Augmented reality (AR) technology is transforming the retail industry. By offering an immersive shopping experience for customers. It is a technology that overlays digital information on the physical world. By opening up doors to virtual experience to the customers in the real world. Retailers are looking forward to embracing the benefits it offers to their business. This article explores the benefits and challenges of implementing augmented reality in retail shopping. Along with the impact it has on the customer shopping experience.
Table of contents
- What is Augmented Reality in Retail Shopping?
- Impact of Augmented Reality in Retail
- Examples of Augmented Reality
- Challenges Faced By AR in Retail Shopping
- Augmented Reality Shopping: Benefits
- Use Cases of Augmented Reality Shopping
- Future of Shopping Relies on Augmented Reality
What is Augmented Reality in Retail Shopping?
The pandemic has led to an increase in customer expectations. Prompting brands to adapt to the new multi-channel environment both online and offline. As a result, they have had to develop new strategies in both physical and e-commerce stores to improve customer satisfaction. Recent surveys show that customers value their shopping experience as much as the product. They are even willing to pay more for value-added services.
Augmented reality presents an ideal opportunity for brands to stay competitive. Mainly by providing a unique and interactive experience. By merging real and virtual elements, this technology allows customers to interact with the brand. Try out products, and even shop without having to visit a physical store. Augmented reality can be used in a variety of ways. Including interactive games and providing directions, prices, and features.
Impact of Augmented Reality in Retail
The integration of augmented reality in the retail industry is transforming the process of product discovery and purchase. Leading to a shift in consumer behavior. As a result, it has emerged as a valuable tool that differentiates brands from their competitors. Previously, limitations such as insufficient stock, lack of instruction manuals, or the inability to test products at home hindered the purchasing process. However, AR has revolutionized the shopping experience. By enabling users to assemble products with ease and visualize them in their personal space. Eliminating all such obstacles.
Examples of Augmented Reality
Augmented reality has revolutionized the retail industry. Particularly through the use of virtual testers. With the advent of Web AR, consumers can try products from anywhere. Eliminating the need to visit a physical store. Numerous renowned brands across different sectors have already incorporated AR into their value chain. To enhance the user experience.
For instance, eyewear retailers like Warby Parker and General Óptica. High jewelry firm Diamond Hedge, and cosmetics company Sephora. They offer customers the ability to try on products from the comfort of their homes. Additionally, augmented reality is being utilized to provide valuable information to users. As some companies are offering engaging experiences through product packaging. These provide information even before the product is opened.
Challenges Faced By AR in Retail Shopping
Cost of Implementation
Cost is often a major concern for people considering implementing AR technology in retail stores. The cost of implementing AR can vary depending on the complexity of the project and the level of customization required.
Customizing an existing app or using a pre-built AR platform may be a more cost-effective option. While building a custom app from scratch with unique components could cost more. As an example, IKEA’s AR-powered app is a customized solution. It allows customers to display furniture in their homes before making a purchase. The exact cost of development is unknown. Analysts estimate that it could have cost anywhere from $30,000 to $60,000. Based on market rates for AR app development.
Lack of Talent and Expertise
In addition to cost, another challenge is the lack of talent and expertise in AR technology. AR is a relatively new technology. There may not be enough skilled personnel. With expertise in developing augmented reality applications in the retail industry. Firms may need to invest in training and development to build the necessary talent pool to implement AR technology.
Another challenge is the ability to build AR filters and narratives. AR technology requires the creation of compelling narratives and filters. That can engage customers and enhance their experience. This requires a certain level of creativity and expertise, which may not be available in all organizations.
Latency Issues and Lack of Resources
Latency issues can also pose a challenge in AR implementation. The technology requires real-time processing and rendering of AR objects. It can be affected by network latency and device capabilities. Retail stores may need to invest in high-speed network infrastructure and devices. This will reduce latency and enhance the AR experience.
Lack of adequate resources is another challenge in AR implementation. Since the technology requires a significant amount of resources, including computing power, storage, and bandwidth. Firms may need to invest in additional resources to support AR implementation.
Augmented Reality Shopping: Benefits
Augmented Reality (AR) is a technology that overlays digital content on top of the real world. Creating a hybrid environment that merges the physical and digital worlds. In the retail industry, AR is increasingly being used to provide customers with an interactive and immersive shopping experience. One that allows them to visualize products in their own space. For example, trying on clothing virtually, and getting a better sense of the size, shape, and features of products. This technology offers numerous benefits to retailers, and here are some of the most significant ones.
