Now & Next: Augmented Reality

One of the fastest growing tech verticals out there, augmented reality (AR), is looking at a USD$90bn (£67bn) market by 2020 – a figure which, if met, would be 15-times greater than in 2016. It is fair to say, AR is stepping out of the shadow of its more immersive sibling, virtual reality, and retailers across the world are on hand to leverage its ability to engage any way they can. However, despite AR’s enormous potential within the sector, it seems retailers aren’t making the most of its capabilities just yet.

It’s worth noting that this would have been a drastically different piece only two years ago, before Pokemon Go brought AR into the mainstream and the possibilities it had to engage consumers was recognised. Because of this, the development of AR technology within retail has come on leaps and bounds since then. For years, the current applications of AR would have been considered something futuristic, which might only one day be reached – well, that day has arrived.

Body scanners & virtual stores

Retailers’ use of AR is largely focused on making online shopping match the in-store experience. One of the main issues consumers face when shopping online is the ‘imagination gap’ – they cannot visualise what some clothes will look like when they are wearing them, or what a piece of furniture will look like in their living room.

Amazon, perpetually on the lookout to grow into new verticals, have tapped into this gap to develop their fashion offering. Their purchase of Body Labs, a startup specialising in 3D body scanning and modelling software, will help fashion brands to get the right fit for customers using their app. While companies such as Bodymetrics have been designing body scanners for years, these are in the form of physical pods which are placed in stores, not from the comfort of a customer’s home.

China’s largest online grocery store, Yihaodian, are also showing us the potential for AR in retail, through their ‘virtual stores’. These consist of empty warehouses, car parks, and tourist spots, where consumers are led through virtual aisles with their smartphone. As products pop-up around them, they then have the option to click on the item, add it to their cart, and get it delivered to their home, turning shopping into an engaging AR experience, and eliminating real estate costs.

Fashion and food aren’t the only areas of retail that AR is revolutionising. Homeware has also jumped on the AR bandwagon, and sector leaders Ikea have been pioneering in this field. Their app, the Ikea Place, allows shoppers to tap through 2,000 products, then hold up their phone and use the camera to place the digital furniture anywhere in the room.

Consumer technology still isn’t ready

AR’s sensor technology has come on leaps and bounds since its first outings. For example, while Ikea’s app used to face issues such as getting the size of the virtual furniture right, and fitting them round real objects in the living room. Now it accurately represents texture, fabric, and even shadows. However, although AR technology is ready for retail, leading consumer-tech hardware manufacturers still have work to do.

While robust hardware like Microsoft’s HoloLens handles these apps nicely, day-to-day, mainstream technology like the iPhone has a little way to go before it can bring AR to the masses. Even Apple’s latest release, the iPhone X, only has AR-compatible sensors on its front-facing camera, largely to handle the new facial recognition feature. This is surprising, given that the wide-ranging uses of AR have been clear to see for some time, and suggests companies such as Apple didn’t bank on it achieving such popularity. Although there are suggestions that the rear-facing camera will soon be adopting similar technology, until this happens, we won’t see wide-scale use of apps such as Ikea Place.

AR will continue to improve

Virtual stores, such as the Chinese innovations mentioned earlier, will become more common. In order to take advantage of shopper interest in where their items are being sourced from, it is likely we will also see developments of technology which allows you to hold your phone over a physical object, and a wall of information on that item to be presented to you. This technology would work in a similar way to scanning a QR code.

Building AR for a mobile retail environment

It’s obvious AR could have a huge impact on how we shop in the future. However, with an ever-increasing proportion of shopping taking place online, it is here where AR functionality needs to be built. Customers want the ability to try out products on any device, on retailer websites, and on marketplaces such as Amazon.

There is also a desire for AR to be integrated into more websites, and a move away from dedicated AR apps, with 75% of consumers expressing this opinion. This would mean building the technology that runs apps such as Ikea Place, on Ikea’s mobile homepage.

This means that retailers and marketplaces must start making their mobile pages AR-compatible. Shoppers want to use new functionality, such as AR, but they want it to be as easy as possible, instead of having to download an app.

The projected user base for AR in retail by 2020 is 9.5 million – by 2025, this number is predicted to rise to 31.5 million. These are promising numbers; but if we are to make good on these forecasts, then it is retailers and online marketplaces that must take up the slack, and prepare themselves for an AR revolution.

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