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Augmented Reality in Retail

Thanks to the introduction of augmented reality (AR) development kits for iOS and Android in 2017, AR technology has successfully infiltrated the mobile realm and can now be widely and easily used for mobile app development. Although many people believe, that mobile AR works best for games, like Pokémon GO, or social media gimmicks similar to AR emoji in Instagram, in actuality, AR can bring the fun aspect to any kind of app and introduce advantages to various businesses. Retail is hardly an exception.

Below we give examples of augmented reality retail apps, describe use cases for specific types of retail businesses, and explain how AR functionality can become an intrinsic part of your brick-and-mortar or ecommerce store.

Augmented fitting rooms

Augmented reality can take the tedious part of changing multiple outfits or accessories out of the customers’ shopping experience. An augmented fitting room can give a person a tangible presentation of how a certain item (or several items in combination) will look on them. This way, a customer can easily decide whether they should skip the item or try it on in an actual fitting room.

To introduce virtual fitting rooms, stores should provide their customers with an AR mobile app that scans a person’s reflection in the mirror and augments it with a layer of clothing, footwear, or an accessory. By holding a mobile device in front of the mirror, a customer can try various combinations of items and inspect their augmented reflection up close and from different angles, which the augmented item will be automatically adjusting to.

AR fitting rooms

In case of an e-store, such an app should contain a complete catalogue of AR-enabled items that a customer can choose and virtually try on. However, a brick-and-mortar store will benefit from implementing a code scanner feature instead of a large catalogue. With the help of this feature, a customer can scan a tag code on the item they’ve chosen and have its AR model instantly downloaded to their device. This way, the app itself will be lightweight and easy for walk-in customers to install.

AR positioning and set-up manuals

The augmented reality shopping option can become a deciding factor for customers making large-size purchases, such as furniture, appliances, and cars. Since an AR app can scan a customer’s room (or a garage, in case of a car) and augment it with a life-size 3D model of the wished item, the customer will get a clear idea of whether the item’s style or size meets their expectations or not. Customers can also inspect the 3D model up close as if the item was right next to them.

The use of augmented reality isn’t limited to the pre-buying stage. The AR technology can be a basis for an interactive manual to assembling or setting up a purchased item. A customer will simply need to put the item parts in the focus of a mobile device camera – and the app will provide guidance by showing how to assemble the parts. Such an app will keep the positive customer impression lingering even after the purchase was made, getting you loyal customers.

AR-assisted navigation and consulting

An augmented reality app can play a role of a virtual assistant in a large shopping center. Instead of simply following a map blueprint, a visitor of any shopping mall can walk around with a mobile device in their hand and see set navigations, personalized suggestions or ads right on their screen. They can also trigger ‘search’ to ask the app to guide them to a certain store or product department.

AR-assisted navigation

In food retail, such AR navigation can be even more elaborate. When installing an AR app owned by a supermarket chain, every customer will be prompted to create their private profile with various food preferences, diet suggestions, favorite recipes, and grocery lists. Upon stepping inside the chain’s retail store, a customer will take out their smartphone, choose any of the modes in the profile (for instance, a list of things to buy or a specific recipe), and use the AR app while walking the isles or scanning the shelves. The app will help the user do their shopping in a faster and more convenient way by showing navigational arrows and displaying product details on the screen of a mobile device.

AR stores

Apart from offering augmented product models in an online or a brick-and-mortar store, your business can opt in for an AR store campaign. In other words, you can encourage your clients to download your app and then notify them about the location of a temporary AR store where you will offer a range of popular items at reduced prices or limited items.

AR store

By arriving at the specified location, customers will be able to use their AR apps to see the items in the real world surroundings – just the way Pokémon GO players see a Pokémon. Yet, your customers won’t be ‘catching’ items but putting them in the cart. You can offer a generous discount though, to pay your customers back for the engagement. After all, such stores are primarily a marketing campaign that will certainly draw huge attention to your business.

Retail store integration

Regardless of the type of an AR mobile app, integration between its back end and internal systems is always necessary. To let a customer view any item in an augmented reality mode, a mobile app should have access to the Product Information Management (PIM) solution where AR models are stored. PIM integration is also required for receiving the latest product information (such as product details, stock availability, and location) used by AR navigation apps.

For an AR app to be more than a mere catalogue and offer a seamless purchasing process with an actual check-out, it also needs integration with your existing ecommerce module.

Finally, you’ll need to set up a secure one-way communication between your mobile AR solution and CRM to enable mass mailing of notifications about special offers or an AR store location.

From a concept to reality

What makes it possible for a mobile app to augment real world surroundings captured by a device’s camera with life-like layers of images is auto-recognition functionality. All its steps, including environmental understanding, motion tracking, and light estimation, are a lot easier and faster to implement now that app developers have powerful AR development tools with already built-in recognition principles. Still, to ensure higher augmentation quality, certain settings have to be tuned individually for every app.

Implementation of virtual product models is a crucial part of AR app development and requires close cooperation between a vendor and a retailer. Upon receiving product images, 3D designers create an elaborate 3D model of every item and then let these models be added to the app by developers. Certainly, as your catalogue can be continuously growing, the vendor should be ready to regularly provide the 3D models of new items and upload them in the app.

Becoming a Platform-enabled Retailer

While iconic brands like Macy’s and Abercrombie keep recording significant losses, Primark, Aldi and Amazon have been a rousing success. These successful brands demonstrate that shiny technologies and omnichannel strategies are not a silver bullet.

Retail is about being a great merchant and having a differentiated product and experience. To win, you must move your retail strategy closer to your product, or closer to the customer. Preferably both.

The right strategy relies on deep expertise in technology to unlock the power of your merchants while using data to power the algorithms necessary to achieve efficient scale. The future is becoming a platform-enabled retailer.