Increases Conversion and Sales
Augmented reality (AR) can boost your sales significantly. As per Shopify’s report, businesses that incorporated AR into their products witnessed a surge of approximately 250% in retail conversion rates. This is attributed to the fact that AR allows customers to visualize products in their homes or try on clothes, leading to a better purchase decision. Adi Tatarko, the CEO of Houzz, also corroborates this claim, stating that customers who engaged with AR on their app spent 2.7 times more time on the platform and made 11 times more purchases.
AR Helps Sell More Expensive Products
Augmented reality can facilitate the sale of less popular and more expensive products. Typically, such products cater to a niche audience due to their high price point and limited popularity. However, AR has the potential to expand the customer base for these products by offering a more immersive and engaging buying experience. Customers can use AR to interact with the products. It enhances their confidence in making a purchase decision. Consequently, vendors can leverage AR technology to boost demand for niche or premium products. By reducing the customers’ hesitation towards unfamiliar product categories.
AR Attracts New Clients
Augmented Reality (AR) technology offers a way to engage with a wider audience and attract new customers, especially during times of restrictions and limitations due to factors such as the pandemic, geographical location, or physical disability. By leveraging AR-based applications, businesses can provide customers with a unique and immersive shopping experience that transcends physical boundaries and limitations, allowing them to access necessary goods and services from the comfort of their own homes.
Augmented Reality (AR) empowers customers to virtually try on products before making a purchase, providing them with a realistic representation of how the product will look in their home or office environment. Whether they shop online or offline, AR significantly streamlines the customer journey, leading to increased store conversions.
Moreover, AR technology reduces the likelihood of customers returning products by enabling them to make more informed purchase decisions. Based on how the products fit and look on them. This feature benefits both online and brick-and-mortar stores, reducing the cost and hassle associated with processing returns.
Solves Hygiene Issues
In the current social climate, customers are highly concerned about germs and the need for social distancing. This resulted in increased online sales as a way to mitigate the risk of cross-contamination. At-home AR shopping experiences offer a highly realistic and immersive shopping experience that is comparable to in-store shopping. Providing customers with a more comfortable shopping option during stay-at-home orders.
Additionally, in-store AR technology reduces the need for customers to physically handle and touch products. This includes features like “Try On” and “Try Out,” reducing the risk of germs spreading. Overall, AR technology presents an effective solution to address hygiene concerns that are at the forefront of customers’ minds.
Content For Social Media
Integrating Augmented Reality (AR) into e-commerce can serve as a pre-made digital marketing campaign. By allowing customers to virtually try on products instead of relying on static product images in online ads. This experiential marketing approach enhances customer engagement and provides a more interactive and engaging shopping experience.
The fun and interactive nature of AR technology increases the likelihood of customers sharing their experience on social media platforms. They transform them into brand advocates and expand the reach of the marketing campaign. Overall, AR technology can revolutionize e-commerce marketing and enhance brand awareness and customer loyalty.
Enhances Employee Skills
AR can also be used to enhance employee training and improve their product knowledge. By using AR, employees can visualize and interact with products in a 3D environment. Allowing them to gain a better understanding of the benefits, and use cases. This can help employees provide more accurate and informed product recommendations to customers, leading to higher sales volumes and increased customer satisfaction.
Improves Supply Chain Management
AR can also help retailers improve their supply chain management. This will be achieved by reducing inventory costs and minimizing the risk of overstocking or understocking. Ideally by using AR to visualize products in 3D and simulate their placement in stores. Retailers can optimize their inventory levels and reduce the number of out-of-stock products. This can lead to improved operational efficiency and reduced costs.
Use Cases of Augmented Reality Shopping
Augmented reality (AR) has become increasingly popular in the retail industry as it provides an immersive and interactive experience for customers. By creating an AR store, businesses can offer customers a unique way to interact with their products. It can help move them along the sales funnel and ultimately increase sales.
With AR technology, customers can try on different products virtually. Such as clothes, shoes, and makeup, without actually having to physically visit the store. This allows customers to see how the products look on them and how they fit. This can help them make more informed purchase decisions. Additionally, AR can help customers visualize how the products will look in different settings, such as their home or office, which can help them imagine how the product will fit into their life.
