With the large number of stores closings across the U.S., it’s easy to believe that brick-and-mortar stores are dwindling as online retail takes over. However, a closer look at shopping behavior of 46,000 consumers reveals that:
- 20 percent are online-only shoppers
- 7 percent are store-only shoppers
- 73 percent of shoppers use multiple channels
This clearly implies that it is no longer about the channel being used. The line between online and offline retail is blurry, as customers are willing to switch to different channels depending on their need and the experience they get.
The idea of “new retail” is to bring a new level of experience for customers by blending the digital and in-store retail experience. Several top retail players like Alibaba, Target, Walmart and Amazon are focusing on providing an integrated, seamless customer experience by leveraging new technology trends to stay ahead of the game.
One such technology that is widely used is augmented reality (AR).
The power of AR is such that it enables customers to gain an interactive experience of a real-world environment using computer-generated perpetual information. This offers the following benefits:
- AR enhances the customer experience. Through AR, customers can try on products before buying them. By simply sitting at their home, they can try different variations of the products, e.g., sizes and colors. Once they are satisfied with their selection, the exact item is delivered to their doorstep. It basically offers the convenience of online shopping with the experience of physically interacting with the product.
- It reduces the need for in-store staff. Retail shops can use AR to cater to customers’ needs to try out different products without in-store assistance.
- AR reduces in-store inventory. With the use of AR apps, retail stores can reduce in-store inventory, thus minimizing costs for shipping and storing a large inventory.
Editor’s note: Looking for an e-commerce website design service? Fill out the below questionnaire to have our vendor partners contact you about your needs.
Here are some examples of retailers already into the game and how they are using AR to their advantage.
In 2016, Ikea, the world’s largest manufacturer of furniture, generated a global revenue amounting to approximately 35.7 billion euros, a massive increase in revenue compared to previous years. Much of the credit for this increase is due to Ikea’s AR app that saved people a visit to the store.
Ikea Place takes the guesswork out of the shopping experience by allowing a user to scan the area of the home they want to buy new furniture for. The app then shows the user how the furniture will look in their space.
The North American clothing brand took a bold, yet intelligent move by launching their augmented reality app. Using the app, a user can scan the physical image of the in-store item. The app then provides information like customer reviews, color and size options, and more. Customers can also purchase the item and have it delivered to their doorstep.
The French clothing brand Lacoste enables customers to virtually try on the brand’s shoes. By using their app, customers can see the fit of different shoes and try on different colors. This helps Lacoste greatly reduce the need of in-store workers while enriching the customer experience at the same time.
Using its Shoe Sampler app, customers can simply point their phone camera at their foot, scan their foot and then see how different types of Converse shoes would look.
Leveraging AR for Small Businesses
Because AR is currently being used by large enterprises to offer novel customer experiences, the concern is that it is too expensive for small businesses. However, building basic AR applications like virtual tours and object recognition are not exorbitantly priced. While enterprises have their own technology teams, SMBs can collaborate with freelancers or small development firms to build low-cost AR applications.
The key for SMB retailers is to choose basic AR functionalities but leverage them in a creative manner. For example, a boutique apparel store can build a simple object recognition app that gives users the ability to click images of clothes they like on the screen and find similar options available at the store. So while the basic tech being built is simple and relatively low cost, the level of interactivity and convenience it brings to its customers is highly valuable.
Yes, AR applications will need more investment by the SMBs in comparison to their other channels, but it makes business sense for them because:
- An AR app is a novel addition/offering that can make you stand out from your competition. Also, if you have an e-commerce app, the existence of the AR component gives users more incentive to download your app over those of your competitors. In the process, your brand is now able to stay front and center for the customer, especially when you offer regular deals and notifications, not to mention it can increase brand loyalty.
- The use of AR technology can integrate both online and offline retail to provide the best possible user experience. The next step of retail transformation will be retailers expanding from brick-and-mortar or online identities and working to offer this integrated experience.
Much like the physical retail outlets offering digital experiences, Amazon and Alibaba are and opening stores. In the near future, we are bound to see more of these expansions, and AR is one of the primary technologies bridging the online-offline divide and being leveraged in innovative ways.