October 15, 2018
Two years ago, in the short film Hyper-Reality, director Keiichi Matsuda depicted a future world saturated with the flow of sensory information. This world blended the real world with virtual reality; streets and storefronts were covered by holographic overlays and signs. As the protagonist strolled down the aisles of a grocery store with her shopping cart, she encountered ceaseless flows of information in the form of augmented reality: product pricing and descriptions hovered above each item, and agamified interface floated on top of the shopping cart to display billing and the user’s shopping list. In short, the virtual interface was built into the physical environment in such a way that it was difficult to differentiate between real and virtual.
The scenes depicted in Matsuda’s film may seem difficult to imagine, especially at the time it was released. However, as augmented reality (AR) technology becomes more and more accessible, the future forecasted by the film is perhaps not too distant from us. In the world of retail, augmented and virtual reality are slowly progressing from buzzwords to actual strategies. Tech giants like Apple, Google, and Facebook have all invested in AR, and the newest IOS and Android devices all feature AR capabilities. In addition to the smartphone-based AR, wearable AR devices such as the Microsoft Hololens are gaining recognition and popularity among developers and professional users. Each month, new start-up companies make their debut in the arena of AR, hoping to carve out a spot in the promising future of this technology.
Today, there is no doubt that the age of augmented reality is coming, but how will it impact shopping? Specifically, how will it impact how consumers shop for and purchase products and provide feedback to brands? Right now, we are in the web 1.0 era of AR, meaning that most of the AR-powered technology is created by professionals instead of users. However, this situation will soon change when AR devices and apps become widely available to consumers. Even now, there are interesting applications that show how AR technology can be used in the consumer shopping journey.
Case Study #1: Snapchat World Lenses
Launched in April 2017, Snapchat World lenses allow users to place augmented reality elements into the scenes captured by their smartphone camera. Users can add 3D objects to their Snapchats and walk around in the scene to interact with them, blending the real world with the created elements.
Initially, the lenses let users incorporate fun and entertaining elements like Bitmojis and rainbows. However, as expected, Snapchat made a move to monetize this experience. Since this spring, companies have been able to create shoppable World Lenses that allow users to make a purchase or download an app, in addition to creating content to share with friends. Users can navigate to the desired web experience and complete a transaction without ever leaving the Snapchat experience.
These lenses add an augmented reality component to social commerce, and the direct shopping feature removes the friction that so often prevents conversion on social media. According to a statement from Snapchat’s Peter Sellis, Director of Revenue Product: “Even before the direct shopping in-app function, its lenses were able to increase sales 10% for 22 advertising campaigns.” With the increased functionality, it is likely that brands will continue to see increased awareness, engagement, and conversion from the AR-powered lenses.
Case Study #2: Zara’s AR app
Zara has always been willing to take risks in order to stay ahead in the ultra competitive fast fashion sector. One of its latest experiments was its AR app, which took full advantage of Apple’s ARkit. After downloading the app, a consumer can walk into any participating Zara store, point the app’s camera at anything from a mannequin to a display window, and a model wearing the apparel will come to life on their smartphone screen. A consumer can learn more about the featured clothing items on the spot by clicking on an in-app button to “shop the look”.
While other retail companies like IKEA, L’Oreal, or Lowe’s have explored AR as part of the online shopping experience, Zara chose to focus on the physical store. Their AR app merges mobile and in-store shopping and allows shoppers to truly visualize clothing items before purchase.
In addition to engaging with AR in-store, shoppers can share the experience via social media. As a press release from Zara puts it, “the app features a tool for sharing the experience on social media, encouraging users to take and submit photos of the holograms, establishing a virtual connection that appears remarkably real.” AR adds a new element to the concept of consumer-generated content (CGC). When consumers share these experiences on social, whether through Snapchat or an app like Zara’s, they are sharing content about a brand and its products to a larger audience. For now, this is primarily an awareness driver for the brand, but it will be interesting to see how CGC that features augmented reality will evolve to drive purchases and build brand loyalty.
Case Study #3: Google’s “Just a Line”
In March, Google Creative Lab released a cross-platform doodling/social app, called “Just a Line.” The app lets users to draw simple shapes and drawings and put them into the a real world scene, similar to the drawing features on Snapchat or Instagram but in 3D. Users can then interact with their drawings in the physical world. You can draw a virtual bone to treat your pet dog or play a game of tic-tac-toe with your best friends.
Unlike the previous two AR examples, Just a Line allows you to share in the same experience with your friends; users on both Android and iOS devices can collaborate on a drawing in the same physical scene. While it is intended to be used for fun, the app is simple, accessible, and collaborative — all things a great AR experience should be, regardless of its use case. And since this is coming from Google, you know this is just an initial glimpse into the tech powerhouse’s AR/VR strategy.
The future of AR and shopping
Right now, AR applications are still in their early stage of evolution. In this first wave of AR innovation, we find that most of the applications focus on gaming and social experiences. In our own research, 48% of consumers said it was not important to them that retailers use virtual/augmented reality features, and two-thirds of the brands and retailers we surveyed said they did not plan to invest in this area in 2018. The full use of AR in the world of retail has yet to be seen. In the next generation of developments, we will see new applications that focus on productivity and lifestyle, making AR tech not only fun but also helpful to use.
While the majority of retail industry may not yet be ready for AR and VR, imagine the not-so-distant future — you walk into a store to shop with your AR glasses on. You scan the shelf as you decide between items. Instead of pulling out your phone to look up products or research a brand, you can scan the product reviews and photos from other customers that immediately appear on your glasses’ display. In this scenario, AR and CGC come together as an integral part of the shopping experience.
