When it comes to augmented reality (AR), a rising tide floats all boats. When consumers play Pokémon Go or a promotional game, they become used to the capabilities of AR using their personal technology. For the retailers, that then creates a new audience of consumers ready and willing to be marketed and sold to using AR – provided that you can wow them with your execution.
AR’s use in retail is currently in its infancy. Fashion and cosmetics brands are ahead of the curve, with homeware and furniture brands not far behind. Those verticals are in the lucky position that consumers are habituated to using their mobile devices to discover and purchase those items already: other FMCG focused brands typically use AR for brand-awareness reasons, rather than as part of the purchase funnel.
Despite its relative newness for retail, it’s clear that AR shopping is the recipient of some serious investment from major players. In July, Snapchat – looking to solidify its market leader position in mobile e-commerce – acquired AR asset creation company Vertebrae. The company’s specialism is in creating 3D digital assets of real-world items, which removes a barrier to entry for many retail brands looking to open AR storefronts.
It follows Snapchat’s promotion of its next generation of AR spectacles in May of this year. SPS 2021 launched with great fanfare and collaboration with influencers across its platform – testament to how much stock the social platform is putting in AR as a commercial proposition.
Google, too, is investing in the technology on behalf of its advertising partners. Working with Modiface and Perfect Corp, it has previously built AR try-on tools into its app directly. This allows Google itself to retain control of the ecosystem while also allowing the brands that advertise with it to reach the new tranche of tech-savvy consumers directly.
Modiface, which was acquired by L’Oréal in 2018, has also taken advantage of the demand for AR during lockdown to launch what the beauty brand touts as ‘the first digital makeup line’. The filters, which apply virtual makeup during calls, were launched under the Signature Faces brand across Snapchat, Instagram and Google Duo.
The extent to which L’Oréal sees AR factoring into its future strategy was made plain by its chairman and chief exec Jean-Paul Agon, who said in 2018 that the acquisition was “a major milestone in the transformation of L'Oréal into a digitally augmented beauty company”.
Major retail brands, too, are recognizing that AR can be used to grease the sales funnel. Ikea and Apple have made inroads into AR product catalogs with apps like Place and its Space10 experiment, which allow users to effectively see what its furniture would look like in their homes.
Space10’s digital design lead Tommy Campbell says that the goal is to develop for platforms like AR spectacles, as well as apps: “We’ve made very deliberate decisions to paint the vision of Studio as one that can exist on both the smartphone or in a glasses-like setting. We’ve also used a new renderer reality kit from Apple that lets us achieve a level of detail on these models that hasn’t been seen before in Ikea’s AR portfolio.”
Sam Watts is immersive partnerships director at MakeReal. He explains that retail brands are also using XR to improve their in-store retail environments:
" One popular use case for immersive technologies within retail beyond just consumer attraction and purchase is studying their behaviour. Many studies have been carried out and a variety of tools exist to enable retail to monitor eye-tracking and gaze, enabling them to define prime shelf positions, test out new standees, store layouts, shop front appeal and much more.
"Platforms are in development that will help consumer navigate around stores more effectively. M&S is trialling a system where augmented directions and products are highlighted based upon a customer’s shopping list, helping them efficiently traverse between aisles to minimise their time in-store or find everything on their list (assuming there’s enough drivers to deliver the stock to the store)."
Augmented reality, then, is creating both new products in themselves and allowing for more effective selling of existing lines. Its place in the retail landscape will only become more prominent as consumer technology evolves – but there are still some opportunities that are yet to be tapped.
The artifice of retail AR
Tom Ffiske is a VR and AR marketing expert. He argues that AR is entering mainstream retail behavior as the result of web AR tools that remove the hassle of downloading specific apps from the consumer: “Almost certainly the future is web-based augmented reality. And that's for a few reasons. One is if you can access [an AR execution] via the web browser of the phone, you immediately have access to more phones for your campaign. You just scan and go, you don't need to download an app, which is so important.
“The second reason is tracking. You can track visitors’ experiences through how long they stay on the app, which is a really good engagement stat to bring back to the client, as well as the fact that they clicked through certain links to their site, and showing the sales funnel they came through as well.”
For those brands looking to go deep on AR in retail, that performance focus is vital. Despite all the work that has gone into lowering the bar for entry, Ffiske says that augmented reality is still an afterthought for brands during the marketing process. While virtual reality has its place in experiential pop-ups within retail stores, the value of AR is that it allows those brands to track consumer activity after the sale itself. “You can have activation within the retail store packaging, because the nice thing about packaging is you don’t just have stats on when they pick up the item… you can see the habits when they’re at home.”
He also flags that some of the biggest players within the space are collaborating on products that will encourage the adoption of AR more widely. Facebook, for instance, is working with Pokémon Go developer Niantic on a 1:1 recreation of the real world, with Niantic’s senior director of engineering Joel Hesch stating: “We’ve primarily been focused on first-party games and applications, but we are very excited about extending the platform to be something that more people can use.”
Watts explains: "Once what is possible today through mobile [in your hand] is available in a device close enough to the size and weight of my glasses, allowing us to operate hands-freely with enhanced superpowers beamed directly to our retinas, then we can truly see what will be possible as we traverse around the world."
It is still too early to declare that AR will become part and parcel of the retail experience. While most indications are that it has a place for specific verticals, that isn’t to say that we can or should expect FMCGs or other consumer-focused sectors to leap into the space. What is clear, however, is that consumers are more than happy to try augmented reality as part of the purchase process for many of their most high-end or luxury items – and that brands are only too willing to accommodate them.