How AR and VR Redefined the Online and In-store Experience

Photo of Kamil Świątkiewicz

Kamil Świątkiewicz

Updated Aug 30, 2023 • 22 min read
VR shopping

As digital and real worlds merge, the future of shopping revolves around AR and VR experiences.

Shopping has changed a lot over the years. From buying at local stores to scrolling online, the way we shop keeps evolving. Now, with augmented reality (AR) and virtual reality (VR), shopping is taking another leap forward. These technologies offer a mix of real-world and digital experiences, making shopping more interactive and personalized.

You may be surprised to learn that the augmented reality market was not born with video games. Its roots go back to 1968, when Harvard professor and computer scientist Ivan Sutherland developed the first head-mounted display called "The Sword of Damocles." It allowed users to experience computer-generated graphics that enhanced their sensory perception of the world.

The term "augmented reality" itself was coined by Boeing researcher Tom Caudell in 1990. Similar to many technological inventions, AR was first used in the aerospace and aviation industries. Then it stormed the world of video games – from "Quake" in 2000 (in addition to a head-mounted display, players had to wear a backpack with a computer and gyroscopes) to the enormously popular Pokemon Go, which increased mainstream AR awareness.

Today, an increasing number of retailers adopt AR and VR technologies to enhance customer’s shopping journeys. In this article, we'll explore how these innovations are transforming retail for both businesses and enthusiastic shoppers.

What is the difference between AR and VR in retail?

Augmented reality (AR) is a sophisticated technology that imposes computer-generated visuals onto the user's view of the real world. Picture this: You're strolling through a a physical store, and as you point your smartphone at a dress, detailed information about the fabric, the design, customer reviews, and even style recommendations pop up. It's as if the real-world view has been “augmented” with a digital touch. Whether it's trying on virtual eyeglasses or visualizing how paint might transform a room, AR offers users real-time interactivity and visualization.

Virtual reality (VR), in contrast, creates a full-fledged simulated environment that users can interact with and often feel immersed in. When you wear a VR headset, it's not about enhancing the real world – it's about being transported to a different one altogether. Imagine stepping into a digitally created store where you can pick up products, examine them from every angle, and even witness how they're used – all without leaving your living room. VR's strength lies in its ability to offer a comprehensive sensory experience, disconnecting you from your actual surroundings and immersing you in a digital world.

Shaping the customer journey with augmented reality

The retail industry has much to gain from augmented reality. New technologies are improving engagement and involvement, creating a smoother multichannel customer experience. A consumer can actually become a part of the brand experience and get a personal, multisensory journey that enhances purchase confidence.

Augmented reality solutions, such as virtual fitting rooms, increase customer satisfaction and brand awareness while reducing customer return rates. They can also be great tools for marketing as they provide interactive digital content that piques user interest.

So the questions arise: Why haven’t they been used before? Why are we experiencing the augmented reality boom right now?

The first reason is that many brands previously felt that AR was "inaccessible" to the average customer as it needed a more advanced device, typically a smartphone, to utilize it. Some were hesitant to adopt tech solutions due to past "bad experiences" (the previously subpar quality of the experience) and the high development costs.

However, online shopping is now one of the most common activities, and the pandemic has normalized it and made it a more suitable option for almost all consumers. COVID-19 forced companies to implement changes they would have otherwise likely postponed.

How are AR and VR used in the retail industry?

There are several key AR applications that retailers can leverage to enhance their customers’ shopping experience. Whether it's trying on clothes without stepping into a fitting room or navigating vast store layouts with ease, AR is redefining how consumers interact with products and stores. Below are some of the prominent ways virtual reality and augmented reality in retail is making its mark in the retail sector:

Virtual try-ons

Virtual try-ons, powered by augmented reality, allow customers visualize products like clothing, accessories, and makeup before purchasing. This not only elevates the shopping experience but also minimizes the chances of item returns, ensuring greater customer satisfaction.

Modern autonomous stores harness augmented reality display technology to innovative smart mirrors. These in-store displays offer customers a deeper dive into product information and a chance to virtually experience products. For retailers, this means more effective consultations and fresh avenues for marketing.

Virtual showrooms

Virtual showrooms empower customers to immerse themselves in a 3D store environment without leaving their homes. By navigating these spaces, shoppers can view products from all angles, zoom in for intricate details, and even visualize how they would look and fit in their own spaces.

