Though augmented reality (AR) has the potential to be present in almost every industry, it is hard to say the true impact of augmented reality (AR) in our daily lives. The retail market may be an exception. As consumer demands change on a daily basis with diminishing levels of patience, modern retail could greatly benefit from augmented reality (AR).
The Growth of Augmented Reality
Researchers and Markets recently reported that AR in the retail market is predicted to reach $1.15 billion in 2018 alone, and projected to hit $8 billion by 2023. This astronomical growth is driven by the heated competition of online shopping, where companies skip the brick-and-mortar stores, and the overhead costs, to deliver better quality at a lower price. Companies like Ebates have even made a successful business of rewarding customers with cash to shop solely online from their favorite retailers. In a 48 hour time period, more than 80% of people are searching to buy something, said Google at their recent 2018 Marketing Live Event. It is the age of consumption, and retailers have a say in how, when, and where that occurs.
Implementing Augmented Reality
Early adopters of AR technology in the retail space include IKEA and Wayfair, where they utilize AR to showcase their furniture in a way that appeals especially to millennials. Clothing stores have added Smart AR mirrors in their stores as a way to let customers virtually try on items before making a purchase. These applications of AR potentially accelerate sales, thus speeding up the supply chain process by connecting end users earlier in the process before they buy. Returns alone cost retailers $260+ billion dollars, so decreasing the return rate by even fractions of a percent would help retailers tremendously. This will have a major impact on supply chains as well, potentially increasing the demand for products.
Research and markets also predict that North America is anticipated to lead the AR in retail movement, with more than 95% of investments into the technology being made.
With traditional methods of advertising and marketing products still standing strong, AR adds a new mix of innovative strategies to connect with consumers during each phase of the buying process. Supply chains must be ready with advanced modeling and simulation capabilities as AR reaches its full potential.