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May 24, 2018

Augmented Reality

MHT Partners  | Consumer Investment Bank

While fairly established in some arenas already (e.g., the military, entertainment industry) brands and retailers are increasingly adopting augmented reality (“AR”) as a means of engaging with their customers. AR is a technology through which a view of a real-time, physical environment is “augmented” with digital information (typically visual or auditory, though other senses can be engaged too).  In layman’s terms, a consumer directs his/her smart phone at a product on the shelf, and through an app, certain images trigger the AR presentation on the smart phone.  The AR content can range from presenting a product tutorial, to allowing one to “see” inside the box, to communicating information on product options or upgrades, to simply conveying an entertaining brand “story” (regarding the latter point, check out 19 Crimes – an Aussie wine company).

With their traditional brick and mortar models under assault, retailers are simultaneously attempting to improve their in-store experience while simultaneously catching up on eCommerce capabilities. Similar to pure eCommerce players leveraging pop-up shops to address the loneliness of online shopping, brick and mortar retailers can utilize AR to close the gap from the opposite end of the spectrum.

Unlike virtual reality (“VR”), a cousin of AR which is self-contained, AR operates at the intersection of the real and perceived worlds (the consumer is physically in a store and making real-time decisions based on a number of physical and digital influencers).  For retailers and brands, AR has the potential to significantly improve their understanding of the consumer journey and behavior, particularly when connected to loyalty or incentive programs and/or married to existing in-store video cameras or tracing systems.

Examples of questions/topics that AR can help address are:

  • Did AR aid in the discovery of the product (e.g., did the consumer see or hear another consumer engaging through AR)?
  • How did the consumer engage with the product on the shelf (e.g., did they view or listen to the whole AR presentation)?
  • Was the consumer more or less prone to engaging with sales staff or other consumers while utilizing AR?
  • Was the customer more likely to buy the product after absorbing and processing the AR content?
  • Where in the store was the consumer prior to, and after, engaging with the product through AR?
  • Was the consumer more or less likely to promote the product, brand or retailer through social media (enabled real time through AR) or opt into email communication?

So the next time you’re wandering an aisle, with purpose or not, educate and entertain yourself with a dose of AR! It could be how we all shop in the not-too-distance future!

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