Blog Post - Naji El-Arifi, Mar 12 2019

AR in retail: the next big thing just hit your homepage

AR in retail: the next big thing just hit your homepage

For years, Augmented Reality (AR) has been something of the bridesmaid of technological innovation; the perennial next-in-line to shake up the digital possibilities all over again, AR has promised much but, so far, has yet to fully deliver on its potential. One phenomenal breakthrough success with the video game app, Pokemon Go, aside, it has yet to have the mainstream impact anticipated.

Not that AR has ever looked in danger of withering on the vine before reaching full bloom. Aside from the gaming world, there is no shortage of examples of AR being put to use across industry and commerce. For many - including some of the biggest hitters in the tech world - AR's blending of real life with digital carrier greater potential for more widespread applications than its cousin Virtual Reality (VR), which relies on complete immersion in the digital.

Retail is one of the sectors where examples of AR in use are far from difficult to find. The great appeal for brands and retailers alike is AR's ability to radically enhance customer experiences both online and off, and, in many ways, break down the distinctions between the two. From viewing an AR-enabled shelf through your device camera to activate product-linked resources to being able to sample goods remotely, AR brings together the immediacy of in-person experiences with the bast potential for accessing information digital offers.

The challenge has been how to make AR in retail universal. To date, AR has only been available via specialised, purpose-built equipment or apps for smartphones or tablets. Building apps to provide customers with AR experiences is often expensive and there is no guarantee people will download it anyway. That has made it difficult for companies to get good ROI on their AR investments, hampering adoption.

Things may be about to change, however. Spearheaded by Apple and Google, AR is breaking the shackles. Instead of consumers having to download a separate app to enjoy the AR experiences offered by every single brand and retail outlet, we are close to seeing AR capabilities become native to iOS and Android devices via the browser, and, therefore, accessible to the overwhelming majority of mobile device owners.

With AR available through the browser, we can expect its presence and influence in commerce to soar. Buoyed by availability, it would be a brave move to bet against augmented commerce being the next major trend in retail.

How AR found its purpose in commerce

AR's role in retail thus far has involved a lot of experimentation and discovery. When AR first came along, it sounded like a great idea, but no one was quite sure how it could best be used to support brand building and drive sales. Brands have understandably needed time to play around with the technology to find out what it is capable of.

In the most formative stages of adoption, and perhaps taking their cue from its role in the mobile gaming world, brands have often used AR in a playful, sometimes gimmicky, way, with little thought other than drumming up a bit of buzz. US snack brand Cheetos, for example, went to the trouble of building an app that showed what real-life objects as viewed through your smartphone camera would look like if they were made out of Cheetos to coincide with the SXSW festival in Austin, Texas.

Brands have similarly experimented with using AR to 'bring to life' static advertisements - if the print display ad or billboard is viewed through a specific app, it triggers additional multimedia content. As noted, the difficulty of this approach is encouraging people to download the app in the first place - if they don't, it means campaign costs have been raised significantly for little impact. There are also suggestions that using AR in this way can muddy marketing messages, confusing what the advertisement was intended for.

Consensus has, therefore, grown that AR should be more than a bit of glitz sprinkled on top of branding and marketing activities. As time has gone on, the majority of AR use cases in retail have sought to add something meaningful to the customer experience, going beyond straightforward promotion to providing something extra to the shopping journey.

The AR magic mirror

An example which bridged the divide between attention grabbing and utility is Timberland's deployment of 'virtual changing rooms' in shop window displays. Passers-by were picked up by a camera and shown on a full-length screen. They could then use the interactive displays to navigate through a digital catalogue of Timberland products superimposed on their image. Thus, AR was used with a clear purpose, to drive footfall by enabling product exploration.

Using AR to create digital 'magic mirrors' that allow customers to digitally sample products has become popular amongst clothing and cosmetics companies. Topshop is another major name that has used the Kinect virtual changing room system deployed by Timberland. but, there are many more examples of companies building magic mirror apps for smartphones. Lacoste, for example, created an app to support its LCST brand. The in-store product activation capabilities supported by the app included full 3D interaction, allowing customers to try virtually 'try on' 3D images of shoes on there and then. The app attracted more than 30,000 downloads.

Apps also allow for virtual product sampling outside the store. Converse, for example, built an app with similar functionality to LCST specifically to allow customers to 'try on' footwear at home. In the cosmetics sector, L'Oreal's MakeupGenius app has been one of the real success stories of AR in retail to date, boasting more than one million Android downloads. It allows users to try out a wide range of makeup and hair colour products by uploading a selfie or giving the app direct access to their camera for a 'live' makeover.

In-store experiences in the home

Away from fashion and beauty, the home products sector has also been right at the forefront of pushing purposeful applications of AR technology in retail. US home improvements giant, Lowe, for example, has launched apps that use AR to do everything from take instant measurements in the home, to helping shoppers navigate around stores to find the product they want.

A number of home furnishings brands and retailers have used AR to let customers visualise how products would look in their home. One of the pioneers was Swedish giant, Ikea, which launched its famous AR catalogue in 2014. To aid visualisation, customers place the catalogue where they think they might want, say, a new sofa, wardrobe or bed in a room, point their device camera at it, pick a product within the app, and voila! It appears in front of them.

Breaking down the barriers: AR goes native

With ARKit, Apple achieved considerable improvements in the functionality and performance of app-based AR software. But, it is with the follow-up release of the platform, ARKit 2.0, that the tech giant has perhaps sown the seeds for AR technology finally going mainstream.

ARKit 2.0 includes a number of innovations that are intended to make AR more of a 'social' experience, such as multi-device support. Whereas, to date, any interaction between user and an AR object has been confined to one device, ARKit 2.0 allows AR experiences to be shared collaboratively across screens.

For marketers, we developers, brands, and retailers, the most exciting change introduced by ARKit 2.0 is not one that would necessarily grab attention right away - the launch of a new AR file format. Working with Pixar, Apple has developed a format it is calling USDZ that allows AR objects to be shared across the entire iOS ecosystem. As innocuous as this sounds, what it means is that every programme in every iOS device effectively becomes AR-enabled by default. You can send AR links by IM or email, and an iPhone or iPad user can run them without a dedicated app. You can also embed AR directly into websites, accessible via the Safari browser.

For ecommerce, native AR changes the game. No longer do you have to worry about ROI for building an app and the marketing required to encourage enough people to download it. Your digital product catalogue can be brought to life by AR on every channel.

Right at the cutting edge of this technology, Wunderman Thompson Commerce has been involved in launching one of the first AR-native ecommerce sites in home products retail. Working with enhanced visualisation specialist Viutek, we customised the DFS website, home of the UK's largest upholsterer, to provide product activation and 3D visualisation for iOS users. Now, instead of needing to download an app, anyone with an iPhone can click onto the DFS site and project digital images of sofas and chairs onto their room to see how they look.

The indications are that Google is hot on Apple's heels with plans to introduce native AR capabilities to its Chrome browser, making the technology automatically available via the two billion devices Chrome is installed on worldwide.

From an attention-grabbing gimmick, AR's use in retail has evolved to add rich digital content to in-store shopping experiences and to extend in-store experiences into the home. Now, as we see the first browser-native AR functionality appear on ecommerce sites, it seems that sheer reach could complete this amalgamation of on and offline retail. With augmented commerce, the distinctions between the physical / in-store and the digital no longer apply. Every shopping experience can be both at once.

Augmented Reality is just one of the leading digital trends we explore in our Futures 2019 trend report.

Download Futures 2019