Augmented Reality Transforming Retail

Nobody could have missed the mind blowing projections for Augmented Reality (AR) and Virtual Reality (VR), ranging from revenues of $120 bn at most conservative to $182 bn by 2020 or the hoo-ha around AR and VR device releases this year. Nor will the countless examples of AR and VR transforming how brands and businesses connect with customers and have gone unnoticed.

What we’re witnessing is the shift to AR and VR as the next computing platform. This was echoed at Facebook’s F8 conference earlier this week where Zuckerberg indicated that virtual reality and augmented reality are the next most important platforms and feature squarely in the company’s 10 year plan. As we’ve seen with earlier platform shifts to the PC and smartphone, new markets are being created and existing markets disrupted.

Nowhere is the transformative power of AR and VR more keenly felt than in sectors like retail. Today, AR in particular (where there’s no need for any headsets), although a nascent industry, is proving to be key to winning in the omni-channel retail market.

Constant Connectivity

Our media landscape has shifted hugely over the last few years. Mobilisation has impacted every sector from healthcare to retail and education. People are connected almost 100% of the time so that there is no longer any ‘offline’. The mobile device has become almost an extension of the self and the centre of how we access and consume information. With AR and VR at the heart of a new generation of consumer devices from LG and Sony to Samsung, this behaviour is here now!


As the way we interact with our mobiles evolves, so too do our expectations and consumers increasingly expect seamless, relevant experiences and content at every key moment. As a result, it’s more critical than ever for brands and businesses to share relevant content and experiences at every stage of the customer journey. Failing to meet consumer expectations and needs at any given stage in the journey results in leakage felt by retailers as falling store footfall and a growing share in consumer spending captured by e-commerce pure plays.
So, how do you ensure relevant and seamless experiences throughout the customer journey to reduce leakage?




Augmented Reality: Connecting the Physical and Digital World

Being seamless and relevant for consumers who are always connected is about bridging the physical and digital world. AR achieves this by turning physical products into digital channels that deliver relevant content and experiences just by scanning items with a smartphone. Where physical products range from packaging and print ads to actual products. For example, products and packaging can be scanned to provide in-depth product information and bonus content or facilitate virtual trial so consumers can see what products would look like in the home or on themselves. POS material and shelf wobblers can trigger personalised discounts and rewards and print ads and catalogues can be made shoppable to capture on-demand purchase intent.


Simply by activating those physical touchpoints, AR can help mobile play an important role as a shopping engine, not just a conversion engine and brands can benefit from deeper customer engagement and facilitated path to purchase. AR is thus proving to be key to winning in an omni-channel market and major leading brands across multiple sectors, including retail, have grasped this and are already leading AR programmes.

Core to a Competitive Marketing Programme

Brands are realising that AR is no longer a gimmick; it has the potential to deliver incredible ROI. The world’s largest home improvement retailer, Home Depot saw mobile commerce sales quadruple after integrating augmented reality into their store app. L’Oreal’s Make-Up Genius app, that allows users to scan their own features, browse a catalogue or actual products in-store and then virtually apply makeup before making a purchase, has seen multi-million downloads and subsequent interactions. IKEA uses AR content to enhance its catalogue, seamlessly combining print and digital content in one of the largest scale roll-outs of this type, across 60 countries worldwide. Yihaodian, one of the largest grocery retailers in China (Walmart-owned) has successfully trialled ‘virtual stores’ using AR, driving a 130% increase in e-commerce sales. The retailer now plans to roll out the concept across China. AR clearly represents a huge opportunity and increasingly it’s becoming core to a competitive marketing programme.




In summary, retailers need to support new ways to buy and experience and clearly augmented reality is a very powerful way to do this. What may have been an innovation gimmick five years ago is today, with the selection of the right technology provider, optimal AR strategy and quality implementation, demonstrating proven ROI. Across retail and other sectors, we’re seeing our customers succeed using AR. It’s crossed the threshold into usefulness and can provide meaningful decision support in the path to purchase that can differentiate a retailer, driving app downloads, increasing mobile engagement, encouraging positive brand sentiment and increasing sales.
Get in touch if you would like to find out how AR and VR could drive growth and competitive advantage for your business.