Exploring some of the benefits of Augmented Reality’s integration into the retail business
By now you’ve heard of the growth of Augmented Reality (AR) technology generally. And you’ve likely learned of major AR company acquisitions, such as Oculus by Facebook and perhaps North, the smart glasses company acquired by Google.
But how has AR impacted retail lately? In fashion, and especially in light of recent changes to its calendar, VR and AR fashion shows have “democratized the runway” as the digital experience has brought so many more people to the, albeit virtual, front row. Virtual environments provide flexibility and the opportunity to reduce the cost of fashion shows and could do the same for retail spaces.
Old and New Retail
As traffic was already declining in malls across North America prior to Covid, retailers looked to new formats for the shopping experience, including AR technology to deepen and lengthen the duration of engagement with customers in-store as well as make it more transferable to pure digital experiences. The natural progression from brick-and-mortar stores to digital should give traditional retailers an advantage (over digitally native brands) so long as the digital experience tends to mimic or align itself with in-store experiences.
Meanwhile and perhaps behind the scenes, Amazon is using AR to improve operations, hacking the fulfillment segment of retail for example, which is obviously critical when there has been a serious uptick in deliveries. #pandemic #lockdown. For example, the delivery company’s servers keep “track of where the agents are and where they’re due to go and match up those routes against a database compiled from previous deliveries. The agents can make note of new tips they come across and record via AR eyewear or tablet, and have those added to the database for the next delivery.” Companies across industries are redesigning the process to make deliveries safer, faster, and more retrofitted to new consumer needs during this time, improving the experience and ultimately customer loyalty.
Historically, luxury retailers have been slow to adopt the latest technology, particularly as part of the in-store retail experience. But another trend, ushered in by the likes of Amazon — the instant buying culture — is a reflection of the expectations of the next-gen customers that luxury retailers must adapt to, pronto! We know that Gen Y and Z have warmly embraced AR. Just look at gaming. Not only is there purchasing agency via in-game use options, but the games (and related apps) themselves have also evolved into ecosystems of cash investment, of time initially, and eventually of purchasing across the ecosystem.
But enough about a dystopian future resembling #ReadyPlayerOne. Right now luxury brands are betting on TikTok, an AR-embedded video sharing network. Prada, Dolce Gabanna, Ralph Lauren, and others at the very minimum see the value of their marketing dollars here as no different from other media channels with huge audiences. If it wasn’t enough that these luxury retailers move to TikTok to demonstrate how quickly retailers are making AR part of their digital transformation strategy, the existence of PlugXR certainly is. This company claims it can help you build and turn on your own branded AR app in a day’s time.
Like any hot-off-the-press experience, onboarding the new technology typically shines a light on the agility of retailers, to launch new experiences i.e. the proof is in the pudding in how quickly retailers can integrate and unify their data to turn on that new commerce channel. At XY, we’ve tackled the integration work to turn on new retail experiences, high-tech pop-ups, and modern mixed-use and showroom concepts, all in a matter of hours.
Core to growth
It looks like AR and especially AR gamification of the brand experience is just getting started. Peloton engaged consumers prior to the pandemic with an AR-infused showroom and gym retail and excelled during the lock-down. In addition to any AR replication of physical store experiences, this exercise equipment, and media company has used AR to grow beyond its initial core offering of fitness and exercise, merging its product experience with sports and entertainment (figures and activities). The brand is also pushing into gamification like Lanebreak (which looks in many ways like it’s planned to be translated to an AR experience) and new devices like the Peloton Guide which bring the user on screen with the instructor. Testimonials speak to how AR has boosted the gamification and competitiveness of experiences, which any analyst will acknowledge taps into natural dopamine level spikes, not unlike the rush from new shopping experiences and purchases. So, as far as AR in retail and commerce is concerned… let the games begin!