Augmented reality in retail

19. December 2023, MAXFIVE

Augmented reality (AR) is opening up exciting new opportunities for the retail industry in all kinds of areas, from customer engagement and customer satisfaction to brand loyalty.


augmented reality

Future technology – not just another trend

Augmented reality has been an everyday reality for many people for years: just think back to when the bunny ears and make-up photo filters first took Instagram, Snapchat and so on by storm. AR’s ability to insert digital objects into the real world is undisputed, but is it all just a nice gimmick – or could there be more to it than that? We think that it’s worth taking a look at the technology in a retail context and have already developed effective AR concepts and bespoke AR experiences for our customers too.

As far as realism is concerned, AR output has come along in leaps and bounds over the last few years – and the new possibilities now look like they are ready to hit mainstream retail. Or, as AR pioneer Snapchat puts it: “It’s time for an augmentality shift”. Consumers are also drawn to the new possibilities: in one recent Google study, two thirds of respondents indicated that they would be interested in using AR to help them with their shopping. And according to an Ipsos study, shopping is actually the number one reason for using AR.

The advantages are plain to see

The power of augmented reality is obvious in a wide range of areas, from customer satisfaction, accessibility and promotion to customer engagement and strengthening brand value.

AR can also take the aggravation out of certain situations – such as trying on dozens of items of clothing without having to keep moving back and forth between the changing rooms and the sales area. It can display additional information that gives consumers a helping hand when it comes to making purchasing decisions or finding their way around stores and locating specific products. And that’s before we even get to how they can be used to entertain and engage consumers while building lasting loyalty. Used the right way, AR technology stands to benefit nearly all retailers – whether they’re online or operating bricks-and-mortar stores.

Broad spectrum of AR applications in online and in-person retail

1. Interactive product catalogues, flyers and promos

AR-supported product catalogues let consumers look at interactive 3D models or animations of the products featured inside. The IKEA Place app, to quote one example, helps you to work out in advance which pieces of furniture represent the best fit for your home: with AR’s help, 3D digital models of the products can be inserted into the real-life environment and moved around, which makes it significantly easier for customers to set up and arrange spaces. Amazon offers a similar AR service for lots of its furniture items. MAXFIVE also creates interactive product catalogues, flyers and promos for its customers, featuring a host of AR elements designed to bring products to life.

2. Trying things on and trying things out online

Companies like Zara and Nike are already winning legions of fans through prototype AR systems that allow customers to try on clothes using their own virtual avatar and their smartphone camera.

Meanwhile, businesses such as New Balance and Gucci have even collaborated directly with Snapchat and Instagram on similar applications to work on ways of integrating bespoke company-specific photo filters that add their footwear, headwear and eyewear into the social media apps. Anyone who likes what they see can click on a link to access the respective brand’s shopping page directly from Snapchat or Instagram. Dior is among the other big names to offer AR services like this, only this time all in their own app.

Leaving the fashion industry behind for a moment, L’Oreal has established AR services that let customers see what different types of make-up and hair dyes look like by applying them to their own image digitally.

3. Trying on and trying out in bricks-and-mortar stores

In-person retail definitely has a huge part to play in all of this, however – according to one study conducted by Google, both Gen Y and Gen Z make more than a third of their purchases in-store. AR also has the potential to simplify the in-person shopping experience. AR mirrors – another technology that has come a long way in recent years – are a case in point in this regard. A kind of static screen, they feature an integrated camera, which customers can stand in front of in the shop as they try on clothes using a virtual image of themselves. Nike and Tommy Hilfiger have been road testing AR mirrors over the course of the past year.

But why are all of these AR services still largely limited to shoes, hats and other similar accessories? Well, it’s all down to the limitations of the technology: while it has definitely improved enormously, it still isn’t possible to determine exact fits for other garments using AR quite yet. But “yet” is definitely the operative word here, as the technology is constantly evolving. What AR mirrors can do is build customer engagement through their novelty value and interactive appeal.

4. Barrier-free shopping and easy navigation

Seek and ye shall find – thanks to AR. A number of retailers, including US DIY chain Lowe’s, have been trialling app-based navigation systems that employ AR to help customers find their way around their stores and zero in on specific product ranges. Customers capture their in-store location using the camera on their smartphone before the navigation system appears on screen as an overlay, pointing them in the direction of the desired product. For people with visual impairments, spoken word output – in different languages if needs be – can also be integrated into the product search process.

5. Playful Stores with AR

Even if AR services are not ready to do away with traditional fitting rooms quite yet, they are already starting to come into their own for bricks-and-mortar retailers in other areas. One thing they lend themselves to particularly well is experiential retail or playful store concepts, which offer customers the kind of unique experiences that online retail cannot compete with.

And it was with this in mind that Nike decided to gamify its AR mirrors in New York: not only allowing consumers to try out products in mini-games, but giving them a shot at earning discounts in the process. In reality, the game prototype turned out to be so popular that huge queues formed inside the store – a loyalty campaign that accomplished exactly what it set out to do . Tommy Hilfiger’s AR experience adds colourful, animated effects to a shoppers’ own images.

These positive experiences and associations not only help with short-term consumer engagement, but also lay a firm foundation for lasting brand loyalty. And a not inconsiderable by-product is that AR experiences like these tend to get shared on social media. According to a Snapchat study, a third of American consumers would go out of their way to visit a shop if it had an attractive, exciting AR offering.

6. Experiential retail at home, too

Even on a smaller scale that does not involve tech like AR mirrors, augmented reality still has a lot to offer consumers. Lego has found a way to create virtual smartphone race tracks for cars built using its products. Your custom-built vehicle is scanned using a mobile phone camera and then inserted into the on-screen virtual track.

Even the most minor of AR interventions can quickly grab the attention and trigger positive associations: e.g. a scannable Christmas card that launches a mini digital projection on a smartphone phone screen. MAXFIVE also has Christmas cards with integrated AR experiences, where small virtual worlds are brought to life simply by scanning them on a mobile phone.

The bottom line

There are so many different ways that augmented reality can be used in retail. By integrating digital objects into the real world, AR opens up a more exciting, simpler and more interactive shopping experience: from 3D product catalogues and digital clothing try-ons to gamified playful stores and scaled-down AR experiences for the home. Besides having the potential to encourage spur-of-the-moment purchasing decisions, AR is a good way to foster enduring customer satisfaction and enhance brand loyalty.

MAXFIVE provides a full AR consultancy service that covers everything from the design of the user journey to the final playout, and also creates fascinating content for customers. So it’s well and truly time to bring about an augmentality shift for the retail sector!

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