Augmented Reality 2.0 Will Transform Retail

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This article was originally published on LinkedIn Pulse on September 3, 2014.

Of all the new and emerging technologies to debut over the last 10 years, none has had such a swift rise and even quicker downfall through the Hype Cycle than Augmented Reality (AR). From 2008-2011, AR was all the rage in just about every brand category imaginable. But as most agencies, marketers and even AR companies soon found out, the promising technology was ‘just not there yet’. As a result, AR was soon labeled a gimmick and the A in Augmented Reality seemed more akin to a scarlet letter vs. the game changing technology it was projected to be.

Now 3 years later, we are witnessing the acceleration of Augmented Reality’s Second Act. Mobile AR campaigns are quickly gaining momentum and positive engagement and conversion metrics are starting to follow. More importantly, next generation devices are arriving in market that will allow AR to deliver on the promise its first incarnation could not achieve. Of all the market segments that will benefit from Augmented Reality 2.0, none will benefit more than retail. AR at its core is a visual, informative and interactive technology that aligns with shoppers’ expectations for an in-store retail experience. In addition, with these next generation devices, retailers can now obtain and analyze real-time data that was never before possible. Retail will be transformed through multiple use cases of AR and the next generation technologies that will drive them:

Mobile AR – Visual Couponing and Drive To In-Store

As Gen Y and Gen Z shoppers continue to increase their time spent with mobile devices, these younger demographic sets still prefer in-store purchase vs. mobile commerce. The Webrooming trend continues to grow with these demographics and the in-store experience will be vital to increasing the value of and finalizing a purchase. However, a challenge remains when it comes to product discovery or driving the mobile shopper in-store for trial and purchase stages. This is an area where mobile Augmented Reality driven campaigns can provide a unique and effective mechanism to drive people in-store.

Though not retail specific, a recent mobile AR campaign in Tokyo utilized Augmented Reality to increase visits to an Aquarium by 152%. The mobile AR campaign was built using the Junaio mobile AR platform from Metaio. AR has evolved beyond generic overlays for more effective virtual engagement and interaction. One only needs to look at the past to see where next generation mobile devices can leverage this type of Augmented Reality interaction to drive to retail. A past iButterfly mobile AR campaign was slightly ahead of it’s time but gave great visual and functional cues for how mobile couponing and geofencing can be utilized to engage and drive mobile shoppers in-store:

Project Tango – Product Interaction & In-Store Navigation

recent eMarketer study found that Augmented Reality was selected as the highest rated mobile shopping tool by CPG shoppers. Next generation mobile devices such as Project Tango from Google, are enlisting the use of a 3D camera integrated with the mobile handset. To date, mobile devices with 2D cameras have been primarily used for image detection and augmented information displayed off of packaging. 3D cameras, however, offer up an entire new level of interaction. Though mobile devices with 2D cameras can be used with Beacon technology, 3D cameras used with multiple Beacons can visually map out an environment. 3D cameras will also allow for better image tracking and eventual object recognition.

The video below shows how Aisle411 and Walgreens are using Project Tango for interactive store navigation and product interaction.

Kinect v2 – Real-Time Product Interaction Response Data and Behavioral Analysis

A recent Motorola Shopping Study had a generational breakdown of shoppers and the technologies they said would influence their in-store shopping experience. Interactive mirrors and intelligent dressing rooms had a higher percent of influence with Gen Y than other demographic sets. In an additional Alexander Babbage Study, shoppers aged 13-24 noted friends and in-store displays were rated highest as key shopping influences. This is where the Kinect device can be utilized to make in-store displays more interactive.

The recent release of Kinect v2 was a major improvement over Kinect v1. A somewhat relevant analogy would be comparing iPhone 3 to iPhone 5 and the generational leap from Kinect v1 to Kinect v2. You can view a comparison of Kinect v1 and Kinect v2 here.

In short, Kinect v2’s features will open up an entire new method of data gathering and interaction opportunities for retailers and shoppers. Kinect v2 can now track biometric data and the Kinect v2’s body and feature tracking are vastly improved. This will help with Virtual Dressing Room experiences that have gone through their own version of the AR Hype Cycle over the last few years. Though AR-based Virtual Dressing Room experiences are still not at the stage of some unrealistic conceptual videos, there are unique display and tablet integrations that can be utilized for inventory management, visual data analysis, real-time recommendation and more. The video below shows one instance of how Zugara’s Virtual Style Sense technology for Kinect can make the virtual dressing room experience more interactive and intelligent:

Summary

Studies continue to show that though shoppers are increasingly using mobile devices, discovery, trial and purchase are happening in-store across all demographic sets. Augmented Reality’s Second Act powered by next generation devices is perfectly positioned to drive shoppers in-store and increase shoppers’ interaction with products.

Retailers will also benefit by utilizing the abundance of visual, response and interaction data that can now be obtained through Kinect v2 and mobile 3D cameras for real-time product and pricing adjustments. Shoppers win through more interactive and personalized in-store retail commerce and retailers win with increased conversions and higher average revenue per transaction.

The question now is not if Augmented Reality will transform retail but when. And unlike Augmented Reality’s First Act, the answer is, much sooner rather than later.






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