How technology is transforming the retail landscape

Augmented Reality (AR) is slowly becoming more popular within the retail sector with an increasing number of brands looking at what benefits it could bring whilst weighing up its risks.

In this article, our experts tackle some of the frequently asked questions on the topic of AR and its use in the retail space.

Firstly, what is Augmented Reality (AR)?

Augmented Reality (AR) is a technology that combines the digital and physical world by projecting a computer-generated image on a user’s view of the real world. In the context of the retail sector, this technology is predominantly used to enhance customer experience by, for example, showing prospective buyers how a furniture item could look in their house before they make the final purchase.

How is technology transforming the retail landscape, specifically with the rise of AR?

Augmented Reality (AR) is not a new technology, but we have noticed an uptick in its usage in the retail sector recently, which is signalling that whilst it hasn’t achieved its full potential yet, there will be more developments made. AR has transformed the retail sector by allowing retailers to bring their products into people’s homes, whether that is furniture retailers using AR to show how their items could look in a room, cosmetic retailers applying their products directly to people’s videos or clothing retailers allowing customers to try on their latest fashion items at a click of a button.

The opportunities AR could bring are not fully crystalised yet. For example, there is more space to grow the technology in physical stores with smart mirrors, or in supermarkets where AR could be introduced to ‘talk’ to people about the nutritional benefits of the foods they’ve selected, or to suggest recipes.

The key to growing AR’s capabilities is integrating it into the business, marketing and IT strategies and ensuring that other departments understand how the technology could transform operations and benefit customer experience.

How can retailers leverage AR experiences to enhance the in-store customer journey and bridge the gap with online shopping?

Bridging the gap between in-store and online shopping is not an easy task for retailers, as the two experiences differ in their nature. However, they can make the experience more seamless. For example, you look at a product at home and walk directly into the store and buy it, or see something in store and buy it directly to be delivered at home.

How can AR be strategically used to improve customer satisfaction, brand loyalty, and post-purchase experiences?

AR can broaden the suite of opportunities that a brand can offer customers and provide more insights into their products and services. Often customers will stick to the products they are familiar with, AR provides brands with the opportunity to introduce new things to try to customers before they make the decision to buy. This can translate into more potential sales and increase customer loyalty.

What are the biggest challenges retailers face in implementing AR solutions?

AR is a generic technology by nature, compared to Artificial Intelligence (AI) which offers a personalised experience. This limits how a business can use it, and the opportunities to differentiate between competitors.

Another struggle for retailers is providing a benchmark to measure Return on Investment (ROI) in connection with the use of AR. Whilst some AR applications are linked to retailers’ websites or apps, there needs to be detailed data measurement in place in order to track how the two are connected. This can, however, be met by data privacy challenges which can limit how much retailers can track of their customers’ movement to improve their business applications. This could be improved by either hiring dedicated in-house talent or bringing in a third party to support with technological and strategic capabilities.

Lastly, hardware, i.e. the tools used to leverage the AR applications, is proving to be a big challenge. Currently, whilst hardware is available to buy, it is not yet affordable for the wider population. Therefore, until there is more mainstream adoption, there will be barriers to implementing wider AR applications. The current Apple Vision Pro can be considered the benchmark of how the future of retail could look like.

Looking ahead, how can AR evolve within the retail space, and what future applications are most promising?

One natural next step would be combining Augmented Reality (AR) with that of Artificial Intelligence (AI) to provide a fully personalised experience. This could change the face of retail by bringing in an approach highly tailored to each customer’s preferences, moving away from customer segments. As a result, customer loyalty, brand recognition and the emotional connection between brand and customers could be improved.

On a practical level, the development of hardware, like headsets, is already in progress and is expected to continue, making AR adoption much easier.

For smaller retailers with limited resources, are there cost-effective ways to integrate AR technology into their operations?

The technology is widely available so smaller businesses can leverage pre-made AR modules and components, which can be integrated into their website or apps, and adapted to their business model.

From a data privacy standpoint, how can retailers ensure customer information collected through AR applications is secure and used responsibly?

It is important that retailers look at opportunities versus risks. Businesses need to ensure that they have solid AR and AI governance to be compliant with current regulations. This can be achieved by building a multi-disciplinary team to deal with things such as data privacy, training, regulation and development.

The cyber component is another important consideration for companies, which need to minimise the risk of a breach of their technology. For example, at Forvis Mazars we help retailers with their digital strategies and support their project delivery which encompasses emerging technologies such as AR and AI and advise on how businesses can transform their business intelligence by introducing these into their infrastructure.

Get in touch

If you would like to speak with a member of our team about how we can support your business’ digital transformation, please get in touch via the button below.

Get in touch