Augmented Reality in Retail Transforming the Industry

  • Published on : September 25, 2023

  • Read Time : 22 min

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Augmented Reality in Retail! A hot topic ruling over customers’ hearts and the bottom line of retailers.

Gone are the days when retail stores struggled to capture the attention and engagement of tech-savvy customers.

With AR, an immersive technology, online shoppers are experiencing hands-on retail demos with next-level personalization.

Augmented reality in retail refers to using digital overlays to allow customers to interact with products virtually. AR is a tech that mixes digital stuff with the real world. It lets people interact with and experience a cooler version of reality. By adding virtual images, info, or animations to what’s around us, AR makes things more interesting and useful.

You might have seen AR in apps like Snapchat, where funny filters are added to your face. Or you might have heard about Apple’s upcoming AR headset. However, the true game-changing experience lies in the integration of AR within the retail sector. AR in retail can make your online or physical store stand out. It changes the way consumers interact with brands both in the online and physical stores.

In this blog, we’ll look at the top benefits, challenges and how brands are making use of AR in retail. We’ll see how this cool tech can change how your customers shop.

AR Transforming Retail Shopping Experience

Retail is being revolutionized by Augmented Reality (AR), which improves the buying experience with interactive demos, virtual try-ons, and personalized recommendations. Gaining a competitive advantage, it increases revenue, engagement, and brand loyalty. Leading companies using AR to create engaging and entertaining customer experiences include Adidas, Nike, IKEA, and Sephora.

What are the benefits of using Augmented Reality in the Retail Industry?

Augmented Reality (AR) in retail enhances the shopping experience by offering interactive product demos, virtual try-ons, and personalized recommendations. It boosts brand loyalty, drives better engagement, increases sales, provides user content personalization, ensures a competitive advantage, and offers shareable, trackable content. AR also facilitates contactless experiences, minimizing hygiene concerns in the evolving retail landscape.

Augmented Reality (AR) has made a remarkable difference in the retail industry. It has provided easy ways of shopping for people who are engaged online as well as in stores. Here are the main advantages of using AR in retail that most people have noticed.

Augmented Reality in retail offers several benefits. It enhances the customer shopping experience by providing interactive product demonstrations, virtual try-on capabilities, and visualization of products in real-world environments. AR also helps reduce product returns by allowing customers to make more informed purchase decisions. Additionally, it can increase customer engagement, brand loyalty, and overall sales for retailers.

1. Enhances Shopping Experience

AR can improve the customer’s shopping experience by providing interactive and immersive features. Customers can virtually try on products, imagine how products will look in their homes, access additional product information, and receive personalized recommendations. This enhances the shopping journey, making it more engaging, convenient, and tailored to individual preferences.

Augmented reality (AR) is like magic for shoppers. It lets them use their phones to see how things like furniture would fit in their homes before buying. This makes shopping fun and helps people decide what to buy.

Big stores like IKEA and Amazon use AR to make shopping easier. It’s not just about making shopping cool; it also helps your brand connect with customers who love technology.

Through personalized AR experiences, retailers aim to offer customers a shopping journey that feels tailored to their individual preferences, making the overall experience more engaging and enjoyable. By leveraging AR technology, retailers can maximize customer satisfaction and facilitate a more efficient and targeted shopping experience.

In simple terms, AR in retail makes shopping better, and a good shopping experience is crucial for a successful retail business as digital transformation. You want people to enjoy shopping with your brand and remember it as a positive and easy experience.

2. Promotes Brand Loyalty

The saying “Out of sight, out of mind” rings true in the retail industry. To keep your brand on customers’ minds, create memorable experiences using the excellence of Augmented Reality. AR apps like Nike offer exclusive content and athlete promotions, sparking interest and loyalty. Integrating AR into retail creates unforgettable experiences, boosting loyalty and word-of-mouth.

Imagine customers attending virtual events and meeting brand ambassadors through AR/VR apps. This engagement builds lasting bonds. Using AR in retail can skyrocket brand awareness and loyalty.

3. Drives Better Engagement 

AR adds a dynamic twist to engaging with your brand and products. This fosters ber loyalty.

AR can be applied through interactive packaging and in-store experiences, like Adidas’ AR game. Customers use smartphones to scan a code and embark on a virtual scavenger hunt, entertaining and deepening their connection with the brand.

AR is also potent on social media. Create shareable AR experiences to boost online presence and customer engagement. This not only generates buzz around your products but also builds a community among your target audience.

