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AR Shopping – The Digital Transformation of Retail in 2020

A streamlined, comprehensive shopping experience is important, especially during this Age of Technology

Daniel Newman talked about the Top 5 Digital Transformation Trends In Retail For 2020 in Forbes, and elaborating on the importance of augmented reality, ease of purchase, ease of information retrieval, social shopping, and giving consumers an immersive shopping experience with the integration of the virtual and real world. In this article, we focus on the importance of the AR shopping experience and explore how it is changing retail as we know.

In this current technological era, many corporate brands are starting to integrate their online and offline businesses. Through the shaping of these experiential marketing, allowing consumers to “feel” the products as if they are shopping physically, being with the consumers during their whole shopping journey, strengthening corporate brand values, and creating a better consumer experience is something that all brands need to look into.

Table of Contents

AR for Retail | How did AR become a turning point for the retail industry?

AR technology is advantageous in its ability to allow ease of visualisation. This refers to the various visual effects that superimpose virtual objects and information in the real world surrounding us. The virtual components on the screen of our mobile devices or tablets are integrated into the real world, showing us information such as instruction operations, and allowing for dynamic interactions with these virtual objects. We previously talked about how AR is integrated in various industries, such as: advertising, marketing, art, events, commercial, navigation, and many others, with many successful cases showing how these technologies have been successfully incorporated in the market. The applications are diverse, and the possibilities are endless. The overall industry is booming, and it doesn’t seem to be stopping anytime soon. More so now, where consumers are putting more emphasis on the retail experience, in addition to the quality of products and the marketing. AR is especially effective in creating a memorable shopping experience.

AR allows consumers to more effectively understand the products. Companies such as Target, Lowe’s, and Amazon, have found that AR technology can reduce the number of consumer returns for online purchases, which greatly helps in sales. Interactions Consumer Experience Marketing who specialise in retail research have noted in their 2016 article, that 77% of consumers want to see different product features such as colour, material, or style, through AR; 65% of consumers want to obtain product information using AR; 55% of consumers think that AR makes the shopping experience fun and memorable.

(Image Source: Interactions Consumer Experience Marketing)

AR for Retail | How do retail brands get into the AR experience

According to Gartner, there will be 100 million consumers using AR for both online and offline shopping by 2020. When thinking of how to design an AR experience, retail brands should fully consider factors from the consumers’ perceptions, to them exploring different products, to choosing a product, then making the purchase, and even cater for factors such as after-sales services, advertising and marketing, as well as repurchasing. The entire shopping experience may range from person to person, therefore it is important to consider an experience that can cater to the general public.

Presently, the retail industry sees more AR use in two main sectors, namely: products applications, as well as marketing and advertising. Retail brands and retailers rely on the addition of AR to create a more immersive shopping experience, enhanced by the wonders of AR technology.

1. Advertising and Marketing: Attracting consumers’ interest

With the rise of the new age of retail, comes changes in the consumers’ shopping behaviours. Many online retailers nowadays have been looking into opening physical stores. Physical stores, contrary to popular beliefs, should not be considered as competitors of online stores. They are important in the transformation of the digital age of retail, using physical stores to add another layer of experience, providing a unique shopping trip for the consumers.

In February 2019, Nike collaborated with Snapchat to create a unique AR experience for their consumers at The Foot Locker store in Hollywood, Los Angeles. The Lebron James mural on the store wall comes to life through AR lenses, and scores a slam dunk. This experience went viral on Twitter, with over 1.25 million views.

Apart from that, Burger King’s viral ad campaign – Burn that Ad – which we previously talked about in our article “AR Advertising – The Future, or a Gimmick?” is an interesting application of AR technology in advertising and branding. 

2. Commercial Application: Try before you buy

AR is heavily integrated in commercial products, mainly in hopes to help the consumers make more decisive decisions when shopping online. Currently, the most common theme is the use of AR in furniture and home décor shopping, as the main consideration for online shopping is how accurate the sizing of the items are, and whether or not the style and materials will suit and complement the current environment.  Through the use of AR, consumers can visualise and more accurately gauge how the furniture or décor fits in their homes.

Toyota also launched an AR application for car buyers to place the vehicles in any environment, such as their driveway or garage, or even their living rooms, allowing them to look at the cars from any angle without having to be at the showrooms. Using their mobile devices, consumers can zoom in and out, and rotate the vehicles to clearly observe each minute detail. 

LEGO has often used AR to engage with their consumers back in the days, and have amped up their AR present more now, as there are many screens everywhere in stores. As long as consumers pick up the LEGO box and scan the box exterior, they can view a 3D model of the toys inside, giving them a better idea of what they will be building.

AR for Retail | Why should retailers take the leap

The global market for AR and VR retail sales is predicted to reach USD $1.6 billion by 2025, and retail brands in the future are bound to adopt current technology in their business strategies. Furthermore, content has always been the core of the experiential shopping experience, thus the branding and promotion of retail brands are no longer limited to traditional marketing channels. The integration of online and offline channels offer better advantage to retailers, allowing them to target a wider reach of consumers. Through setting AR interactions at specific points in time to convey and tell the story of retail brands, this attracts and captures the attention of consumers, providing them valuable information that they resonate with, building trust and loyalty towards the brand, triggering positive associations in the long run.

According to Zion Market Research, the global AR market is expected to grow to USD $133 billion by 2021. As AR is effective in integrating the virtual and real world during the entirety of the shopping process, it not only provides entertainment, but is also adds functionality.

With the enhancement of AR hardware functions in new generations of mobile phones, the application of AR technologies are expected to grow with this demand, thus you may see more varying types of AR interactions in the market. From the perspective of retail applications, it has grown from its original days of AR product catalogues. Looking at the samples we mentioned previously, it has advanced to incorporate AR product trials, where consumers can “try” and more accurately find suitable products for themselves, leveraging on technology to complement physical stores and provide a more personalised shopping experience for consumers, stimulating their purchasing decisions.

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