Augmented reality (AR) is one of the hottest technologies in the marketplace today. With the recent release of Apple’s ARKit and Google’s ARCore (developer frameworks for AR applications for Apple and Google, respectively), consumers will be exposed to an ever increasing variety of AR in the coming months. These experiences will fall across a wide range of domains, from interactive games and entertainment to household utilities such as virtual tape measures, and retail will be no exception. We expect retailers will employ AR to deliver fun and engaging new ways for consumers to shop, while addressing key limitations of the traditional digital commerce experience.
When we refer to AR in the retail context, we mean leveraging the capabilities of a modern phone (or tablet) to see a version of the real world into which virtual items can be placed. This allows the consumer to evaluate items in the context and constraints within which they will ultimately be situated — for example, a couch can be seen in the consumer’s living room. Today’s AR technology allows the consumer to see the item from any angle, with realistic scale, shadows, and lighting. By integrating the new AR experiences with existing e-commerce capabilities, consumers will be able to easily find, evaluate, and purchase items with greater confidence that the items will meet their needs.
What about VR?
When discussing AR, Virtual Reality (VR) is often included in the conversation. While VR will surely gain broad adoption in the future, we don’t see it impacting retail in a meaningful way today or in the near term. In particular, the need for specialized hardware (i.e., a VR headset) makes VR less likely to gain significant marketplace traction outside of specific realms such as gaming for the time being. AR, on the other hand, is easily accessible on modern smartphones with no additional hardware and is poised for broad adoption.
Shiny new toy or valuable new capability?
As with any emerging technology, AR can be seen as a shiny new toy. As such, there is the risk that its applications will be trivial: neat and glossy but with no real consumer value. While there will surely be many deployments of AR in the retail space that don’t solve a specific business or customer problem, there is also no shortage of very real opportunities to make the digital shopping experience more convenient, more engaging, and more effective with AR.
Even before the arrival of the modern AR capabilities from Apple and Google, AR experiences have already brought value to retail. For example, Sephora had great success with their Virtual Artist, a capability in their mobile app that lets customers try on different shades of lipstick. This is more than just an interesting application of AR technology — it actually solves a real customer problem efficiently. It is much easier to try on a bunch of different colors virtually without leaving home than to go to the store and try them all on. And, importantly, the Sephora app is fun and engaging for the shopper. Another example of a good retail application of AR is from Home Depot, whose app allows the shopper to see what different front door styles would look like on their house. By leveraging the modern AR frameworks, IKEA has taken this general concept even further, allowing customers to realistically visualize furniture in their rooms.
These examples are illustrative of the general benefits of AR in retail: they allow a consumer to see how a product will look in their setting, without needing to find the physical product, buy it, and bring it home. In the case of makeup, it allows the customer to quickly try many different colors; in the case of doors and windows, it allows the customer to see the item in situ, without the effort of installation. AR can be useful when it is critical that the item “fit” in a space, either physically, in terms of size (for example, when selecting furniture), or visually, in terms of aesthetics (for example, when selecting artwork or floral arrangements).
When retailers consider AR functionality, it is critical that they consider the specific problems that AR will solve in their customer’s shopping journey. Will it allow the customer to “take home” a large or heavy product to assess how it will fit in their space? Will it help the customer envision how something will look, in terms of color or scale? Will it allow a customer to try several variations or alternatives of an item more quickly than trying the product in real life? These are the types of retail experiences that AR is best suited to, and, if delivered well, will drive conversion, reduce returns, and increase customer loyalty. On the other hand, if the AR capability is not helping the customer in some way, it may not be appropriate to include it in a retail experience.
As noted above, the AR experience needs to be implemented well. This means delivering photorealistic content with smooth motion, realistic lighting and shadows, and a great user interface. In the future, we expect to be able to deliver high quality AR experiences in the mobile web browser, but today the AR experience needs to be delivered via native app, likely leveraging ARKit and ARCode. It is also critical that the AR experience be seamlessly integrated with the retailer’s e-commerce functionality. This means making it easy to enter the AR experience from within the online store, to select and evaluate items within the AR, and then easily transition to checkout. AR cannot be a stand-alone experience, disjointed from the shopping path.
AR will bring new and exciting experiences to retail. These experiences will be engaging and easy to use. Retailers that deliver high quality experiences that solve actual customer problems will realize the benefits ranging from increased conversion to reduced returns to greater customer satisfaction and loyalty. 2018 will be an exciting year as we see how creative and impactful these new experiences can be.