Applying Augmented Reality to an Omnichannel Retail Environment

September 12, 2016         By: Sean Riley

Virtual reality (VR) has been grabbing headlines this year with major players across a number of industries entering the market.

But there is evidence to show that augmented reality (AR) may be a more valuable platform in the years ahead. Digi-Capital, an advisory group in VR and AR technology, released projections earlier this year putting potential revenue from VR and AR combined at $120 billion by 2020, with AR alone responsible for approximately $90 billion. It’s these estimates that have companies taking a serious look at AR.

So what exactly is AR and what are the potential applications that could help take it from a small niche to a multi-billion dollar industry in just a few years?

What is Augmented Reality?

VR involves a complete takeover of the user’s visual (and in many cases auditory) senses, which can be both a strength and a weakness. AR is capable of much more subtle experiences and has wider potential applications as a result. As the name suggests, AR is superimposing graphics, audio, and other sensory enhancements over a real-world environment in real time. These experiences are typically achieved through a smartphone or tablet, but dedicated AR stations also exist for specific use cases.

A Picture on a Picture is Worth a Thousand Ads

One of the most common and recognizable implementations of AR today is seen in apps, which overlay images using a smartphone’s camera. Furniture retailers were early adopters of this technology, allowing prospective buyers to browse their catalogs on a smartphone and then hold the mobile device up to see what a couch or desk would look like in the actual intended space.

Brands targeting younger markets have been quick to adopt AR to deliver engaging experiences as well. One popular toy brand offers in-store stations with a camera and display — when shoppers hold up the product box to the screen, it shows a three-dimensional representation of the finished project. Showing the flexibility of AR, this same concept is being applied in high-end fashion stores to display clothing or make-up on a customer in so-called “magic mirrors” removing the need to physically try anything on. Popular footwear brands have introduced similar functionality in their smartphone apps.

“Online retailers are taking examples from other industries that have begun leveraging AR, such as the travel and real estate industries, and are now introducing these novel and enhanced customer experiences in store environments or in their apps,” said Amy Parsons, Vice President of Global Commerce at Discover. “It is an exciting time for the retail and payments industries as we collectively explore AR and VR opportunities and how, together, we could soon deliver a completely new shopping and payment experience in the virtual world.”

Teaching Old Media New Tricks

While some AR still sounds like science fiction, even simple concepts can deliver enhanced experiences that have proven to increase customer interaction with advertisements. Theater chains, hotels, and office supply companies have all reported increases in engagement after implementing AR strategies. Implementation can be as simple as an app that triggers a video or alternative experience when shoppers scan a traditional print or online ad. Further product information can also be triggered using location-based technology.

Omnichannel Success through Augmented Reality

For retailers looking to enhance their omnichannel retail strategy, AR is a potential path to that goal. Shoppers already have their smartphones out — taking over that screen’s real estate with AR content can deliver the information that will grab consumers’ attention and keep them focused on making a purchase. For both in-store and online sales, AR could offer advantages over more traditional advertising efforts. Due to it being in early stages, it could serve as an attention-grabber for retailers looking to deliver novel new experiences. It also provides interesting potential benefits to customers – such as allowing them to “showroom” a product at home, or see a product in its future environment, helping them to make more informed purchase decisions.

This article was brought to you by Discover Network. For more insights into consumer trends and the world of payments, visit Discover Network Perspectives.