How is Augmented Reality affecting the retail industry?

Augmented Reality (AR) is an example of a recent Technological Innovation that has captivated the modern World. According to ‘PRNewswire’, the global AR/VR market has the potential to reach $94.4 Billion by 2023. It is expected that by 2022, there will be 3.5 billion augmented reality users in the world.

From games like ‘Pokemon Go’ by Niantic to Shopping apps like ‘IKEA Place’ by IKEA, AR has been implemented in many modern web and mobile applications. A vast majority of Retail Brands (about 67%) are planning to implement Augmented Reality in their Businesses in the next couple of years. Doing so will not only increase their sales conversion but will also provide a personalized shopping experience to the customers.

What is Augmented Reality?

Augmented Reality is an immersive technology that superimposes Computer- Generated Imagery (CGI) on a virtual screen making it look life-like. Hence, the name ‘Reality’. In simple words, it can be used to place virtual objects and products in a real environment. Besides CGI, the view can also be supplemented with other computer-generated inputs such as sound, video, graphics, or even GPS data. AR is majorly used in the Gaming and Retail sectors but with the latest technological advancement and innovations, it has found many other applications particularly in the entertainment industry, Healthcare industry, Education sector, Scientific Research, etc.

Why is Augmented Reality needed in the Retail Industry?

Before we introduce ourselves to some of the amazing applications and benefits of using AR in the retail industry, we need to understand the problems with traditional retail marketing.

Traveling: Customers have to physically travel to a store that may or may not be in the proximity of a customer’s house. Many a time, a customer has to travel long distances just to reach the Retail store. During the adverse times such as the current Covid-19 pandemic, it’s quite risky for the customers to step out of the house.

Stock: It is not possible to find out whether a product is available or out of stock unless a customer visits the store. The stores do have Business contact numbers on which the customers can call. But sometimes due to ineludible reasons, a customer can’t get through to the store representatives.

Cost: For an investor, setting up a physical store is always a costly affair. If the business fails, it leads to a huge loss.

Availability: Physical Stores have limited working hours as compared to online stores which are available 24x7.

According to the USA AR Retail survey:

  • 72% of customers purchased items they didn’t plan to buy because of augmented reality.
  • 55% say AR makes shopping more fun.

Five Popular examples of the application of augmented reality in the Retail industry

  1. IKEA: IKEA is a very popular brand dealing with Furniture and electricals. IKEA’s AR technology-powered app ‘IKEA Place’ allows users to scan a particular furniture piece using their smartphones and then superimpose that into their room’s image. A customer can do it for their bedroom, kitchen, lavatory, hall, foyer, lawn, etc. This helps them save a lot of time and energy. Watch the video here to learn more about the ‘IKEA Place’ app.
  2. Vespa: Vespa Scooter manufacturing company called Piaggio has launched an AR application that allows users to customize their VESPA on a magazine page. After downloading the app, you just need to hover your phone over the magazine and a virtual scooter will automatically pop-up. You can customize the vehicle as per your choice. You can change the colors, add/remove accessories, look for different styles, etc. Watch the video here to learn more about it.
  3. TopShop: The clothing giant Topshop in its retail stores has set up kiosks where shoppers see a digital reflection of themselves and can try out each individual clothing through the reflective image. Via hand gestures, the dresses can be changed one after the other. Watch this video to see the Kiosk in action.
  4. Wannaby: A footwear manufacturing company called Wannaby has launched an AR-powered app called ‘Wannakicks’. As seen in this demo video, a customer can try on ten pairs of shoes in 10 seconds.
  5. Dulux Visualizer: The Dulux Visualiser app helps you try out a shade of paint for your room before you buy. Customers can use their smartphone cameras to scan their room and virtually paint it with any color of the rainbow.

Applications of Augmented Reality in Retail Industry

Retailers can enhance and personalize their customer’s shopping experience by implementing AR in the following ways.

