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Augmented Reality in retail: 3 Main Advantages and 3 things to consider before an investment

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In the past decade, we’ve witnessed so many changes in the world of technology that have had a strong impact in every sphere of life. The number of devices owned by the average consumer has exploded. Recently, brands and retailers have realized the power of mobile devices and are trying to implement a mobile strategy in the customer journey.

Today, we can’t imagine our lives without our smartphones - phone, alarm clock, music player, social media, all our favorite apps - our life in our pocket.

According to Statista, the number of smartphone users is forecast to grow from 2.1 billion in 2016 to around 2.5 billion in 2019, with smartphone penetration rates increasing as well. Just over 36 percent of the world’s population is projected to use a smartphone by 2018, up from about 10 percent in 2011.

The numbers are even higher if we talk about key countries, representing 65% of the world’s population. In a report from Zenith, in 2018, 66% of individuals in 52 key countries will own a smartphone. Knowing that more than 50% of all web traffic is coming from smartphones and tablets, it becomes clear that focus on mobile can be a significant competitive advantage.

However, today when we talk about mobile devices, we are not just talking about responsive web design and mobile apps. Brands and retailers are constantly looking for ways to utilize the power that these devices hold.

AR and smartphones - a match made in heaven

The term augmented reality was born in the early 90s, but that doesn’t mean that the idea wasn’t around before. Despite the fact that there were a lot of experiments with AR that started in the late 50s, it was more of a scientists’ toy until smartphones arrived.

In 2013 Google launched smart glasses, but they were never broadly adopted due to the high price, safety concerns, and unattractive design. Even though the expectations were high, Google Glass didn’t live up to the hype. But tech companies are not giving up on AR glasses, as time passes by we are reading more about a Google Glass comeback, Facebook plans to build AR glasses and Amazon’s startup North, that is also working on their own version of wearable tech.

With all this information in perspective, we can definitely say that the future of AR is quite exciting. Tech companies are experimenting with other means of introducing augmented reality experiences, but for now, when we talk about AR, brands and retailers are focused on leveraging the potential of smartphones to help them enhance the shopping experience.


AR-furniture


A step back…

Augmented reality overlays digitally created content into the real world. So when interacting with the virtual content, users are not excluded from normal reality. Augmented reality and virtual reality have different use cases, technologies, and market opportunities in retail. The main difference between VR and AR is that augmented reality users are not blocked out from reality, and they can see the real world as well as virtual objects. This is opposed to virtual reality where users enter into a 3D, computer-generated environment that people can explore. This technology creates an entirely artificial world where people can manipulate objects or perform a series of other actions. For this kind of virtual experience, customers must have special headsets which are still quite expensive.


AR-VR Comparison

 

Get the full guide

 

Although the idea of AR has been around for quite some time, the vast majority of people heard about this new reality after the Pokemon Go madness. Luckily, the misconception that AR can only be used in games is now behind us. Today we are seeing more companies discover the commercial potential of this technology.

A report from Perkins Coie shows that respondents still think that the most significant investments in AR/VR will be in gaming, but this percentage has dropped to 59% from 78% in 2016. And this is not the case just with gaming, entertainment-centric industries such as movies, television, and live events have also dropped when compared with polls from 2016. On the other hand, retail has had a notable jump, which can be explained with the evolving use of AR applications and smartphones.

Research from  Interactions Consumer Experience Marketing shows that furniture is the most popular item to shop for with augmented reality (60%), followed by clothing (55%) and then groceries (39%).

infographic_interactions_daymon  

This is no surprise. Furniture is an incredibly visual industry, and customers welcome every effort to bridge the gap between the online and in-store shopping experience. Having this in mind, it’s clear that AR has significant potential to disrupt the furniture industry and to ease the decision-making process.

How can AR change the way we shop for furniture?

Physical stores will not disappear anytime soon. The predictions that retail will be dead soon are… well, dead. Instead of an apocalypse, we’ve witnessed a renaissance. Technology has played the leading role in the retail transformation, and the progress we’ve seen so far is just a small trailer for what we are about to see in the future.

