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The Case for Augmented Reality in Retail

  • 9 min read
  • February 28, 2019
The Case for Augmented Reality in Retail

Advances in technology and ever-changing consumer expectations have challenged retailers to become digital innovators. Now more than ever, retail corporations have begun to shift priority from selling products in store, to creating the optimal customer experience.

Many have claimed that Augmented Reality is the “Next Big Thing” for retail businesses. But what exactly is AR, and how can it provide an irresistible opportunity for retailers of all sorts? Keep reading to learn all about AR and how it can give your retail business a competitive edge.

What once was a far-fetched concept has now become a reality, and forward-thinking retail brands are incorporating AR technology into their unique customer experiences. Retail use has bolstered demand for AR apps and services as well. Analysts predict that the market will go from $2.4 billion in 2016 to $61 billion by 2023.

As Lou Bennett, head of marketing for Benefit Cosmetics, says, “AR should have a big say in the future of commerce and the wider retail industry given how difficult high street stores are finding it now. The brands who will win be those that are able to integrate offline and online mediums well to provide moments in shopping that are experiential.”

AR is shifting the consumer retail experience, while creating major opportunities for retailers across many types of product offerings. But what exactly is AR and why is it so beneficial in the consumer engagement?

augmented reality in retail
Augmented Reality in Retail Fashion

What is Augmented Reality (AR)?

AR is the technology that overlays information and virtual objects on real-world scenes in real-time, adding computer-generated graphics to a pre-existing environment. The origin of the phrase “augmented reality” comes from the word “augment,” which means to add or enhance something. AR technology utilises graphics, sounds and touch feedback to enhance the user experience in the natural world.

Many people often confuse AR with its cousin, Virtual Reality (VR). While VR allows you to inhabit a completely computerised environment, AR utilises your current environment and simply overlays the digitised material on top of it. Virtual and real words harmoniously coexist with AR, providing users with a new and improved natural world where virtual information is used as a tool to provide assistance in everyday activities.

Several categories of AR technology exist, each with varying differences in their objectives and applicational use cases.

Crucial Trading AR
Crucial Trading Inspire by KIJO

Marker-Based Augmented Reality

Marker-Based AR, also referred to as Image Recognition, utilises a camera and a visual marker, like a QR code, to produce a result. However, the result is only produced when the marker is sensed by a reader. Marker based applications use a camera on the device to distinguish a marker from any other real world object. Distinct, but simple patterns, like the QR code, are used as the markers because they can be easily recognised and do not require a lot of processing power to read.

Example: Marker-Based AR is used primarily in QR codes. South By Southwest (SXSW) has used QR codes for years that allow attendees to exchange business cards.

Markerless Augmented Reality

Markerless AR, also referred to as location-based, position based or GPS AR, is the most widely implemented application of AR. This style of AR uses a GPS, digital compass or accelerometer to provide data based on your location. Recent updates to AR technology have introduced plane detection capabilities that can anchor virtual content to surfaces at any orientation. A strong force behind markerless augmented reality technology is the wide availability of smartphones and location detection features they provide. It is most commonly used for mapping directions, finding nearby businesses, and other location-centric mobile applications.

Example: Markerless AR is most recognised in the mobile app Pokemon Go, which projected animated characters at real-world landmarks and locations.

Projection-Based Augmented Reality

Projection based augmented reality works by projecting artificial light onto real world surfaces. It allows for human interaction by sending light onto a tangible surface and then sensing human touch of that projected light. Detecting the user’s interaction is done by differentiating between an expected (or known) projection and the altered projection (caused by the user’s interaction). This has been used in computer keyboards and even three-dimensional and interactive holograms.

Example: Disney Theme Parks use Projection-Based AR for a unique experience.

Superimposition-Based Augmented Reality

Superimposition-based AR either partially or fully replaces the original view of an object with a newly augmented view of that same object. In this style of AR, object recognition plays a vital role; the application is unable to replace the the original view with an augmented one if it cannot determine what the object is. This is one of the most widely-recognizable forms of AR. It’s used in mobile apps, social media platforms and even in-store retail technology.

Example: Doctors can use Superimposition-Based AR to superimpose an X-Ray view of a patient‘s body part on the real image to provide better understanding of the damage to bones.