4. Increases Sales & Conversions 

AR technology offers customers a virtual try-on experience, making shopping more enjoyable and impacting purchasing decisions positively. Social media platforms have embraced virtual try-on features, saving time and boosting customer confidence.

AR also excels at personalization, allowing customers to customize products with various options. A furniture retailer, for instance, can help customers visualize how items fit into their homes. This reduces hesitation and increases cart additions. Moreover, AR enables personalized product recommendations and cross-selling opportunities. Porsche showcases AR’s personalization prowess, letting customers create unique products.

By integrating AR technology in eCommerce or mCommerce, retailers can earn much more compared to those not using it. AR enhances the customer shopping experience by providing interactive and immersive features, thus increasing customer engagement and ultimately leading to higher sales and revenue for the business.

5. User Content Personalization 

Retailer personalize their content as per the customer choices. They make changes in their sales strategies to offer what users want. You might have noticed retailers showcasing things similar to what you like in many ways. There’s also something called VR or Virtual Reality that helps make shopping even better. When these technologies work together, they create really good shopping experiences with AR and VR.

Integrating AR has become a mandatory trend in the retail sector. Businesses need to stay competitive and meet consumer expectations. Customers increasingly seek unique and interactive shopping experiences, and AR technology allows retailers to provide just that. By integrating AR, retailers can differentiate themselves from competitors and attract more customers to their retail stores or online platforms.

6. Better Competitive Advantage 

Standing out in the retail world can be tough. But, using AR technology can help you stand out and get new customers while keeping your loyal ones. Imagine how cool it would be for customers to use AR to explore your products. This makes your brand more exciting and shopping with you easier.

Even small stores can use AR now, thanks to platforms like Shopify. Using AR makes your store look advanced and cool, which attracts people who like technology. Soon, everyone will use AR to shop. And if AR is still not a part of your business strategy then you may stay back in the competitive race.

7. Sharable and Trackable Content

Happiness, assurance, and satisfaction often comes after getting positive reviews from others. AR-powered filters and shopping apps comes with the option of sharing photos on social media and in-app. Thus, making it handy to share the pictures with friends and family.

Integrating AR has become a mandatory trend in the retail sector. It is essential for businesses to stay competitive and meet consumer expectations. Customers are increasingly seeking unique and interactive shopping experiences, and AR technology allows retailers to provide just that. By integrating AR, retailers can differentiate themselves from competitors and attract more customers to their stores or online platforms.

The feedback makes shoppers decisive about their product selection. If they are happy they tend to buy the product directly in-app. Making it as a powerful organic marketing tool that can help you drive revenue and generate brand awareness.

8. Contactless Experiences 

Augmented Reality is a boon for both customers and retailers. Customers can save time, effort, and even money by virtually trying on products. This helps them visualize products on themselves before making a purchase. Eventually, leading to higher conversion rates and fewer returns, in turn, impacting retailers bottom line positively.

AR in retail significantly reduces hygiene issues by offering a virtual alternative to in-store visits. As the retail landscape evolves and concerns about direct interaction with products persist, there is a noticeable increase in online sales.

These AR shopping experiences effectively minimize the need for direct physical interaction, thereby reducing the risk of spreading germs. With the ability to visualize and interact with products in a virtual space, customers can make informed purchasing decisions without compromising their safety and well-being.

Snapchat states that 93% of its users are interested in using AR for shopping.

With such an amazing list of benefits, you must be all set to adopt augmented reality in retail stores but before you hop on this new trend, here is the list of challenges that you may face.

What Is AR Doing for The Shopping Experience for Consumers in Retail?

Augmented Reality (AR) is making a big impact on how we shop, both online and in stores. Here are some ways AR is transforming the shopping experience:

1. Personalized Content: Stores use AR to show you items that match your preferences, making shopping more enjoyable.
2. Easy Try-outs: Virtual mirrors help you see how clothes fit without waiting for a trial room. Online, you can try on glasses using AR.
3. Combining In-Store and Online Shopping: AR brings the fun of traditional shopping to online platforms without the hassles of inventory and long lines.
4. Connecting Shoppers with Printed Content: Holding your phone over pictures can give you more information and similar items, making printed content interactive.
5. Increasing Brand Awareness: AR helps brands stand out by offering unique experiences through mobile apps, creating instant feedback opportunities.
6. Breaking Language Barriers: AR features in shopping apps can tailor language options based on region or use AR and AI tools to help users understand services.
7. Better ROI: Businesses using AR in retail earn more and stay competitive. Creating AR apps has become easier and more cost-effective.
8. Improved Shopping Experience: Retailers use advanced features like digital mirrors to enhance the customer journey, ensuring satisfaction and loyalty.
9. Data Collection on Customer Preferences: AR in retail helps collect data on what customers like, enabling businesses to make informed decisions and offer personalized experiences.
10. Reducing Returns: Integrating AR with e-commerce lets customers virtually try on products, reducing returns due to size and fit issues.
11. Minimizing Hygiene Concerns: AR shopping experiences provide a virtual alternative, reducing the need for direct handling of products in stores.

