The Future of AR in Retail
By Richard Gearing

By definition, Augmented Reality (AR) is intended to make reality ‘better’ by adding to it through overlaying a technological activation; but it is technology which presents an interesting paradigm.  

There aren’t many other tools that carry the same wow factor or sense of enthralment as a well-executed, slick and engaging AR campaign. But, given that it offers so many avenues of execution, in a retail environment, how do you decide what to help it best achieve for you as a brand? 

First, let’s look at the capabilities & potential.
Driving Brand Visibility
Although it appears to have disappeared almost as quickly as it arrived, arguably the most famous execution of AR must be Pokémon Go.  The very mention of it conjures up images of all walks of life chasing around towns, shops, parks and the countryside—quite wildly, to the uneducated observer—hunting various characters that you can only see with your phone in your hand.
Perhaps almost as famous and certainly with greater longevity is the Ikea Place app. People often use this to play with putting Ikea furniture in their homes, even despite having zero intent of buying any of it.  The very fact that this capability exists makes people want to give it a try—and more than likely has resulted countless times impulse purchases.
Alternatively, you may have seen the impressive Pepsi AR bus stop where creatures seemingly appear through holes in the pavement, or wild animals appear to be casually prowling through London. In this execution, the bus stop itself is brought into service as the screen, making great use of already-existing infrastructure to execute a very engaging campaign (seriously, the reactions are a must-see).

Creating Accessibility
Then there’s events like fashion shows, where the same model walking down a catwalk can be seen by hundreds of people across numerous locations, thus extending the reach and breaking down some of the barriers, both physical and figurative, that often exist with such events; be that logistics and location or job role and status.

Designing Educational Opportunities
On a more functional note, AR is being more widely used for education and training. From T-Shirts that help children learn about the body to product training for sales teams, the capabilities here are almost endless; and the cost of the development of AR training modules could quite easily be offset by the time and money saved in employing someone to train, even if they are only doing so remotely. Time zones become irrelevant in scheduling training as the AR modules can be used on-demand and updated as products develop and improve, without having to invest more time re-training the trainers.

Now let’s bring those capabilities back to a retail environment.
Trying on Products
When it comes to fashion, the latest AR tech in retail—and arguably the obvious execution—enables store customers to ‘try on’ clothes, shoes and accessories without even going to a store, let alone the hassle of actually visiting a changing room with an armful of clothes. Be it Timberland, Levi jeans, shoes at Foot Locker, or Michael Kors sunglasses, you can virtually try things on and decide what to buy, and, in some cases, even scan your body to get accurate sizing too. 
Cosmetics brands like L’Oreal, MAC and Sephora all offer AR solutions that enable consumers to test makeup shades. This kind of execution can be implemented as an at-home experience via an app, or as an in-store solution via a ‘magic mirror’. Whilst this may, on the surface, appear to be all about serving the consumer, there are hidden opportunities here as less product gets wasted as test samples, thereby potentially improving profitability as well as providing a sustainability benefit.

Simplifying Commerce In-Store and Online
In-store navigation has also been adopted by many retailers, enhancing the consumer experience by making it easier to find what they’re looking for. Finding a product is no small task in stores like Harrods in London or Macy’s in New York, who have implemented in-store AR in their world-famous locations as a part of an app interface which also includes stories, online shopping, and rewards.
Even Etsy now enables consumers to test paintings in their homes via AR. This presents a real opportunity for the small-scale artists who use this platform to sell their work, as purchasing a piece of art is no longer a ‘shot in the dark’ for the consumer.
In the US, Walmart has tested the use of AR to check inventory; and others are doing the same. In this application, scanning a product or shelf tag could advise a store assistant of the stock levels of a particular product and to tell them where that product is kept in a stockroom to be able to retrieve it quickly and easily, thereby minimising waiting around for the customer and maximising their efficiency as a shop floor salesperson.

Promoting Sustainability
AR also presents the potential to share sustainability and recycling information. Sonoma County Winegrowers are one example of this, utilising an app that has been created to promote their drive to become a 100% sustainable wine region. 

And what about the opportunities?
Integrated E-Commerce
If 51% of people were willing to use devices to assess products in 2019, imagine what that figure is now, particularly during and after a global pandemic which massively accelerated widespread adoption of e-commerce.  
It’s hardly surprising either. As our smartphone screen sizes grow and websites become more mobile-first in design, using a phone to research a product, find out about a service, book a holiday or grocery shop is no longer an afterthought or second-rate experience.

