How augmented reality can add value to the customer experience

12.10.2022

by Julia Pott

AR technology enables extended reality applications that go far beyond entertainment purposes and are gaining traction in the retail sector. Here is our brief overview of what users expect from AR capabilities and how brands and retail companies respond to these evolving needs.

"Augmentality Shift" is the name of the new study in which Ipsos, commissioned by Snap Inc., took a closer look into augmented reality behavior to uncover the respective expectations and mindsets of users from 16 countries. The study found a major gap between AR’s potential pertaining to consumer interest and what the brands deliver.

Augmented Reality: Exceedingly more than pure entertainment technology

Apps like Snapchat enjoy great popularity among younger audiences. The app lets users play with augmented reality technology to enhance photos and videos with virtual elements and effects. According to the Snap report, 90 percent of surveyed brands consider AR primarily for its entertainment value.

Chart: Augmented reality user engagement; Copyright: Snap Inc.

According to the report, companies do not yet offer the diverse AR experience that users want. In all areas surveyed, respondents expressed significantly more interest in AR experiences than companies currently want to offer. © Snap Inc.

Yet according to the Ipsos study, consumers have a very different view: In fact, only 57 percent focus on the entertainment aspect of the technology. Instead, many chiefly appreciate the practical benefits of AR – as it pertains to shopping, researching products or (indoor) navigation. Consumers also recognize the endless possibilities AR applications provide for learning, personal development or strengthening connections with others.

Meanwhile, augmented reality doesn’t just hold great potential for users. It also benefits retailers to offer innovative, memorable AR experiences as this fosters brand building and brand loyalty, helps brands stand out from the crowd, facilitates customer interaction and a deeper understanding, helps customers feel confident about their purchases and frequently boosts customer satisfaction.

AR can boost the customer journey

Augmented reality can create additional value across all phases of the customer journey – product awareness, consideration, purchase, and post-purchase customer retention. AR allows consumers to preview products or experience services ahead of purchase. This makes customers feel more confident about their decisions and have a more positive response to the customer experience.

We already explored the many possibilities of virtual AR fitting rooms in previous articles: exploring clothing, jewelry, eyewear, and cosmetics.

Augmented reality applications not only let you visualize design but also help experience product details, the structure, and its operation in a virtual realm.

Screenshot from the Curious Company commercial; Copyright: Curious Company

The Curious Company created an AR product experience for The North Face trekking shoe VECTIV. For example, the components of the animated athletic shoe can be displayed to illustrate the materials used and the design of the shoe. © Curious Company GmbH

Notable examples also include the virtual placement of a product in a consumer’s home. Some furniture retailers use the technology to allow customers to explore how items fit within their own homes before they buy them.

A smartphone using augmented reality in a kitchen; Copyright: Zephyr

Zephyr offers various AR functions to virtually place their products in the kitchen at home. In the provider's app, users can select items, place them, adjust dimensions and designs, and even recreate the function and strength of lighting. © Zephyr

AR helps expand retail shelves, sales floors, or window displays in a virtual environment

A person uses augmented reality on a tablet in front of a shop window; Copyright: Pia-Henkel-22

Retailers can expand their physical retail displays and shelves as needed if they feed their products and their different versions into the system. They only need a few individual samples that customers can physically touch in a showroom because augmented reality allows them to subsequently explore the entire product assortment in the virtual setting.

German footwear retailer Deichmann utilized this concept to expand its print ads. Shoppers can scan a QR code to access additional information and other articles available in the company’s online store.

An interactive AR experience can also turn a store window into a showstopper for passers-by. As part of Berlin Fashion Week, the Showz agency delivered an immersive brand experience for window displays. Passers-by scan a QR code and interact with the display or the content, respectively. Via the user’s mobile device, a fashion collection was projected into the store window. A press release summed up the benefit of this type of presentation: "In the future, all retailers – regardless of available window display area – can make every designer piece of a collection come alive without the need for physical space."

On to the last phase of the customer journey. The positive review of the shopping experience and the multiplier effect as it pertains to other consumers takes us back to the entertainment value we outlined in the beginning of this article. Augmented reality content is "shareable". Users can share pictures and videos and communicate their experiences with the product and the brand in a fun way on social media: Marketing truly doesn’t get any better than this.