Augmented Reality (AR) is far from being a brand-new solution or a term no one has ever heard of. That said, it’s still growing immensely. According to a report by The Future of Commerce, it is estimated that the value of the Augmented Reality technology market will reach an astounding $50 billion by 2024.
You might be wondering: How does augmented reality work exactly, and which industries should show particular interest in exploring this solution?
While it is used in a variety of sectors – from retail and gaming, all the way through to medicine and finance, it is perhaps best known to a wider audience through its use in Instagram and Facebook filters.
The idea of enhancing the real-world experience through computer-generated features has become increasingly possible. It comes thanks to the advancements in smartphones, whose cameras are used to add an augmented layer of reality. This presents huge opportunities for eCommerce brands, with AR enabling customers to visualize how products will look in a home environment, as well as providing them with access to interactive, engaging product information that is more relevant due to personalization and customization.
So, how did AR get to this point in the retail world?
Shopify was the first big eCommerce platform that allowed its customers to implement AR into their stores, making it more widespread and open to new markets and categories. Simultaneously, in the tech world, Apple began developing ARKit – a framework for developers that enables them to create an AR experience for iOS and macOS devices. As would be expected, Google soon followed with their ARCore.
Augmented reality in retail – why is it relevant now?
Augmented reality is currently experiencing exponential growth caused by the outbreak of the COVID-19 pandemic. This has especially impacted the retail industry, due to offline store closures. IBM said that the pandemic has sped up the transition to digital shopping by five years or so. It’s also safe to say that AR saved many retailers from significant financial losses. How so?
In the pre-pandemic world, customers were accustomed to making purchasing decisions based on the so-called Research Online, Purchase Offline (ROPO) effect. However, with malls and physical stores closed, how can a shopper check if the product they plan to buy will fit them or their home? Here’s where Augmented Reality comes into play, allowing customers to immerse themselves in the shopping experience from the safety of their homes.
Purchasing items that require a better understanding of their shape, size, and how they will look in the context of their surroundings is now possible without a visit to a physical store. By using their smartphones, shoppers can visualize the product they’re interested in and make an informed decision, thus minimizing potential disappointment. What is even more important though is that AR also helps provide better content. With its interactivity and customization, it is unbeatable, even when compared to the most sophisticated eCommerce product description pages. And, needless to say, a better product experience helps to overcome shopping barriers.
Examples of Augmented Reality
To help you imagine how you could implement AR for your business, it’s best to reach for a few augmented reality examples already on the market. For starters, the Swiss supermarket chain Migros implemented AR in order to add an expanded layer of product information to the goods they sell. By simply scanning an item through the Migros app, customers are given access not only to ratings and reviews, but also to detailed nutritional value, and even recipes. The shopping experience aside, there’s also a very tangible benefit for the retailer – namely, access to shopper data. The more the app is used, the more consumer data is collected and utilized.
The alcohol business has always been among the most creative branches of retail, and Augmented Reality is opening more opportunities for them to stand out. Treasury Wine Estates, a wine distributor, has harnessed the power of AR to bring its bottle labels to life, with brand stories and interactive experiences. And here is the key point: it led to a 94% increase in year-on-year sales.
That said, AR is also heavily leveraged outside of the FMCG industry. Louis Vuitton is an example of augmented reality shopping at its finest. The French luxury brand made headlines by partnering with Snapchat to create a 360 brand installation. By scanning the brand’s legendary monogram, users are taken to a virtual store that features both the newest styles, as well as iconic pieces – all available for sale.
Burberry has also decided to explore the potential of AR by collaborating with Snapchat, however in a slightly different manner. Namely, they’ve decided to create a mobile phone game, where users can dress up their avatars in the newest pieces from the TB Summer Monogram collection and compete with their friends in a surfing tournament.
As you can see, the possibilities for engaging customers through AR are limited only by the imagination.
Should your brand invest in Augmented Reality?
The obvious answer is yes. There are multiple benefits associated with Augmented Reality shopping. Brands that take advantage of AR experience a higher conversion rate. According to Spotify’s research, engaging with products that include AR elements has a 94% higher conversion rate than those without AR. Secondly, as it serves as a means of engaging your client base, it can result in significant savings for your brand. Specifically, customer acquisition has proven to be up to 7x as expensive as client retention, so keeping existing customers engaged makes good financial sense. Finally – and perhaps, even most importantly – 71% of consumers say they would shop more often if presented with an AR experience.
However, as with any other exciting technology, form must not triumph over content. A well-thought-out strategy and clear business objectives should stand behind the decision to implement AR. A good thing – and perhaps a surprising one – is that Augmented Reality can be developed fairly easily with the support of the previously mentioned frameworks from Apple and Google. There is also no limit in terms of which categories can use this solution. While FMCG’s can use AR for more interactive product content, home and personal electronics can benefit from product visualization. Opel proved the versatility of this technology with their new Mokka debut – an AR filter on Facebook and Instagram Stories was used to superimpose the car model indoors or outdoors. In the pandemic, it was a very innovative product launch, aimed at creating brand awareness while taking full advantage of user generated content.
We’re still in the midst of the pandemic fight. But eventually, physical stores will fully reopen, making hygiene and safety one of the top priorities. This is where AR comes in handy. To cater to the safety of their customers, Sephora and Ultra don’t allow consumers to test products in-store. Instead, they invite their shoppers to digitally try the products using their AR solutions such as GLAMlab, a virtual try-on tool launched by Ultra four years ago. Since the start of the pandemic, its engagement has increased by 700%, with over 50 million shades of foundation tested digitally. Safety is yet another reason why it’s worth investing in AR, which is here to stay even after the pandemic ends.
With the advancements we’ve seen in the past few years, it is now apparent that AR no longer belongs solely to the world of science fiction films. It’s already part of our reality, and is being successfully used to get attention, provide information and content, and – most importantly – generate and increase sales.
And while we are now witnessing its early stages, the history of technology, the internet, and eCommerce have all shown that this is precisely the type of novelty that often moves at an amazing speed. With all this in mind, it does indeed seem that the time for implementing AR is now.