AR shopping assistants

AR and AI shopping assistants act as virtual guides, helping customers throughout their shopping journey. They can provide product recommendations, answer queries, and even offer styling tips. By talking with these assistants, customers can get information they need without speaking to a human salesperson.

Interactive product descriptions

Gone are the days of static product descriptions. With AR-powered shopping, customers can scan products to receive enhanced, interactive details. This might include videos showing the product in use, customer reviews, or 3D visualizations, ensuring shoppers have all the information they need at their fingertips.

Large store layouts can be daunting for customers. AR-enhanced navigation tools guide customers to their desired products or sections with visual indicators and paths, ensuring an efficient shopping experience.

Enhanced print catalogs

Traditional print catalogs come to life with augmented reality. By scanning the pages, customers can view products in 3D, watch promotional videos, and even place items in their virtual space to see how they fit, bridging the gap between print and digital.

Store window displays

Augmented reality enhances store window displays, turning them into interactive showcases. Potential shoppers can engage with the display, receive product details, and even avail themselves of promotions or discounts, all by using their smartphones.

Training and assistance

Augmented reality provides staff with on-the-job training, showcasing product placements or store layouts. For customers in DIY stores or those assembling products, AR can guide them through step-by-step instructions, ensuring they have the assistance they need.

Gamification of shopping

Incorporating AR games or challenges into the shopping experience can enhance customer engagement. By participating, customers might unlock discounts, rewards, or exclusive products, making shopping more interactive and fun.

Key benefits of AR and VR in retail business

The key benefits of adopting AR and VR technologies in retail businesses are numerous, enriching the customer experience, bolstering sales, and elevating brand awareness. These technologies create immersive and personalized shopping experiences, driving customer engagement and increasing brand loyalty.

The power of AR and VR extends to fine-tuning product fit, enabling retailers to align their offerings more closely with customer preferences. This accuracy not only enhances the customer experience but also effectively reduces return rates. Businesses benefit from lower costs associated with returns and step toward sustainability by minimizing waste.

When these technologies are married with artificial intelligence and machine learning, the benefits compound. Retailers can capture and analyze customer interactions, gaining a deeper understanding of shopper behaviors and preferences. This data enables the refinement of product assortment planning, allowing retailers to adapt to the commerce trends and demands of the consumer market.

Moreover, the immediacy that AR and VR technologies offer can be a game-changer in the current era of supply chain uncertainties. Retailers no longer need to wait for physical products to arrive to go to market; instead, augmented and virtual reality presentations allow for an immediate showcase of new offerings. This not only accelerates time to market but also allows retailers to present their products to a global audience instantly.

The virtual “touch and feel” experience provided by AR and VR eliminates the need for physical presence in select wholesale locations, offering flexibility for retailers. They can now begin selling items even while they are still in production or in transit, thus optimizing the supply chain and reducing time-to-market.

Unlike traditional brick-and-mortar retail stores, which are constrained by specific operating hours and days, virtual environments are accessible around the clock. This ensures that the 3D virtual aisles are always open for browsing, irrespective of time zones or geographic constraints, thus taking the concept of “always-on” retail to a new level.

Real-world examples of successful AR implementations

The potential of AR in retail industry is best demonstrated through real-world examples of successful implementations. Renowned brands such as IKEA, Sephora, and H&M have harnessed the power of augmented reality to create immersive experiences.

AR in furniture retail

IKEA Place revamped as Ikea Studio, and lets the users design entire rooms and capture full 3D plans with dimensions, including windows and doorways. It also recognizes existing furniture and places white boxes on the plan where your current pieces are located.

Wayfair Inc., a global online home goods giant, has rolled out its 3D visualization tool to a vast number of Android users. Powered by Google's ARCore, the "View in Room 3D" feature on the mobile app lets shoppers visualize furniture and decor pieces in their space.

Canadian furniture retailer EQ3 has implemented web-native augmented reality for online sales. This allows customers to visualize furniture through their AR filters directly on the web without downloading an app. According to their data, AR users had a 112% higher conversion rate and a two-fold increase in average order values compared to non-AR users.

AR in automotive

BMW has introduced the BMW M Mixed Reality, where the vehicle transforms into a game controller. In this unique setup, the car navigates a virtual track, dodging obstacles and gathering "BMW M coins."

