Augmented reality (AR) is an evolving technology but is your business ready to make the most of it?
Augmented reality is one of the fastest evolving technologies, but many businesses aren’t making the most of its potential. Often, reports focus on the gimmicky aspects of AR instead of the ways it can revolutionise organisations when properly implemented. This has left many brands wondering where their money should be invested and where their business stands in an AR industry.
AR: A growing opportunity
There’s no denying that the audience for the technology is rapidly increasing. A 2015 study by Tractica found that AR apps, on average, get 342.8 million users worldwide every month. It goes on to estimate that by 2022 that number will grow to a whopping 1.9 billion. This is backed up by eMarketer, which found that around 40 million people in the US engaged with AR each month in 2017 – and this figure could grow to 54.4 million by the end of 2019.
Digi-Capital also sees AR growing hugely over the next few years, specifically on our smartphones. The firm predicts that the installed base for mobile AR could top three billion by 2021 and believes that – while other forms of AR look set to grow as well – this is where the main value lies.
This can be seen in the rapid advancement of AR tech in everyday mobile phones. Apple’s introduction of ARKit with iOS11 shows this, and the inclusion of AR in smartphones is also making AR unavoidable. Meanwhile, Google is also active in this space with ARCore, building on its Tilt Brush credentials and working with Novel to let developers build AR apps that can respond to 2D images.
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Getting left behind
Some have asked if AR is going to be another nail in the coffin for traditional retailers and the short answer is, of course, no. Technology is never deterministic, and there’s nothing about AR that would prevent physical stores from continuing to succeed. However, retailers need to adapt to this new tech, or risk being left behind.
This is especially true when you consider the fact several online retail brands are already making use of AR. Ikea uses AR technology to allow users to picture its furniture in their own homes, preventing them from having to worry about pesky things like measurements.
Amazon has also dipped its toe into the AR world with its Amazon AR View app that does a very similar thing for its own range of products. Considering that a major pain point for online shoppers is not being able to picture the item they’re buying, these apps create a major advantage over their competitors.
US retailer Target also launched an AR feature on its mobile site, although the launch of that was something of a disaster. And physical stores have reacted to this with their own apps.
“When customers can see virtually how products will look or function in a real setting before buying them, they have more accurate expectations, more confidence about their purchase decisions, and greater product satisfaction.”
- Michael Porter and James Heppelmann, Harvard Business Review
These ‘virtual commerce’ apps help e-retailers address the practical problems their consumers face when buying online, by bridging the gap between the physical store and the digital world. To avoid being left behind, brick-and-mortar retailers need to think ‘phygital’.
Physical stores should be treated more and more like flagships. They’re a critical factor in the marketing arsenal to help brands spread their business identity. If you need any more convincing, just look at how Apple uses its retail outlets. Physical stores are a very real way of turning estates into destinations for brand experiences.
Something that Inditex, owners of Zara, have embraced. They point to the success of AR and hologram innovation as part of their reinvention. Group CEO, Pablo Isla noted recently that the “strength of the integrated store and online model, bolstered by continued innovation, is driving growth and notable job creation”.
In March of this year, Inditex began rolling out new in-store technologies at key concept stores around the world. Some of these innovations include augmented reality and hologram displays. An AR-equipped app rolled out in late April enables users to bring flagship store windows to life with models showcasing the latest collection; customers can click straight through and buy the product.
While overall sales grew just 2%, the company’s realignment to e-commerce was reflected in the fact that online sales increased 41%.
It’s clear that there’s great potential for brands when it comes to using AR but the Target example highlights just how important it is to execute it properly. Retailers can specifically amplify their store experience with digital solutions, allowing the customer to get one step further in the buyer cycle with little effort and without having to leave the comfort of their own home.
However, the possibilities of AR don’t end there. Businesses are embracing the technology and its variety of applications. AR is being used to improve internal workflows and close the talent gap, as well as helping phygital consumers interact with a brand new environment.
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