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Role of Augmented Reality in Retail

By Rekha (Sasirekha) Ramesh, SVP, Global Head of IT & Digital Strategy, Daymon Worldwide

Rekha (Sasirekha) Ramesh, SVP, Global Head of IT & Digital Strategy, Daymon Worldwide

The success of Pokémon GO brought Augmented Reality to the center stage and provided retailers a platform to reach its consumers in many creative ways. With the prediction of $105 billion dollars’ investments expected in augmented reality, the market is set to capitalize on this technology.

Interactions, a leader in experiential retail marketing and part of Daymon, the global leader in consumables retailing, released “The Impact of Augmented Reality in Retail,” a study of more than 1,000 Americans in 2016. Insights drawn from the survey included that the shoppers will pay more and purchase more items due to augmented reality.

Tim Cook is very clear how Apple views AR as an incredible technology while Google’s Tango Platform and the Lenovo Phab 2 smartphone has shown the technology in action. While it is still debatable if AR will be the big feature of the smart phone industry in 2017, the technology is making inroads as more and more retailers are starting to adopt AR to create a more meaningful, memorable shopping experience. While augmented reality is undoubtedly interesting, it has not experienced consumer adoption in a similar fashion to Pokémon GO. However, it is starting to trend upwards and as more players like Apple and Google might help make it main stream.

“Although there are many AR apps which use interactive maps overlays and virtual showrooms, the apps are dependent on smartphone GPS and camera functionality to create more immersive experience”

Augmented reality technology and AR apps have limitless marketing and advertising potential for retailers. It provides retailers opportunity to converge physical store and online experience, improves marketing and advertising, which directs the user to the additional Web content, product video and coupons. Grocery retailers are using augmented reality to provide additional relevant information like nutritional information to the demanding millennial consumers. Augmented Reality enhances the path to purchase. “Try” or “Preview” capabilities can make an engaging situation making it easy to demonstrate a real product. This helps customers to scale view of products which helps visualize fit of a product (such as furniture) for their own place.

Augmented Reality will have profound impact on how we all interact with technology. Lego, for example, allows customers to use the kiosk to scan the box of Lego kit and show their children how the finished product will look like in 3D model. Hyundai allows hand-on, 3-D interaction for their customers to get familiar with their cars and learn how to perform basic maintenance.

Still, there are challenges and limitations in every aspect of AR including hardware components, 3-D capabilities, new applications, connected services, displays, tagged content etc.

One of the key limitations for AR adoption in retail is the rendering of digital data into meaningful graphics and scaling it to fit the visual field. For mobile phones and tablets, AR must work with limited processing power, limited memory, and limited storage. The weight, size, and power requirements of optical components can be expected to continue to improve.

While today’s 3-D capabilities have significantly grown, progress is also needed in accurate integration of 3-D audio, charts, images, and video in the display so they are intuitive, seamless, and responsive to user actions.

Compelling content tailored to the context and the user is critical for the adoption. Authoring those contents is complex and fragmented (across media types), and not well integrated. There are tools which are emerging to make AR technology accessible to more developers.

Mark Zuckerberg at the recent ‘F8—Facebook Developers Conference’ mentioned, “AR is going to help us mix the digital and physical in all new ways, and that will make our physical reality better,” echoing the trend we are seeing in the retail space where AR is used to converge the physical store experience and the online experience. Facebook might help companies to build augmented reality experiences by converting the camera app into a platform, through which information and digital objects can be overlaid onto a physical space.

Apple is also looking to make an augmented reality SDK available to developers. Asus is also introducing ZenPhone which comes with Google Tango technology. Although there are many AR apps which use interactive maps overlays and virtual showrooms, the apps are dependent on smartphone GPS and camera functionality to create more immersive experience. Hardware like a depth-sensing camera will be required to enable hardware based augmented reality. Apple is also looking to make an augmented reality SDK accessible to developers.

In Daymon, as part of our product designs, we are embedding recipe videos, product information etc. When consumers scan the image through an AR app, a recipe video will pop up with additional product information. For example, if we are creating a design for pasta, we embed recipe videos and when consumers play the video they can click on the “Buy” button which will transfer the ingredients into the shopping cart. This helps retailers to keep their shoppers engaged.

Consumers are increasingly expecting high level of engagement. This is challenging the retailers to provide more meaningful experiences to the shoppers. While this helps to engage the consumers, but effective usage of the technology to drive conversion optimization needs planning.

Augmented reality clearly has the power to influence retail. Ultimately, whoever provides the platform to host large share of augmented reality experiences will win the race. However, there will be some level of skepticism; we will see significant shifts in AR adoption in 2017.