Why AR Technology Holds the Potential to Reinvigorate Retail
If last year was dominated by exaggerated chatter about a "retail apocalypse," this is the year where we witness a new topic taking hold of the conversation. Augmented reality (AR), the technology that shows the real world with an overlay or enhanced view of items or images, is already transforming the way people shop. Ikea, Wayfair and other furniture retailers let consumers use their AR-enabled smartphones to see what a piece of furniture would look like within a room prior to purchase. Similarly, Lowe’s and Home Depot let customers use AR to "try on" upgraded bath, kitchen or floor styles within their home prior to purchase. Apparel retailers like Rebecca Minkoff and Ralph Lauren incorporate AR-powered "magic mirrors" to show consumers a different size, color or item option without having to leave the dressing room.
Eventually, the bulk of retailers will use AR technology. An estimated 24 million AR-equipped devices will be sold this year, with projections reaching the 500 million mark by 2025, according to Bloomberg. If you’re wondering why retailers should care about AR tech, know that it’s far more than just a novelty. AR has the potential to entice consumers to purchase more items, reduce buyer’s remorse or hesitation, and turn the whole world into one giant virtual retail shelf.
More Opportunities for Purchases
Ikea was smart to leverage AR to get ahead of the competition. The company is known for being very selective about where it opens physical retail locations, causing consumers to often drive hours just to visit the store in hopes of making a purchase (or eating some meatballs). By providing the option of displaying furniture virtually, Ikea is able to entice a higher volume of purchases by inviting people who don’t want to visit physical stores, which often requires measuring an item’s fit and verifying its style match. Furniture retailers that don’t offer an AR option could risk not being considered at all once consumers come to expect the ability to see what their potential purchases look like in their homes.
The use case for apparel AR is also quite compelling. Ralph Lauren’s use of magic mirrors to help customers choose items with less fuss could lead to increased purchasing. Let’s say there’s a sale on accessories: being able to tap the mirror to virtually try on a variety of accessories for one outfit could lead to the purchase of additional items, whereas some shoppers might decide that trying on several more items in person is too laborious and leave empty-handed.
Eliminating Irrelevant Choices
AR offers more than just the ability to provide shoppers with an inviting experience that leads to increased purchases. It can lure in consumers by eliminating products that aren’t relevant with the aid of a smartphone or smart glasses. For example, people with certain dietary restrictions would be able to view all the gluten-free options on a shelf and ignore the other products, regardless of whether they’re marked as such on the manufacturer’s packaging. Or how about shopping for clothes online? Being able to virtually see what each item looks like when worn beforehand could eliminate or lessen buyer’s remorse — as well as cut down on costs to return items, a huge issue for many e-commerce retailers. Not only do consumers expect free returns today, but an inconvenient return process deters 80 percent of purchases, according to comScore.
Contextualizing Everything in View
With the rise of AR-ready devices, companies like Google have made it possible to identify items you view in your everyday life, while matching those items with your shopping history to reveal where they can be purchased. Last year, Apple released its ARKit for developers, which provides a similar functionality. The participation of these giants in the AR realm herald changes coming down the shopping pipeline.
The biggest change will be how companies and retailers accommodate AR technology to showcase products. The immersive capability of AR sets the groundwork for information layering. Being able to add a layer of digital emotion to what consumers see delivers an opportunity for brands to reinforce their value through an experience.
In the near future, having someone stop you to disclose how much they love your shoes, shirt or dress could take on a new meaning. Imitation is the sincerest form of flattery, and AR will not only simplify the ability to buy what you see, but will drive more tailored, individual purchases while increasing sales and customer loyalty.
Chaitanya Chandrasekar is CEO and co-founder of QuanticMind, a predictive advertising management platform.
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Chaitanya Chandrasekar is the CEO and Co-Founder of QuanticMind. Prior to this role, he built and managed the traffic acquisition platform and was part of the Data Science team at NexTag. His experience in the industry and knowledge of platforms led to his co-founding of QuanticMind. He strongly believes in the power of data technology, which can help decipher Big Data to unlock new ideas and opportunities. Chaitanya earned his Master of Science in Mechanical Engineering from Stanford University.