Augmented Reality Industry Challenges 

1. Security and Privacy Issues with Augmented Reality 

Privacy and security are big issues in the AR industry. This is because there are no clear rules for what’s allowed and what’s not in augmented reality. So, people can use AR for bad things, like spreading fake images or stealing information. For example, instead of trying on clothes using AR, someone could use it to put embarrassing images of you online. AR can be used to spy and steal your significant data.

One important reason for such problems is that people don’t realize the seriousness of the matter. Developers don’t take any major action to stop such issues until they turn into a big problem.

2. Poor Quality of Content & Use Cases

AR technology is growing fast, but it faces some big problems. Most AR apps you find are just simple tricks, and they don’t add much value. They are like a one-time show. One reason for this is that there aren’t enough skilled developers who understand how to make AR useful.

Another problem is that AR doesn’t always have a clear purpose. Many AR apps can do things that you could already do without them. AR should enhance what you’re doing, either by giving you better information or helping you do something easier. But making AR work well is tricky, and it often takes trial and error.

3. Absence of Proven Business Models

The popularity of Augmented reality is growing every day but people are unable to draw profits out of it except the gaming industry. The major reason is the lack of understanding of how AR can benefit their business. Startups and big companies are trying out AR ideas, but most of them can still make money without AR.

The most famous AR game, Pokemon Go, only made money because of its brand. When the excitement died down, people stopped playing. But there is hope in industrial companies. They have enough money to develop AR, and there are many ways AR could be useful, like in construction projects, checking for mistakes, monitoring construction progress, showing hidden infrastructure, and giving maintenance instructions. These kinds of AR applications could make AR more than just a toy and actually help make better products.

4. Absence of Augmented Reality App Design & Development Standards

Standards are like a common language for software. They help make sure that different software works together smoothly.

Why? The augmented reality is still at the new front where

Because Augmented Reality is still very new, and it’s changing and improving a lot. Without these standards, every Augmented Reality project is like its own unique thing that doesn’t easily work with others. This slows down the progress of the technology.

But don’t worry, we’re going to develop these standards over time. When that happens, it’ll show that Augmented Reality is really here to stay.

Traditional Retail Marketing Challenges

Traditional retail marketing faces several challenges in the fast-paced, technology-driven world we live in today. These challenges highlight the need for a transformation in the approach to marketing in brick-and-mortar stores. Some common problems faced by traditional retail marketing include:

1. Insufficient inventory management

A recurring limitation in traditional retail businesses is that items do not need to be in stock, which often goes unnoticed until customers physically visit the store. This lack of real-time inventory visibility poses a significant challenge for businesses, especially those with limited resources and potential stockpiling. Inadequate inventory management can lead to dissatisfied customers, missed sales opportunities, and a decline in customer loyalty.

2. Limited personalization

The ability to deliver personalized messages tailored to individual consumer behaviours and preferences is crucial in marketing. However, traditional retail marketing methodologies often need to provide the level of personalization that modern consumers expect. By understanding and resolving individual customer needs, businesses can effectively engage their target audience but may need more opportunities.

3. Ineffective targeting

Traditional retail marketing methods often rely on general advertising strategies, such as newspaper ads, billboards, or television commercials, to reach a broad audience. While this may increase brand exposure, it often fails to target the right customers who are genuinely interested in buying the products or services offered. Inefficient targeting wastes marketing resources and hampers the ability to generate meaningful leads and conversions.

4. Lack of real-time data analysis

Unlike their digital counterparts, traditional retail marketing strategies do not need to collect and analyze real-time customer behaviour and preferences data. This limitation makes it difficult for businesses to promptly make informed decisions.