L’Oreal’s Makeup Genius app is an excellent application of AR in marketing. By using the app, customers can virtually try on L’Oreal’s makeup products, allowing them to see how the makeup will look on their face before making a purchase. The app uses facial recognition technology to create a realistic image of the customer’s face, and then applies L’Oreal’s makeup products to the image. Customers can then try out different shades of lipstick, eyeshadow, and other makeup products to see how they look in real-time.
Product Information in Stores
The rise of smartphones has changed the way customers shop, and many now use their phones to research products and compare prices while they are in-store. AR technology can help fill the information gap that customers face in-store. By providing them with the information they need to make informed purchase decisions.
Using AR, retail stores can provide customers with a range of information. Such as product descriptions, pricing, customer reviews, and even sizing information. By scanning in-store signs with their smartphones, customers can access this information. Making more informed purchase decisions.
The American Apparel AR app is a great example of how AR can be used to provide customers with product information in-store. By scanning signs in the store, customers can access information on the product. Including reviews, pricing, and color options.
Building Brand Awareness
Augmented reality (AR) is indeed a powerful tool in building brand awareness. The handy technology allows brands to create interactive experiences for their customers. Making their advertising campaigns more engaging and memorable.
One of the main benefits of using AR in brand marketing is that it helps brands stand out from the crowd. By incorporating AR into their advertising materials, brands can create more compelling experiences for their customers. It can help them capture their attention. In turn, building a stronger emotional connection with their target audience.
AR also provides an opportunity for brands to create more shareable content, as customers are more likely to share their experiences on social media platforms. This can help increase the reach and visibility of a brand’s message, and can also help generate more buzz and word-of-mouth marketing.
Virtual Fitting Rooms
For many shoppers, fitting rooms are a nightmare, especially during busy seasons. In some cases, customers prefer online shopping, buy an item and try it at home only to return it due to a poor fit. Other times, they might choose not to buy because of the hassle lining up to use the fitting room.
The augmented reality shopping experience can solve this problem. By incorporating virtual mirrors in retail, customers can see how outfits look on their bodies. Timberland is an excellent example of a brand that offers virtual fitting rooms where customers can try out outfits for their collections without wearing them.
Product Guides in 3D
AR technology is the perfect tool for enhancing the customer experience even after a purchase has been made. Traditional 2D manuals can be difficult to understand. Often failing to provide customers with a comprehensive understanding of a product’s features and functionality.
By leveraging AR technology, companies can create interactive 3D product guides. Allowing customers to visualize and interact with products in a way that is much more engaging. This can help customers troubleshoot issues more effectively. Gaining a deeper understanding of the product’s capabilities and features.
Providing a great customer experience throughout the entire customer journey can help companies build stronger relationships with their customers. Increasing customer satisfaction, and ultimately boosting customer loyalty.
Navigating Retail With AR
AR technology is going to be a game-changer in brick-and-mortar retail as well. In large stores like supermarkets and department stores. It can be challenging for customers to find the products they are looking for quickly. Leading to frustration and decreased satisfaction.
By using AR-powered tools, retailers can provide real-time navigation assistance to customers. AR markers placed throughout the store can be scanned by customers. Enabling them to get real-time directions to their desired products and departments. As well as suggested routes for optimal efficiency.
Major retailers like Target and Home Depot have already implemented AR-powered navigation tools. This is to improve the in-store shopping experience for their customers. By reducing the time spent searching for products, these tools can help customers have a more enjoyable shopping experience.
Future of Shopping Relies on Augmented Reality
The COVID-19 pandemic has accelerated the need for retailers to adopt new technologies like AR. This provides consumers with a safe and engaging shopping experience. With more people shopping online and a growing demand for contactless interactions, AR can be the answer. It helps retailers bridge the gap between the physical and digital shopping experience. Enabling consumers to make informed decisions about their purchases.
In short, AR can be a great way to engage with customers and provide them with an interactive shopping experience. It can be used to showcase products in a unique and exciting way. Allowing customers to communicate with them before making a purchase. This can lead to an increase in sales, especially for products that are less popular, less mainstream, or more expensive.
So there you have it, an immersive guide on the futuristic world of AR and its applications. We did our best to list down possible challenges, use cases and benefits to help our audience comprehend the futuristic technology. Feel free to reach out if you have any queries, we would love to answer.