sales where there are usually no retail stores and where some of the products – water treatment systems, nuclear power reactors, and marine vessels, for example – are so large that they can’t readily be transported for exhibition or demonstration purposes. In those cases, collateral material, using AR technology, is often given to potential buyers to help them decide whether the product is appropriate for their needs.

The range of applications for AR in retail is continuing to grow and vendors are finding even more imaginative uses for the technology every day. One great advantage is that many of their apps can be accessed using smartphones, which have by now become ubiquitous with more than 2.5 billion in the hands of consumers worldwide. Even small, independently owned stores that can’t create their own apps can post QR codes by the merchandise they carry, allowing customers to open the producer’s application to play, learn, try out, and engage with the product. As a result, the phenomenon of AR in retail doesn’t appear to be waning anytime soon. If anything, it is extending the reach of sellers and increasing the engagement of buyers.

Augmented reality has come a long way from a science-fiction concept to a science-based reality. In fact, most of the tech giants including Google, Apple, Facebook, and Microsoft are already investing heavily in AR-enabled smartglasses⁹, a sign that augmented reality glasses will soon overtake traditional smartphones. And as it becomes more and more ubiquitous in our everyday life, its presence in retail has never been stronger. For retailers and business owners, this is the right time to invest in AR, as early adopters of this promising technology are going to be clear winners, creating increased profitability and long-time survival in the market.

Sources

1. https://retailnext.net/blog/7-examples-of-retailers-making-use-of-augmented-reality
2. https://hbr.org/2020/10/how-ar-is-redefining-retail-in-the-pandemic
3. https://retailnext.net/blog/7-examples-of-retailers-making-use-of-augmented-reality
4. Are Magic Mirrors the next big thing? | Chain Store Age
5. https://overlyapp.com/blog/10-augmented-reality-retail-examples-for-customer-experiences/
6. https://retailnext.net/blog/7-examples-of-retailers-making-use-of-augmented-reality
7. https://hbr.org/2020/10/how-ar-is-redefining-retail-in-the-pandemic
8. https://overlyapp.com/blog/10-augmented-reality-retail-examples-for-customer-experiences/
9. https://www.axios.com/ar-glasses-what-comes-after-smartphone-4bc96c46-3bf5-4c8d-9658-732b1c245d9f.html