5. Difficulty in measuring campaign effectiveness

Measuring the impact and success of marketing campaigns is vital for any business. However, traditional retail marketing often needs more tools and methodologies to accurately track and evaluate its effectiveness. With proper metrics and analytics, companies find it easier to determine their marketing efforts’ return on investment (ROI), hindering their ability to make business decisions and allocate resources effectively.

Top Brands Using Augmented Reality in The Market 

Well-known companies are using Augmented Reality (AR) to improve online and offline shopping. They’ve come up with cool ways to make AR shopping enjoyable for users. Here are some companies doing great things with AR.

  • Adidas

Adidas showed how technological innovation can be fun and useful. They introduced a cool AR feature during ComplexCon CA 2018. People could use their phones to find and buy the latest sneakers. They just had to follow the signs in some places and didn’t need to talk to anyone from Adidas.

  • Nike

Nike incorporates augmented reality (AR) and virtual reality (VR) technologies in their retail experience to enhance customer engagement and provide detailed product information. By leveraging AR, customers can scan items such as shoes or clothing, which enables them to access comprehensive product details and specifications. This allows buyers to make more informed purchasing decisions based on their preferences and needs.

Incorporating AR and VR in retail allows Nike to transform the traditional shopping experience into an interactive and educational one. By blending these cutting-edge technologies with their products, Nike creates a dynamic and immersive environment that showcases their range of offerings and empowers customers to make more informed choices while connecting them to the brand’s values and commitments.

  • IKEA

When you think of furniture and gadgets shopping, IKEA stands out. They’ve got this cool AR tech in their stores. With it, you can use your phone to scan a piece of furniture and see how it looks in your room. It works for any room, from your bedroom to your garden. It’s a real-time and energy saver!

  • Topshop

Topshop’s AR magic lets you try on clothes virtually in-store. Use hand waves to switch outfits on your digital reflection. It not only boosts your mood but also spreads joy to others nearby.

  • Vespa

After downloading the app, you just need to hover your phone over the magazine as shown in the video and a scooter will automatically pop up. You can customize the vehicle as per your choice. You can change the colors, add/remove accessories, look for different styles, etc. Isn’t this a quirky use of AR marketing?

  • Sephora

Sephora made a cool app called Virtual Artist that uses fancy tech to let you try on makeup using your phone camera. It also tells you what stuff you need to put on makeup. This app helps them sell more makeup, and people love showing off their makeup looks online.

  • Apple

Through the AR Quick Look feature, Apple has integrated AR technology into their in-store experiences, enabling customers to explore their latest products, such as iPhones and iMac models. This allows customers to virtually place the products in their own space or hands, providing a personalized shopping experience.

Summing Up! 

The above blog clearly depicts the benefits of augmented reality in the retail business and its significance in the near future. Now, if you are planning to build a successful and robust strategy then, you need to think about how AR can improve customer’s shopping experience.

At Codiant, a well-known AR and VR development company, we’ve assisted many startups, small businesses, and brands in creating advanced AR and VR solutions for retail. With our top-assisted AR app development services, we have helped many clients take the competitive edge and achieve their desired goals.

Are you ready to embark on a new journey? Get in touch with Codiant to learn more about How AR/VR solutions can help you learn and elevate the new heights of success.

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Contact us today!

Frequently Asked Questions

By integrating AR technology in eCommerce or mCommerce, retailers can earn much more compared to those not using it. AR enhances the customer shopping experience by providing interactive and immersive features, thus increasing customer engagement and ultimately leading to higher sales and revenue for the business.

Augmented reality saves time and costs by reducing the need for physical try-ons and tryouts or visits to physical stores. Customers can virtually try on products and make informed decisions without the need for multiple visits or returns.

AR technology in retail has proven to be a game-changer in dissolving language barriers. Despite the vast array of languages spoken worldwide, these barriers are swiftly being overcome. The introduction of Google Translate AR mode, for instance, allows users to perceive any of the 40 foreign languages as their native tongue. This revolutionary feature enables seamless communication and understanding between individuals who speak different languages.

AR in retail is a powerful tool that greatly enhances a company’s brand reach and awareness among diverse audiences.  Utilizing AR for retailer marketing strategies provides brands with a significant advantage, allowing them to explore ingenious ways to engage with their audience and foster meaningful interactions. This creates a direct channel for instantaneous feedback, enabling brands to constantly adapt and improve their offerings based on user engagements. With AR, retailers can effectively create a memorable and impactful marketing and branding campaigns , reaching wider audiences and solidifying their position in the market.

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