Higher Conversion Rates
Even when we do visit stores, huge proportions of customers prefer to research on their phone whilst in the store to find out more about a product than to speak to a retail assistant. Whilst this raises the challenge of whether retail assistants are required anymore, what if those assistants could help further facilitate the AR experience? Perhaps by offering the customer a tablet to experience a product via AR, supported by talking through the product options, translates to the experience becoming a point of purchase touchpoint.
AR engagement is quantified by Shopify, who claim that products supported by AR content carry a 94% higher conversion rate versus products that aren’t. This essentially implies that, all other things being equal, an identical product with no supporting AR content carries only a 6% chance of being chosen. Whilst this likely doesn’t apply equally across the entire retail environment, that is still quite a compelling case.

Environmental Understanding
From an environmental sustainability standpoint, there is a great opportunity to educate users about recycling and sustainability initiatives, even sharing what might happen to materials once they have been recycled. Such solutions may not require a full-blown AR campaign but could instead take a Connected Content approach to activate a web portal, which would be quicker, easier, and cheaper to update and maintain as legislation changes and recycling capability advances.
In addition, and as touched on earlier, sustainability benefits could come about through AR providing opportunities to prevent wasting product too; and is obviously also an opportunity to share the sustainability initiatives and performance of a product, a store or a company.

What are the challenges to overcome?
Universal Accessibility
Barriers to entry are diminishing. Smartphone battery life is increasing as is recharge speed and mobile computing power. App ecosystems have become more integrated, user-friendly and inclusive. 5G rollout is also accelerating globally, making mobile technology faster and more efficient. In-store tech installations have also become less obtrusive and more discreet.
One user frustration is that of each execution of Augmented Reality seeming to require a new app download. That is also beginning to change as AR development moves toward browser activation, thus eliminating another step in the process in making the use of AR more seamless.

Limited Pack Space
From a packaging perspective, real estate on pack can be an issue. AR is not yet ubiquitous enough to be expected anywhere and everywhere, so when AR or Connected Content solutions are used, space on pack needs to provide awareness. The trick here is in executing the activation device (e.g., a QR code) in such a way that integrates with existing pack elements. This is where our experience with Digimarc coding can really play to its strengths as the whole pack becomes scannable as the activation device, whilst the messaging can be as small and discreet or large and obnoxious as you like.

Product Perception
For AR in cosmetics, the lighting that the consumer is using comes into play too, particularly for apps and AR tech that are used to suggest makeup shades. Just like when we approve print on packaging for a client, the light used to check the colour has a critical impact on how the colour looks in real life, meaning the product they receive may not match the expectation that the AR experience depicted.
And then of course trying on those sneakers in Foot Locker via AR only tells you how they look. How they feel and whether a particular size feels too big or too tight is not something that AR can replace.

Privacy Issues
Finally, nervousness around the privacy of user data is becoming prevalent in this space, particularly where biometric scanning may have occurred to obtain body shape for clothing, for example. Reassurances regarding the use of that data, who can access it and what is recorded need to be made clear to ensure consumer confidence is not eroded.
In a world where a Chief Data Officer and Chief Digital Officer are becoming more common C-suite roles, technologies like AR will only become more prominent, more powerful, more engaging, more exciting, and more essential for a brand to compete. AR and Connected Content also presents different ways to compete and different avenues to excite and engage, though, so the confidence of how best to execute an AR solution to maximise those factors is key. That is where consultative support with your creative partner can really make the difference.
As good as AR is, something to consider is whether it is actually the right solution for the application or execution. Other Connected Content solutions could serve the need equally well—or even sit alongside an AR activation to provide additional messaging, storytelling and sharing opportunities.  

About Richard Gearing 
Rich has spent nineteen years working in packaging-related roles spanning FMCG/CPG, pharma, food & beverage and retail. He supported SGK's global rebrand and is currently immersed in Sustainability. As a member of SGK's Consulting group, his work involves identifying opportunities to simplify client processes and ways of working, finding ways to amplify efficiency and speed-to-market and generally looking for ways to 'do stuff better'. Rich is a certified change management practitioner.