How Augmented Reality is Transforming the Retail Industry

Date Published
March 6, 2023

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How Augmented Reality is Transforming the Retail Industry

The retail industry has always been quick to adopt new technologies that can help them stay ahead of the competition. One of the latest technologies that has been transforming the retail industry is augmented reality (AR). AR has been around for a few years now, but it's only in the last few years that it has really started to make a significant impact on the retail industry. In this article, we will explore how AR is transforming the retail industry and what the future holds for this exciting technology.

What is Augmented Reality?

Before we dive into how AR is transforming the retail industry, let's first define what augmented reality is. Augmented reality is a technology that superimposes a computer-generated image on a user's view of the real world. Unlike virtual reality, which immerses the user in a completely artificial world, augmented reality enhances the real world by overlaying digital information on top of it.

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AR is usually experienced through a smartphone or tablet camera or through dedicated AR glasses. By using the camera, the user can point it at a real-world object, and the AR technology will add digital elements to it. These elements can be anything from information overlays to 3D objects that appear to be part of the real world.

AR and the Retail Industry

The retail industry has been one of the first industries to recognize the potential of AR. AR offers retailers a new way to engage with customers and create immersive shopping experiences. AR allows retailers to bring their products to life, enabling customers to visualize how they will look in their homes or on their bodies.

One of the most popular applications of AR in the retail industry is virtual try-on. Virtual try-on allows customers to see how clothes or makeup will look on them without having to physically try them on. This technology has been particularly useful during the pandemic, as it has allowed customers to try on clothes without having to leave their homes.

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Another way that AR is transforming the retail industry is through interactive displays. Interactive displays allow customers to interact with products in a way that was never possible before. For example, AR displays can show customers how furniture will look in their homes by superimposing a digital image of the product onto a real-world image of their room.

AR in Action

Let's take a closer look at some examples of how AR is transforming the retail industry.

Sephora's Virtual Try-On

One of the most successful applications of AR in the retail industry is Sephora's Virtual Try-On. Sephora, a cosmetics retailer, launched their Virtual Artist app in 2016. The app uses AR technology to allow customers to try on makeup virtually. Customers can select from a wide range of makeup products and shades, and the app will superimpose them onto the customer's face using the smartphone camera.

The Virtual Artist app has been a huge success for Sephora, with millions of downloads and a significant increase in sales. According to Sephora, customers who use the app are 3.5 times more likely to make a purchase than those who don't.

IKEA's Place App

Another example of AR in action is IKEA's Place app. The Place app allows customers to see how furniture will look in their homes before they make a purchase. Customers can select from a wide range of IKEA products, and the app will superimpose them onto a real-world image of their room using the smartphone camera.

The Place app has been a huge success for IKEA, with millions of downloads and a significant increase in sales. According to IKEA, customers who use the app are 2.5 times more likely to make a purchase than those who don't.

Home Depot's Project Color App

Home Depot's Project Color app is another example of AR in the retail industry. The app allows customers to see how paint colors will look in their homes before they make a purchase. Customers can select from a wide range of paint colors and the app will superimpose them onto a real-world image of their room using the smartphone camera.

The Project Color app has been a huge success for Home Depot, with a significant increase in sales. According to Home Depot, customers who use the app are 3 times more likely to make a purchase than those who don't.

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World Cup 2022

Though it isn’t technically a retail experience, augmented reality was used quite interestingly in the World Cup 2022 in Qatar last year to create an immersive user and fan experience.

AR was used to enhance the in-stadium experience for fans attending the matches. Fans were able to use their smartphones to access additional information about the game, check heat-maps, including player stats, live scores, and replays of key moments. This allowed fans to stay engaged with the game even when they were not able to see the action directly.

The Benefits of AR in Retail

The success of these AR applications in the retail industry highlights the benefits that AR can bring to retailers. One of the main benefits of AR is that it allows retailers to create immersive shopping experiences that engage customers in new and exciting ways. AR allows retailers to bring their products to life, enabling customers to visualize how they will look in their homes or on their bodies.

Another benefit of AR is that it allows retailers to personalize the shopping experience for their customers. By using AR, retailers can show customers how products will look on them or in their homes, which can help them make more informed purchase decisions. This, in turn, can lead to higher customer satisfaction and loyalty.

AR can also help retailers save money by reducing the number of returns. By using AR to show customers how products will look in their homes or on their bodies, retailers can reduce the likelihood of customers returning items that don't meet their expectations.

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The Future of AR in Retail

The success of AR in the retail industry has led to a growing interest in the technology. According to a report by Grand View Research, the global AR market size is expected to reach $340.16 billion by 2028. This growth is being driven by the increasing adoption of AR in various industries, including retail.

As AR technology continues to evolve, we can expect to see even more innovative applications in the retail industry. One area that is likely to see significant growth is AR-powered virtual shopping. With AR, customers can browse virtual shelves and see how products will look in their homes or on their bodies, without ever having to visit a physical store.

Another area that is likely to see growth is AR-powered customer service. By using AR, retailers can provide customers with personalized assistance and support, which can lead to higher customer satisfaction and loyalty.

AR is transforming the retail industry by enabling retailers to create immersive shopping experiences that engage customers in new and exciting ways. AR allows retailers to bring their products to life, enabling customers to visualize how they will look in their homes or on their bodies. The success of AR applications in the retail industry highlights the benefits that AR can bring to retailers, including increased sales, higher customer satisfaction, and reduced returns.

As AR technology continues to evolve, we can expect to see even more innovative applications in the retail industry. The future of AR in retail is bright, and we can expect to see even more exciting developments in the years to come. As AR becomes more mainstream, it will become an integral part of the retail industry, enabling retailers to create even more engaging and personalized shopping experiences for their customers.

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