Here are the 3 main advantages of using AR in furniture:

  1. Try before you buy. AR enhances physical objects with digital content, so customers can see how a new sofa would look in their apartment, in real-time and without any risk that they are paying for something that doesn’t fit. The possibility to “try before you buy” is very important, especially for big-ticket items. This way customers can virtually “try out” furniture, not worrying about bad decisions, which removes a huge weight from their shoulders before the big purchase.
  1. Product customization. Users can visualize and modify size, color, and placement of the furniture prior to purchasing. This way, furniture companies can help cut down on the anxiety customers face while shopping for furniture, giving them a plethora of choices to test and allowing them to buy their favorite item with one click through the app. According to Interactions Marketing, 77% of shoppers want to use augmented reality to see product differences such as a change in color or style.
  1. In-store engagement. Nearly 60% of shoppers look up product information and prices on their mobile phones while in-store (Retail Dive). With an AR app, companies can use digital imagery throughout the store to share information, tips, tricks, and how-tos. AR apps are also convenient for in-store navigation, as well as loyalty rewards that customers can save to their wallet and redeem at their convenience.

 

Are we there yet?

AR helps companies engage and retain customers, giving them the opportunity to use their smartphones to add virtual furniture into their room. The fact that customers can make more informed purchases helps furniture brands and retailers decrease product return rates. Still, there are some things that companies need to consider before adopting AR:

  1. Visual quality. Some of the biggest players have already introduced their AR apps, giving customers an opportunity to insert virtual objects, such as sofas, tables, and chairs, into their home and immediately see how the piece of furniture would look. However, the overwhelming majority of them are using low poly. According to Deloitte, more than 95% of AR in 2017 was cartoon style/low poly. When it comes to furniture shopping, superior-quality visualization is one of the top requirements for online visitors. In lack of tactile experience, customers rely on their visual perception, so make sure you have visuals that customers can almost feel.
  1. Relevant content. Perkins Coie research shows that user experience is still one of the main obstacles in mass adoption of AR (39%). Same as for VR, customers are not impressed by meaningless interactions. If you want to use AR to bring customers closer to the add to cart button, then you have to offer relevant content and an engaging experience. If you want to see meaningful ROI, then your AR app should be all about shopping, rather than an inspirational tool.
  1. Target audience. AR sparks customer interest. The results from Interactions Consumer Experience Marketing confirm that 61% of shoppers prefer to shop at stores that offer augmented reality, over the ones that don’t. Also, 71% of people said they would buy at a retailer more often if they offered augmented reality. Sounds cool right? Well, you should have in mind that most of the customers that prefer AR are Millenials and Gen Z. Before making a decision about if AR is the right technology for you, first think about your target audience. It will be interesting to see how things will change when digital-native generations become the leading decision-making generation with the highest purchasing power.

 

Mobile vs. web AR app

A new year is just around the corner, and we’ve seen some bold moves in the AR world. The furniture industry is not so conservative and rigid as we used to think. The tech-savvy brands and retailers are continually experimenting with new forms of engagement, both online and in-store, to deliver compelling customer experiences.

Despite all this, user experience and low adoption rates are still the main hurdles that companies need to figure out before AR will go mainstream. The general rule of thumb when choosing the right technology for your business is that you should focus on technology with tangible ROI and high adoption rate.

If we put aside the user experience, another big challenge is the usage of mobile apps. It’s hard to break through the noise these days. According to Statista, in 2017, consumers downloaded 178.1 billion mobile apps to their connected devices. In 2022, this figure is projected to grow to 258.2 billion app downloads. The most-downloaded non-gaming app publishers on the Google Play Store in January 2018 were Facebook, WhatsApp, and Google.

Researches show that nearly 85% of mobile users tend to spend their time on the top 5 apps. That means that your app is competing for 15% of people’s time.

According to The Manifest, social media apps dominate usage (39%), followed by gaming and communication/messaging apps (10%). The results show that the use of retail apps is still very low (7%).

Another interesting result from the same research shows that most people delete an app because they weren’t using it or it didn’t meet their needs. However, a surprising number of people (25%) remove an app due to a lack of storage space on their phone. If we take into consideration that furniture is not a frequently bought item, it becomes clear that there is a big chance that customers won't bother downloading an AR app.


The Manifest 2018 Consumer App Survey

 

Are web-native apps the future of AR?

We are still at the beginning of the journey into virtual worlds, but Cylindo is very bullish on web-native AR. Making it easy for customers to use AR with no app needed will have a positive influence on the adoption rate. Retailers will have the tool they need to complement a visit to the showroom, and customers will have the right amount of information to make more informed decisions.

In the future, as we see increased usage of AR in everyday life, the ability to access AR instantly without the need to install an app will become imperative. A lot of web browsers are getting ready for the new reality with AR “on the go.”

Are you ready to experience a web-native AR app that will make things easier for customers, while paving the way to leverage the full potential of AR in furniture?

 

YES, SHOW ME MORE

 


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About Author

Bili V
Bili V

The person behind the Cylindo blog. Excited about the future of technology and retail.

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