Audi has unveiled its latest concept car in the sphere series – the Audi activesphere concept. Incorporating augmented reality, the concept offers an enriched experience, blending virtual displays with car elements.

AR in beauty

In response to the pandemic, Sephora has replaced physical product testing with digital testing. Sephora's AR app, Virtual Artist, uses facial recognition to give customers a virtual makeover and experiment with its vast library of eyeshadows, lipsticks, and false lashes.

Another example is the COSMO Neonail manicure app. It presents a virtual showcase of over 2,500 nail polishes and related products. Using augmented reality combined with machine learning, Neonail crafts a lifelike nail salon journey for its users.

AR in fashion

H&M launched at their Berlin-based innovation lab virtual showroom. It offers an immersive glimpse into select collections like Studio, Innovation Stories, and Collaborations. It's a fresh digital space where H&M nurtures ties with media, celebrities, and influencers, kickstarting with their “Cherish Waste” campaign.

Valentino teams up with WANNA to launch their AR “Clothes Virtual Try-on.” Using the WANNA Wear demo app, users can virtually try out select pieces from Valentino's Urban Flows Fall 2023 collection. This AR feature offers a fresh and personalized online shopping experience.

Tommy Hilfiger, part of PVH Corp., has introduced a cutting-edge digital showroom in Amsterdam. This space blends brand information, sales tools, and collection details into a user-friendly touchscreen setup. At the heart of this room is a striking walnut-framed touchscreen table. It's next to a large wall filled with high-resolution 4K screens. Here, customers can easily explore items from the Tommy Hilfiger athletics and Hilfiger Denim collections.

AR in grocery

Hyper AR lets shoppers compile shopping lists and get AR-guided navigation for optimal store routing. This ensures minimal staff interactions, freeing employees to concentrate on inventory tasks and enabling shoppers to navigate autonomously.

Overcoming challenges in AR adoption

While the benefits of AR adoption in retail are significant, there are challenges that retailers must overcome to fully harness the potential of this emerging technology. Ensuring high-quality AR experiences and integrating AR with existing systems are two primary challenges associated with AR adoption. Below, we delve deeper into the intricate challenges.

Ensuring high-quality AR experiences

Guaranteeing superior augmented reality a experiences is important for stimulating customer commitment. To ensure a high-quality AR experience, it is important to conduct user testing, usability testing, and performance testing. These testing methods help to identify and resolve any potential issues before they become a problem, ensuring a seamless and enjoyable user experience.

Moreover, retailers must also consider the importance of user feedback for AR experiences. By gathering and analyzing user feedback, retailers can identify areas for improvement.

Integrating AR with existing systems

Integrating AR with existing systems poses challenges, not only because of the technology's inherent complexity but also due to the need for specialized hardware, software, and a reliable network. For successful integration, retailers must ensure that AR is fully integrated in store and is compatible with their current infrastructure.

The future of AR in retail and ecommerce

AR technology's evolution promises advanced features like precise virtual try-ons, immersive multisensory experiences, and products inherently built with augmented reality at their core. Complementary technologies, such as body scanners also enhance AR solutions, optimizing personal fit. This positions virtual fitting as a potential routine step, especially for luxury purchases.

AR and VR's growth suggests they'll become integral to the omnichannel shopping experience. While they won't fully replace physical stores, they'll elevate and enrich the in-store journey. The future of retail sees a mix of online and in-store shopping, enhanced by technologies like AR and VR along with AI implementations.

Frequently asked questions

What is AR and VR in retail?

Augmented reality (AR) and Virtual reality (VR) in retail provide customers with an immersive experience, allowing them to interact with products virtually. AR enhances the real physical world with digital elements, while VR provides an artificial simulated environment.

How does AR technology help in online shopping?

Augmented reality technology allows customers to experience online shopping in a more realistic way by virtually trying out products before making a purchase. This can lead to increased customer satisfaction and loyalty, as well as boosting sales.

What are the advantages of AR in retail?

AR in retail enhances the shopping experience by offering real-time product visualization, interactive virtual try-ons, and personalized shopping journeys.

What retailers are using AR?

IKEA, Sephora, Cosmo, BMW, and Audi are excellent examples of successful AR implementations in the retail space. They each provide an interactive, personalized experience that can help customers find the perfect product for their needs.

Photo of Kamil Świątkiewicz

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Kamil Świątkiewicz

Former Product Manager at Netguru
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