Augmented reality in retail: The second coming

More accessible, more capable

In a 2021 Deloitte and Snapchat study, 74% of global consumers said they anticipated AR to become more important in their lives over the next five years. We’re now right in the middle of that period, and the signs suggest it was a prescient survey.

Cassandra Napoli, senior strategist at WGSN Insight, says: “From socialising and shopping to education and entertainment, AR applications are truly endless for brands, especially when it comes to commerce.

“While AR is certainly not new, brands have only recently started unlocking its true potential as a marketing and commerce tool that can completely redefine the consumer experience. In the last few years, consumers have grown more comfortable with the technology thanks to the ubiquity of social media filters which offer entertainment.

“In the years ahead, though, AR could become even more central to our communication and consumption habits, and so we should anticipate a future with more AR ad space and AR try-on tools,” she says.

The unlocking of the potential of AR comes as the capability and accessibility of the technology improves. “AR technology has advanced significantly in recent years, making it more accessible for businesses including retailers,” says Hornby. “Increased adoption of mobile devices with advanced cameras and sensors has also made it possible for more people to experience AR in their daily lives, and it will likely become a basic expectation of digital customer experience in the future.”

He adds: “More stable and easy-to-use software development kits have made it simpler for developers to create engaging AR experiences that delight customers and improve engagement and satisfaction. Advancements in technology have also made it quicker, easier and cheaper to produce the 3D assets required to offer an immersive AR experience at scale.”

The Very digital customer experience boss also talks up the proliferation of tech partners in the space as a contributing factor to AR’s rise in prominence.

Stephen Hewett, future retail leader at Frog, a division of Capgemini, agrees, saying the underlying maturing of other technologies has helped AR, with hardware now able to run it with “better quality and accuracy”. The fact it is in the hands of more people now will trigger greater adoption, he argues.

Capgemini teamed up with magazine The Drum and internet of things agency SharpEnd before the pandemic to open a concept store in East London, where the latest technologies are tried out in front of consumers. The “Cornershop – store of tomorrow” concept, in Shoreditch, has trialled different AR deployments.

“We tested AR with a functional purpose – we asked ourselves, ‘can we signpost people to products that are compatible with their purpose goals?’ and the response was overwhelming,” says Hewett, adding that consumers saw it as a way to simplify shopping.

Friction busting

When Very first introduced AR into the customer experience back in 2016, people could see how a sofa would look in their own home. Ikea – through its Ikea Place app – and other furniture retailers have gained traction with this type of deployment, too.

Hornby acknowledges engagement was low in the mid-2010s, “as AR tech wasn’t yet widely adopted and having to access the model via a separate third-party app created too much friction in the customer journey”.

“Today, we can natively serve the AR experience within both our web and app journeys, allowing customers to seamlessly benefit from AR with the same level of ease as viewing a product image,” he says.

What is interesting about Very is that it sells so many different lines. It is effectively an online department store, so its experimentation with AR could provide inspiration for a wide array of other retailers.

“We believe that incorporating AR technology can significantly enhance our ability to create these differentiated experiences while improving key business metrics, such as conversion and return rates,” says Hornby.

“In fashion and sports, we’re exploring how we can use AR to increase size and fit confidence, while for home, it’s more about helping customers visualise how products will look in their own space. Toys is an interesting category as AR creates some brilliant opportunities to bring products to life and create new, immersive experiences for children.”

Convenience retail

Technology company Jisp is also increasing society’s exposure to AR, providing an app in the convenience retail space utilising the technology.

Nisa Retail, for example, has linked more than 50 of its stores to the Jisp Scan & Save app. The in-store digital voucher redemption system allows customers to save money on branded products by scanning barcodes at the shelf edge with the app.

A scan of the product generates an AR voucher, supported by tech partner Scandit. The voucher overlays what the consumer can see through their phone, making it seem like the voucher has jumped off the shelf edge – and consumers can tap to save it in their phone wallet.

Jisp has set up the service so that retailers can earn 2p every time a customer taps an AR voucher, and they receive a further 4p for every redemption at the point of sale. From a consumer perspective, 10p in loyalty points is earned every time they use a voucher – the whole system is designed to engender loyalty in convenience retail.

Greg Deacon, chief customer officer at Jisp, says: “It can be seen as gimmicky, but we have validated it because consumers say it adds to the shopping experience rather than hinders it.”

Through the convenience estate Jisp works in, there are around 6,000 weekly users of the app – and Deacon says 82% of those who download it are weekly users, which puts it on a par with some of the major grocery loyalty schemes in terms of percentage of users per download.

“When people use it and get the benefit of it, it’s sticky – and it’s great for maintaining loyalty,” he says. “I think we’re still seeing the experimentation of AR. The next iteration of it will involve using mobile to elevate the shopping experience pre-, post- or during a purchase.”

Customer benefits

Anna Barsby, who – as chief information officer of Halfords and Morrisons in recent years and now as founder of tech consultancy Tessiant – has seen several trends emerge and disappear, foresees real consumer benefits if AR meets its potential. She cites Amazon Salon, which opened its doors to the public in 2021 offering visitors a chance to view different hair colours via AR, as an indication of “the inevitability” of the technology’s arrival in the mainstream.

But there’s also a practical reason why retailers might wish to explore what AR can do for them, she says. Since e-commerce reached peak levels during the pandemic, the subsequent slowdown in online sales has taken some retailers by surprise, bringing into question the extent of e-commerce investment they made.

“AR is great idea – especially in pursuit of getting everyone back online and offering shoppers more value,” says Barsby. “And it would be brilliant as a consumer if that genuinely takes off.”