Augmented Reality in Retail: Business Benefits & Use Cases

February 15, 2023

The retail industry has pioneered the use of technology in warehousing, logistics, marketing, and customer service. There is, however, an increase in consumer demands.

They are expected to incorporate immersive technologies into their shopping experiences by 2021. Sixty-nine percent of customers expect to use AR/VR while shopping, and retailers are adapting and implementing this immersive technology. In retail, augmented reality is expected to reach $10 billion by 2027, up 46,6% from before the pandemic.

This blog explores AR-enabled eCommerce apps, discusses the impact of augmented reality in retail, and explains the essentials of AR app development. Learn more by reading the rest of this article!

How augmented reality works

AR can be experienced using a variety of hardware, such as handheld devices (smartphones and tablets), wearable devices, PCs, laptops, TVs, digital mirrors, glasses, head-mounted displays, lenses, and even fitting rooms. 

Retailers benefit from AR

The AR retail application market offers a number of opportunities for reducing expenses and increasing customer satisfaction.

Below is the list of benefits that AR shopping has for businesses.

Boosting sales

Through AR technology, customers can virtually try on products before buying them – for instance, they can see how clothes will fit or how new furniture will look in their homes or offices. AP reduces the customer journey and increases store conversions whether the customer shops online or offline.

Minimizing returns

AR Assists customers in avoiding disappointment and choosing products that are right for them. Therefore, both online and brick-and-mortar store return rates tend to decline.

Increasing customer engagement

By providing the additional product details customers may need, augmented reality in retail ignites customers’ interest in products. Customers who are knowledgeable tend to return for more products whenever they can.

Creating social media content

AR experiences provide customers with something to share on social media and talk about. Product and brand awareness is increased through comments and discussions on social media.

Collecting data on customer preferences

AR-enhanced shopping provides customers with valuable information about their interests, preferences, and shopping patterns. Personalized advertising and marketing campaigns may be delivered by retailers using these insights.

Use cases for AR in retail

The retail industry implements AR in two fundamentally different ways: in-store and out-of-store. Consumers could experience AR through handheld devices, wearable devices such as AR glasses, or special AR hardware such as smart interactive mirrors, fitting rooms, shop windows, etc.

Out-of-store AR can be experienced via e-commerce mobile or web apps from another physical location. Combining in-store and out-of-store approaches is the best strategy, the “omnichannel” approach. Some retailers, however, cannot afford to install hardware in-store, such as mirrors, and they rely solely on their online presence without the hassles of running a brick-and-mortar store.

Using augmented reality in retail as an example, let’s explore how both approaches work.

1. Space visualization and virtual tours

The use of technology allows customers to experience a store or a property without paying a physical visit. Using augmented reality, they can learn about the essential details beforehand and get a feel for the place.

AR Retail apps such as Magicplan, for example, allow customers to visualize their homes after renovations are complete using an AR-enabled property design planner. Customers can even walk through their renovated homes virtually and estimate the materials they will need.

The Lowes AR app enables customers to navigate through the brand’s stores, pick better routes and find what they need quickly.

2. Color matching

Additionally, augmented reality shopping apps can be used to create an optimal palette or match colors for a room or outfit. You can choose the color of your home’s walls using Dulux’s Visualizer app, for example.

Prestige ColorPic, an app that lets users pick the perfect wall color and order it directly from Amazon, is another example.

3. Outfit visualization

One example of an augmented reality app is one that helps consumers visualize how the clothes on store hangers will look in real life. By using the ASOS Virtual Catwalk app, shoppers can see how clothes look on models with different body shapes and sizes.

4. In-store displays

In Several brands are installing interactive displays in-store to enable augmented reality in retail stores.

In Kate Spade’s stores, for instance, shoppers can customize their own bags with the use of augmented reality displays.

To demonstrate how different lipstick colors and makeup will look on shoppers’ faces, Charlotte Tilbury uses AR displays designed as mirrors.

5. AR fitting rooms

Customers no longer have to try clothes on to determine how they fit with augmented reality in retail. It is possible to choose the look that best suits them using a virtual fitting room. In Timberland stores, visitors can try on clothes in mirror-like displays and see how they look.

It is even possible to see how visitors will look in a particular outfit without entering the store. Located at Shanghai’s West Nanjing Road Station, Lily’s, a Chinese apparel brand, has installed an AR display on the store window. While waiting for trains, passengers can try on clothes.

6. AR-enabled try-on

In retail, virtual try-ons are some of the most compelling AR applications. It is possible for customers to try on products using AR apps without having to visit a store. Customers can, for example, see how their faces will look if they wear different frames with Warby Parker’s AR app.

Nike Fit, an augmented reality shopping app, has also been launched by the world-famous sportswear giant. Users can estimate their shoe size and save it in the app using AR technology. When customers shop for shoes, they can easily retrieve the size.

Take a look at how AR transforms jewelry shopping to see how it’s being used in retail. Customers can now virtually try on pieces of jewelry they like to find exactly what they want. A solution like Diamond Hedge allows customers to shop for diamond rings from luxury brands, fit them in real-time, and ultimately buy them.

The fashion and beauty industry is also using augmented reality to give customers a different way to try on their products. Users can try on Sephora’s products using a combination of face recognition technology and augmented reality through its mobile app, for example. Customers may order their new look via an app interface if they like what they see.

7. Large products shopping

Shopping for large products, like furniture, is especially convenient with augmented reality retail apps. By using an AR app, customers can see exactly how a piece of furniture will fit into their living room. Most people think of Ikea when developing an AR retail app for furniture shopping, but other furniture brands offer equally compelling solutions.

As an example, the Homestyler app allows customers to design their rooms based on real-life dimensions and parameters. Additionally, it’s completely free and available for both iOS and Android devices. Besides visualizing how different room designs will appear in actual living spaces, the Decor Matters app also uses artificial intelligence and augmented reality.

BMW uses augmented reality apps to help customers explore car models, customize parts, and take pictures.

8. Brand engagement

AR is now being used by some brands to boost customer engagement by offering fun and interactive experiences. When customers view their holiday cups through their smartphone screens, Starbucks, for example, makes them ‘come alive’.

There is a different kind of experience offered by the Moosejaw-XRay catalog. With the AR app, users can view the models in their underwear through their clothing in a catalog. This has resulted in a 37% increase in catalog sales.

9. Building customer loyalty

As a way to keep its customers loyal, Lego offers a new activity in-store. On a display screen in the store, customers can view the complete animated set of Lego sets when they lift the boxes with Lego sets.

A fun AR game has also been introduced by Toys-R-Us for its youngest customers. Players can access games and quests through the Play Chaser App by scanning the signs located inside the brand’s stores. 

10. Helping customers make informed decisions

A customer may need to go back home to consider all the aspects of a purchase before making one, especially before purchasing an expensive item. Providing customers with a brochure that they can scan to access AR visualizations of products could help them make more informed decisions.

As part of its service to customers, Pipeline Latvia offers customers scannable AR brochures that help them select optimal water circulation piping systems.

Regarding AR app development

There are several distinct categories of AR application development:

  • Creating AR experiences via a browser interface is a part of web-based AR development.
  • The native AR app must be installed on the user’s system in order to provide the same immersive experience.

Neither of these development types is better than the other, so your choice will depend on your business model as well as your target audience.

The foundation of all AR apps is the 3D model and the marker, which acts as an anchor to hold the 3D graphics in place. It is possible to use anything as a marker: Starbucks placed one on their holiday cups, and Philips is using AR tags to mark their products.

As a result, we are brought to another segment of the AR application development market: marker-based AR and markerless AR.