The Department Store Renaissance

Exotic products, a rooftop garden, reading and writing rooms, reception areas for foreign visitors, and customer service at its best; this was the first Selfridges store in 1909. Carefully designed to become a destination, where those in the know visited to socialize, source style, and be inspired. These brands knew their customers and did whatever was necessary to satisfy their desires.

Department stores boomed in the 70’s and have survived in nearly the same format ever since. While some continue to thrive, the internet, shopping centers and specialty brands have weakened the department store’s control over distribution. In this new world, many department stores were left floundering.

But branded goods, product authenticity, variety, immediate in-store availability, and flexible returns are still key reasons for customers to shop at department stores. Building on these core principles will help keep customers flow through the door.

Department store operators must have the best customer data and algorithms for connecting customers to brands that will provide inspiration and create desire. They must have the best intelligence to deliver this inspiration online, in store, and out in the community. Their ability to work with large datasets and communicate desirable products to customers must be unrivaled.

Beyond this, they must provide real value to retail brands by becoming the most efficient same day distribution point, enabling brands to fulfill their customers’ desires with immediacy and efficiency.

Without these two elements in place their space is no longer valuable, and given the under-investment in product discovery, customer experience and localized supply chains to date, there is work to do.

How will this work?

The modern department store will be an expert in connecting to the customer through any platform – seamlessly managing sizing, outfit construction, price and desirability.

This fundamentally differs from today’s search-focused environment – where customers know what they want, and Google, Facebook and Amazon are all too happy to capture the transaction. The department store of the future will be deeply connected with their brands, defining trends, curating products, and creating the market for desire amongst their customers.

Brands will be happy to distribute their inventory through the department stores’ highly-automated micro-warehouses, or stores as we used to call them – now responsible for getting any product into a consumer’s hands almost immediately.

More than just fulfillment and discovery, the department store will enable smaller brands to access inventory sophistication they’d never dream of achieving alone. Using blockchain, these brands will be connected to stores, warehouses, and suppliers as well as learning algorithms, to predict the lowest cost replenishment for all parties involved.

Department store as a platform graphic
None of this works without getting closer to the customer’s purchasing decision, and reducing friction in the experience. Brands, such as Massimo Dutti, who are testing new ways of creating desire using augmented reality to mimic product curation of a physical store in an online environment – aren’t wasting their time. The data gained from these experiments is a competitive advantage in knowing when, where and how to invest in developing algorithms and new interactions.

The Future of Food

Since the 1950s, there have been many incremental improvements in grocery stores, but the fundamentals are the same. Grocers derive profits through simplification, scale, and controlling access to shelf space – where suppliers go through a battle royale in paying supermarkets to be discovered by the consumer with each trip down the aisle.

Consumers needs are changing, they are demanding a wider variety of food experiences. Whether pre-made, organic, gourmet, more convenient formats or from local suppliers, these complexities gobble margins and are tough to scale. Just ask a restaurant owner.

For the first time in our lives we are now in a position as consumers where we can start to utilize sensors to track food freshness, provenance and the chain of custody through the supply chain. This level of transparency adds more complexity, placing pressure on the current paradigm of static pricing.

San Francisco startup Innit has already brought the connected kitchen concept to life at Pirch Store in SoHo NYC, so such an open platform may become a reality soon. Grocers need to look at their business as a platform, and build interfaces that allow them to be a part of this new ecosystem.

Above: Innit’s Connected Kitchen Live demo at Pirch Soho, NYC.

These emerging appliances reduce the effort required in making meals at home with available produce, delivering high-quality food and a frictionless shopping experience. This is the start of an ecosystem that will highlight how little connection today’s grocers have with the home and the consumers within it.

In the United States, 2015 was the first year in which more money was spent on food services outside of the home than through grocery chains. This shows a fundamental shift in how people make their food decisions. Food is no longer primarily the domain of the supermarket.

The supermarkets of the past have won through scaling simplicity, controlling distribution, and relying on controlling information from both the consumer and food suppliers.

The winners of the future will be food ecosystems. Those ecosystems who move closer to their product by connecting consumer data right back to the decisions made in the paddock to significantly reduce waste.

Amazon seems to be winning the battle with its Amazon Go store, but nothing is settled yet. The real question is why today’s grocers lack the urgency to innovate their way into the pantry, or modernizing access to food within communities.

What’s next?

In the coming months, we will continue to hear about the death of retailers in the ‘messy middle’. To avoid this identity crisis, retailers must focus on the changing reality of the modern economy and become part of the consumer revolution.
So make your choice.

Are you going to move closer to your product? Differentiate your product from the market and add value with a real-time supply chain, and introduce an effective platform to enable suppliers to continue to innovate and share in your margin.

Will you move closer to the customer? Supporting your partners and suppliers with an unrivaled customer experience. Driven by your product discovery engine – where you deftly delight your target audience, creating desire across your physical space, salespeople, mobile and social platforms.

Or do you already do both? Today you’re the lucky ones, working hard to scale your brand into the global marketplace.

But beware, Amazon, Facebook, Alibaba and others are seeking to conquer your brand – you must remain paranoid. The only way to get close to your product and your customers is to become a platform-enabled retailer.

This article was originally published in Inside Retail’s Future of Retail report for Inside Retail Live, APAC’s retail conference and expo.


Mobile-enabled augmented reality can transform the entire concept of shopping and significantly improve customer experience. Previewing AR clothing items will save time and energy for shoppers who want to try out various looks and combinations. The possibility to fit an AR model of a furniture item or an appliance in a customer’s interior can become a decisive factor for the customer who considers making a purchase. Moreover, AR can become a helping navigating tool in a shopping mall or even an effective marketing campaign when used for creating an AR store.

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