  1. Trying Products virtually: AR applications can enable the customer to try out various products such as clothing, jewelry, make-up, etc. before purchasing. This is especially useful when the store is packed with many customers and you are unable to physically try on a product.
  2. Look at virtual products at home: AR enables the customers to look at virtual products and place them in their houses. The customers can get a fairly accurate portrayal of the product and see how it would look in their room.
  3. Gather information about products: AR can allow customers to gather in-store information about a product such as customer reviews, ratings, etc. This can be achieved by integrating AR with other technologies such as AI. Thus, AR creates a more cohesive experience.
  4. Virtual Fitting Rooms: By standing in front of the camera, customers can see how clothing items look on their bodies without physically trying anything on. The kiosks or merchant bots in the virtual fitting room can guide customers and display text notes or play audio/video notes providing information about a particular product or even suggest some similar products to the customers. This allows for a concierge level of service.
  5. Marketing Campaigns: Merchants can create special discounts when they see a customer has spent an exceptionally long amount of time with a particular product in the merchant’s mobile AR app. Merchants can even customize an email campaign and target the group of users that shared an AR experience with a certain product.
  6. Understanding Customers’ Preferences: Merchants can use AR to learn more about their customers. They can ask for a consumer’s size before trying on a clothing product. Merchants can save consumers’ preferences and adapt marketing campaigns and product suggestions accordingly.
  7. Brand Awareness: Merchants can implement AR in their Social Media Marketing Campaigns. Once the users start sharing their AR experience on the merchant’s app on social media, the brand awareness increases and it starts bringing in prospective customers.

If you are interested in reading about Artificial Intelligence and how it is affecting the way we shop today, Read this blog.

Benefits of using Augmented Reality

  1. AR can eliminate barriers of geography and capital. It creates a virtual experience that can be accessed by anyone with an internet connection from any part of the world.
  2. Customers can have an engaging, fun, and unique shopping experience.
  3. AR gamifies shopping experience leading to higher customer satisfaction and loyalty.
  4. AR simplifies the process of selling in a B2B setting, eliminating the need for the sales representatives to carry heavy products, sales material, etc.
  5. AR can help reduce costs by preventing the merchants from investing a lot in the real estate, set-up, infrastructure, etc.
  6. AR can save a lot of time and resources for both customers and the Merchants. Customers can try on a virtual product without having to wait for the physical product to be delivered to them.
  7. AR can help reduce overhead and shipping costs. Merchants can cut down on the costs by targeting products, customers, and only ship the products they know will be successful.

Challenges in Augmented Reality

  • Choosing Developers: Choosing Developers can be tricky sometimes. The merchant needs to consider the cost factor and the break-even point. In-house can be cheaper if the merchant has the staff with the required skill sets. A third party can be faster and easier but can be very costly at times.
  • Realistic Design: The product must look realistic and give an uplifting experience to the customers. The app should have excellent ‘UI/UX’ elements along with great 3-D visuals. It should be easy to use and intuitive for the users.
  • Discovery: The merchant should be able to promote the AR app. The user-generated content on social media helps in creating brand awareness.
  • Marketing Campaigns: The merchant must customize their marketing campaigns. They should focus on localization, provide incentives and discounts to the customers, and maintain the privacy of their personal information.


AR technology can enhance a customer’s shopping experience, and a merchant is more likely to find lasting success.

It is important that the Merchants learn more about Augmented reality technology and apply them in their businesses. As initial investments see exponential results, more and more companies will leverage the AR technology to stand out from the crowd through engaging and immersive sales experiences.

Retailers can use AR to create virtually enhanced versions of their physical store or transcend their offline store to a whole new level by offering an environment that offers higher value in terms of personalization and visualization.

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How to get started with AR?

We, at SoluLab, are a leading AR/VR development company that has helped startups, SMEs and brands develop cutting edge AR solutions. You can take a glance at our Portfolio section to learn more about our recent AR projects.

If you are keen on trying out the technology for your business or learning what it might imply for you, you can talk to our AR Team who is eager to answer any of your questions regarding AR.


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