With the global market anticipated to grow to USD$198bn (£149bn) by 2025, it’s clear that augmented reality is far from another marketing fad. Recent developments – such as the launches of Apple’s ARKit2, Google Lens, and ARCore – mean that augmented reality experiences have never been more accessible for both consumers and brands alike. In this piece for RetailTechNews, Jeremy Pounder (pictured below), futures director, Mindshare UK tells us how, for retail, an industry in the throes of change, the technology could offer a lifeline for reaching consumers in brick-and-mortar stores, and beyond, driving sales and delivering a differentiated customer experience.
Outside retail, the potential of augmented reality is already being explored in earnest – and has been for a few years. The gaming industry, for example, has long-since used AR to create sensational user experiences. Who can forget the summer of 2016, when the streets and parks of every major city were suddenly home to smartphone users with a very serious addiction to Pokémon Go?
In contrast, retail seems to have taken a slow and steady approach to integrating the technology into existing customer journeys. IKEA and Amazon are among the notable few that have begun to experiment with AR to boost discovery of their products, and with relative success. The launch of IKEA Place earlier this year was very well received, with their AR plugging a hole in the customer journey by allowing users to ‘try before they buy’ and visualise how furniture would look in their homes before making a purchase.
However, with almost 70% of consumers expecting retailers to launch an AR app within the next six months, coupled with ever-falling footfall on the high street, it’s clear that retailers across the board are under added pressure to use the technology more proactively and imaginatively.
Jeremy Pounder, Futures Director, Mindshare UK
To date, augmented reality has been predominantly used for entertainment – surprising and delighting users, as opposed to delivering utility. Nonetheless, the technology has managed to reach an impressive audience – Snap’s dancing hot-dog, for example, has been played more than two billion times in just over 12 months.
For brands, this reach is further amplified by the quality of engagement it delivers. Research Mindshare conducted in partnership with neuroscience research company Neuro-Insight, found that AR experiences delivered almost double the levels of engagement of their non-AR equivalent, bringing home how effectively the technology could add value to existing brand content.
The real potential of augmented reality, however, lies in its ability to drive memory encoding – the process by which a piece of content is stored away into long-term memory. This is crucial for brands; a piece of content can be engaging, but it won’t be effective at driving sales if the brand isn’t recalled along the path to purchase.
The research we conducted with Neuro-Insight revealed that the part of the brain responsible for memory encoding sees 70% more activity when experiencing the AR version of a piece of content compared to the non-AR equivalent. Crucially, this suggests that the technology could be leveraged not to just delight consumers at the discovery phase, but to boost the bottom line at the purchase phase as well.
Thankfully, the customer desire to engage more frequently with AR experiences in a retail environment is very much there. A recent survey we conducted found that a third of UK consumers believe that the technology could streamline their shopping experience, eliminating friction that is so often a barrier to purchase.
Over half of the same group surveyed showed a desire to be served relevant, contextual information through AR, with 55% agreeing it would be beneficial if they could access additional information just by pointing their phone at a product. With chatbots and digital assistants already preempting consumer needs elsewhere, it only makes sense that retailers follow suit, by using AR to deliver everyday utility in a particularly powerful way.
The challenge for retailers, then, is to work out where and how AR should be incorporated into the customer journey. The good news is we are reaching an inflection point, with recent innovations bringing AR experiences more in line with consumer expectations, and consequently transforming even the most analogue of touchpoints.
Beyond using apps to help consumers visualise big-ticket items, for example, we’re likely to see retailers begin to layer AR experiences onto existing physical assets, from storefronts to point of sale. Indeed, it’s likely that connected packaging will emerge as one of the most valuable ways for retailers to connect with consumers both pre- and post-purchase, with billions of household items creating the opportunity for retailers to add an additional layer of immersive reality onto the physical, and reach consumers both at home and in-store.
This would allow retailers to add value at new points in the customer journey, where previously accessing the brand may have been tricky. Perhaps most exciting, however, is the potential to create ‘shoppable’ AR experiences, allowing consumers to buy directly from the AR activation. The technology in this space is still nascent, but retailers can take heart in the knowledge that key players like Snap are already making significant headway – expect visible leaps in where this technology could take us in the next 12 months.
Smartphones have allowed consumers to experience AR in varying capacities for the past decade; and with an ever-more accessible developer infrastructure, and increased focus from the likes of Apple and Google, AR is set to become more deeply integrated into mainstream life. Consumer expectations are likely to shift in tandem; it’s not a stretch to anticipate a desire for even the most basic of shopping experiences to be underpinned by an element of AR in the next two to three years. If retailers want to stay ahead, it’s imperative that they not only work to get first-mover advantage, but also begin to push the boundaries of the technology – AR might be surprising now, but it won’t be for long.