Augmented Reality presents opportunities for brands across industries, but is particularly interesting in retail; this week, we look how it is beginning to transform shopping experiences.

1. GET RETAIL SMART
Transforming Retail
with Augmented
Reality

2. GET RETAIL SMART
Transforming Retail with Augmented Reality
Technology has revolutionised and disrupted the retail industry in recent years. The next
generation of technology offers category players the opportunity to drive the upcoming
transformation on their terms. Augmented reality (AR) allows retailers to provide
consumers with opportunities to preview, plan, and engage with products like never before,
improving the customer purchasing experience and boosting sales and loyalty.
“Over time, I think [having augmented reality features] will be
as key as having a website” –Tim Cook, Apple CEO1
Retailers are predicted to make an AR leap in the near future. 41% of consumers in the UK
and US already expect to be offered access to augmented reality in retail2
, and more than
half (51%) think retailers are failing to take full advantage of the technology now available
to them1
. 900 million smartphones are forecast to be AR-enabled globally by the end of
2018 3
, and as AR becomes a more standard and accessible technology, consumer
expectations for its application will only increase. AR therefore will become a must, as it
presents opportunities to add huge value for retailers and consumers alike.
TRANSFORMING ONLINE RETAIL
Online, AR provides retailers with vast opportunities to increase efficiency and drive sales.
Returns cost UK retailers an estimated £60bn a year, £20bn of which is generated by items
bought online4
. AR could help retailers reduce the rate of product returns (and thereby the
associated cost) by allowing consumers to preview a product seemingly in the physical
world before purchase.
AR could also help reduce the number of abandoned online shopping baskets, which are
currently worth an estimated £18bn to UK retailers each year5
, by making the experience of
previewing items much more compelling. A third of consumers say they would be more
likely to buy something after using mixed/augmented reality to preview products1
.
AR offers an incredible opportunity to better connect customers to products in a way that
has previously been difficult in online retail. Several retailers have developed apps to enable
this. L’Oréal’s Makeup Genius allows users to virtually try on beauty products on their mobile
1
Forbes 2018
2
DigitalBridge, Augmented Reality—Changing the Face of Retail, 2017
3
Digi-Capital, Augmented/Virtual Reality Report Q4 2018 4
UKTN, 2017 5
Barclaycard, 2018

3. GET RETAIL SMART
Transforming Retail with Augmented Reality
device’s screen. The app was originally lipstick-only, but after seeing an increase in sales
L’Oréal developed it further to include all types of makeup. The brand has since seen its
app be downloaded more than 20 million times6
.
Footlocker and BBDO NY released a Snapchat AR lens to
build engagement for the Gatorade AJ1 sneakers, prior to
their launch in December 2017. The campaign tapped into
the sneaker ‘unboxing’ trend, in which certain influencers
are given early access to products to build excitement,
and inverted it. Rather than allowing a select few people
to try out the product before launch, anyone could do so
via the AR lens. In the two days the campaign ran, it
gained over 4 million impressions7
.
BRIDGING THE GAP WITH IN-STORE
Opportunities around AR are not restricted to online retail. For instance, the technology
could transform packaging, providing shoppers with additional information about a product
and allowing potential questions to be answered in-store at the point of purchase. In July
2017, Dutch supermarket chain Albert Heijn launched an augmented reality scanning
application, the AH Product Scanner. The app allows customers to scan a sticker on a
product to reveal more information about its origin, ingredients, nutritional value and
suggested recipes. But applications are not purely functional - interactive packaging could
help bring brands to life, adding games, contests and content to packaging, making it a
viable touchpoint for customer engagement.
“AR is set to reconnect physical and digital retail.” – Greg
Jones, director of VR and AR at Google
AR can also preview a products’ potential true-to-life — a strategy trialled in certain Lego
stores, which house kiosks that allow customers to scan a product’s packaging to see what
it will look like, in 3D, after being built.
BRINGING ONLINE & OFFLINE TOGETHER TO DELIGHT SHOPPERS
For Christmas 2017, Australian retailer Myer used augmented reality to enhance its festive
campaign, created with Clemenger BBDO to tell the story of an elf at Christmas time. The
6
L'Oreal buys mobile app provider of digital makeovers, the Business Times, 2018
7
Digiday, Snapchats Programmatic AR Ads, 2018

4. GET RETAIL SMART
Transforming Retail with Augmented Reality
department store released a story book, seasonal
catalogues, gift cards and gift tags that could be
augmented using an AR app called Elfvision, to create a
much more engaging festive experience for families. The
campaign also included an AR treasure hunt across Myer
stores, offering a truly integrated campaign. Consumer
responses to the interactivity of the whole experience
were positive, with one customer commenting that “the
Christmas catalogue with its talking characters is a delight,” and another describing the app
and treasure hunt as “wonderful for young and old.”8
AUGMENTING OPPORTUNITY WITH AR
Leveraging technology for technology’s sake will do little to improve the customer
experience in a meaningful way —it is how this technology is used to enhance the customer
journey that is important. For businesses, AR can provide the opportunity to reduce costs,
increase sales, strengthen their brand reputation and engage customers. It can offer people
a more emotional and engaging shopping experience, where a certain level of risk and
distance associated with online shopping can be replaced with confidence and
engagement. The possible benefits of implementing AR technology in retail are abundant
and only expected to grow as the technology becomes more mainstream.
8
Apple ITunes Reviews

5. GET RETAIL SMART
Transforming Retail with Augmented Reality
If you are interested in learning more about the subject of this article, please contact
Sarah Emmerson, Insights Planner, emmersons@bbdoknows.com
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