Projection-Based Augmented Reality
Source: Essentra Components

The Benefit of AR in Retail

AR is becoming an increasingly important component of the retail sales funnel. In fact, 75 percent of consumers now expect retailers to offer an AR experience. While there are many opportunities for AR to transform retail in the upcoming years, here are just a few of the benefits AR can have for retail businesses today.

Increase Impulse Purchases

Utilizing AR in a retail setting has been shown to boost impulse purchases. 72 percent of consumers have admitted to buying something they hadn’t intended to because of AR. While many shoppers are organised and go through all the steps of the purchasing funnel, from product research to completing the sale, there are many more that proceed to the cart because they bumped into an item they love. AR works effectively for boosting impulse purchases. Even if the consumer doesn’t need the item at that time, AR drives a unique opportunity, which is often the main motivation behind a purchase. Additionally, use of AR technology in in-store operations can shorten the time it takes to make a purchase, which can reduce the occurrence of pre-purchase buyer dissonance.   

augmented reality for consumer shopping
Source: AR Shopping

Create a Personalised Experience

When thinking about strategies to deter customers from your competitors, AR technology creates personalised experiences that entice your customer base and keeps them engaged throughout the purchasing process. Take Topology Eyewear’s use of AR for example. The company uses AR to provide its customers the opportunity to see what they’d look like in a variety of frame styles and colours. In addition, Topology uses the technology to create a custom fit through an ear-to-ear scan of the face. Integrating AR technology throughout the sales and customisation process gives Topology’s customers an experience they can’t find elsewhere, and also one that tailors specifically to their needs. Over time, customers that experience the customised service will be more loyal to the brand and likely to become a repeat customer.

Increase Sales Conversion and Decrease Returns

In today’s retail environment, AR can help shoppers easily envision an item they are considering buying, whether it be a couch for their living room or a new pair of sunglasses. Customers spend more time in stores that incorporate AR into their shopping experience and increase their interaction time with a given product. Lengthening time spent connecting with a product encourages a more meaningful customer experience. Consumers can imagine the item within their daily reality. They’ve been able to actually see themselves wearing the item, how it looks in their home or how it can fit into to their lifestyle. Customers then have stronger confidence when purchasing an item. This value of AR technology minimises the likelihood that the customer returns the item, maximizing revenue for businesses.

AR’s Opportunity for Home Interiors

One industry that’s experienced a major benefit from AR has been home interiors. Businesses like furniture companies, flooring manufacturers and interior designers have embraced AR technologies to provide customers with a “try before you buy” experience. Home-focused retailers like Lowe’s, Anthropologie, Wayfair and Pottery Barn, just to name a few, have already applied AR functions in-store and online. The apps lay the brands’ merchandise over images of customers’ homes, which allow “people [to] better visualise,” says Laura Alber, the chief executive of Williams-Sonoma.

Furniture, flooring installments, or other home-improvement purchases are usually costly investments and are made infrequently by consumers. AR technologies have decreased buyer’s hesitation and often motivates them to purchase these big-ticket items.

AR has been a technological development that KIJO has been working with a great deal in recent projects. The first was with Crucial Trading, a UK-based flooring manufacturing brand that creates bespoke carpeting and floor coverings. KIJO created an AR application where Crucial Trading’s customers can build a rug online using their 3D product builder. With the AR application that KIJO designed and built, customers can view the rug in their home prior to making a purchase. This creates an optimal customer experience for Crucial Trading, as it provides an interactive experience that makes purchasing a rug as simple as ever. The tool allows customers to tailor their rug to the exact dimensions, colour scheme and materials that suit their home the best. KIJO’s newest project is with a chandelier company based in New Jersey. They’re creating an AR-based tool that allows the company to sell their products in a three-dimensional environment online. These projects at KIJO are creating forward-thinking resources for retail companies that are facilitating their sales processes and providing their customers with seamless purchasing experiences.

augmented reality home interior
Source: Augmented Reality for Home Products

Final Thoughts

AR retail technology supports the customer experience to make it simpler and more fun and for many retailers, is turning into a substantial source of revenue. It’s demonstrating a strong trend of interest from both retailers and consumers and is likely to continue in development and popularity as time progresses. If you’ve yet to incorporate AR in your retail strategy, it’s time to start considering it.

If you’re looking for assistance with building an app or even a website then contact us today. The KIJO team are on hand to assist with our years of experience.

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