Augmented Reality (AR) and Virtual Reality (VR) tech are on pace to become as popular within retail settings as they are in the gaming world. They are both parts of the rapidly expanding toolbox of Extended Reality (XR) features that will, in a matter of years, bring sci-fi visions of the future to everyday life via smart devices. To put this in context, by May 2019, there were already 1.05 billion AR-enabled devices in use around the world.

Next to Siri and Alexa, AR and VR are some of the more widespread examples of the Internet of Things (IoT) in action. Though there’s a lot of excitement around the possibilities that arise from the hyper-immersive nature of VR which through a headset, can transport users into completely different virtual environments, AR had proven to be far more adaptable to various use cases particularly when it comes to retail. Unlike VR, AR adds layers of detail and depth to the real-world and has been used to provide shoppers with additional product info, elaborate product visualisations as well as increasingly true-to-life virtual try-on and try-outs of products.

The benefits of integrating AR and VR into shopping are far-reaching and retailers have taken notice. Investment in AR and VR by the retail sector is expected to reach $1.5B (USD) in 2020. The business case for adoption is strong largely because measurable benefits to shoppers are quite significant. Among these benefits, novelty and entertainment rank high. The excitement of trying something new, interesting, and fun while shopping is enough to significantly increase footfall and many brands have boldly stepped up to take advantage. Heard of Ted Baker’s interactive shop windows? What about Topshop’s VR waterslide which led to increased swimwear sales year-on-year?

More importantly, there’s the added value shoppers derive through convenience, a faster in-store experience, and personalisation.

A cursory research of AR and VR in retail will show that they have been in the mix for quite a while. Conservatively, AR and VR have been used to market, sell, and facilitate purchases since 2010. Here’s a look at how smart tech is being used across various retail spaces today.

1. Supermarkets & Grocery Shopping

Connected stores, powered by AR and VR, have brought great convenience to grocery shoppers from China to the USA. Top of the list are automated ordering and shopping features that have taken grocery shopping entirely online. And for in-store situations, there are many interesting and delightful use cases that have great prospects for widespread adoption. For instance, Amazon made waves when their Go stores emerged in the US offering shoppers a completely automated checkout experience. Interestingly, Alibaba has also replicated the Amazon Go experience at their Futuremarts in China where facial recognition technology is used to identify shoppers on arrival and automatically process payments when shoppers exit.

Also in China, automated shopping carts and magic mirrors have been used at JD’s 7Fresh stores, and Alibaba’s Hema stores offer cashier-less checkouts. Automated shopping carts have been particularly well received by shoppers who are happy to have their hands free while they navigate supermarket aisles. Experts predict automation will become more and more commonplace in supermarket retail as shops look to reduce costs and effectively deploy their staff.

2. Fashion & Beauty Retail

Outside social media filters and gaming, fashion and beauty retail is one of the spaces where shoppers increasingly experience AR and VR in action. Research shows that consumers are very favourably disposed to AR-assisted shopping. Within this space, virtual try-on applications and smart fitting rooms are the top use cases, and they come in different shapes and sizes. In fact, between eyewear, shoes, make-up and clothes, experts estimate that over 100 million people used AR-enabled try-on features in 2019.

However, it’s not all fun and games. With the lockdown and social distancing, online shopping has increased, but online shopping is not without risks. Research shows 70% of clothes purchased online are returned and what’s more, the cost of online returns to retailers is projected to reach $550B (USD) in 2020. So virtual try-ons could potentially save fashion retailers significant costs which is why they are eager to jump into the fray. For instance, The Gap has a Dressing Room app which models clothes on shoppers based on selected body types. Wannaby lets shoppers try on sneakers via their iOS app, and Tenth Street lets shoppers try on hats virtually via their smartphone app.

It’s not all about online shopping though. AR and VR are upping the in-store experience at fashion retail outlets. In 2018, Zara rolled out an AR feature across over 100 stores that shows models wearing select outfits when shoppers click on indoor sensors with their smartphones. Adidas’ flagship store in London has smart fitting rooms with mirrors that identify products brought in for fitting using RFID sensors and lets shoppers request for other sizes to be brought for fitting, Then, there’s the Neiman Marcus MemoMi luxury shopping experience. MemoMi is a memory mirror that successfully combines AR and VR. It can simulate a live colour change to any outfit a shopper tries on while in the fitting room, eliminating the need to literally try on additional product samples. It also lets shoppers see side-by-side comparisons of the same or different outfits in different colours.

Perhaps the best indication yet that we’re going to see a lot more AR and VR in fashion is the proliferation of AR and VR tech companies dedicated exclusively to fashion retail. These include L’Oreal’s Modiface, Obsess, and Avametric, among others.

3. Shopping for Art

The world of art has kept up with AR and VR trends both at the experience level and at the retail level. Consider that the Kremer museum is a completely virtual museum featuring custom-designed virtual architecture and 74 paintings in ultra-high definition. For their part, the Museum of Stolen Art uses AR to unveil stolen art, symbolically represented by empty art frames. Covid-19 and social distancing protocols have also hastened the implementation of virtual art experiences with virtual art exhibitions becoming the norm for galleries like HOFA Gallery and many others.

When it comes to buying art however, the use of AR and VR is intricately linked to interior decor. Most smart tech use cases for buying art allow users to see a simulation of a piece of art on a wall or a table surface in order to get a sense of how the art will fit into a space. Barely a month ago, Etsy added an AR feature to their iOS app to assist users shopping for wall art. Galleries have also been adding AR features to their websites. There’s also the All Show WebApp which lets users create their own virtual art galleries and will project 3D versions of selected art pieces in any real-world environment via an iOS mobile device.

4. Shopping for Real Estate

AR and VR tech are also changing how people shop for houses and apartments. Experts note that virtual property showcases are fast becoming the standard, and as with art, the adoption of smart tech in real estate is closely linked to interior decor. The benefits in real estate go beyond the novelty and entertainment factor. Implementing AR and VR in real estate retail improves the customer experience significantly as the hassle of visiting many open house events is removed and even agents can attend to multiple clients at the same time.

Many companies around the world are also embracing these smart technologies. In India, Virtual Spaces lets potential buyers experience true-to-scale simulations of pre-construction projects for residences or offices via AR and VR. The renovations sector is also not left out. Consider DigitalBridge in the UK which uses pictures customers take of their homes to simulate different renovation options, giving a real sense of how new furnishings will fit in with old ones.

5. Shopping for Cars

How people shop for cars has also changed, and both car makers and dealerships are implementing AR and VR-assisted shopping experiences. The large, sprawling showrooms of the 1990s and 2000s are quickly being replaced by virtual showrooms that allow shoppers to instantly customize any car models of their choice, as the possibilities for creating fine-grained experiences are staggering. Consider Audi which had over 1000 virtual showrooms around the world by the end of 2018. They are by no means the exception as various car makers and dealerships use virtual showrooms and virtual automotive shopping assistants powered by AI to drive in-store sales.

Entertainment is also a significant factor driving the integration of AR and VR into automotive sales. Many car makers have invested heavily in creating futuristic VR experiences with very impressive results. Again, Audi’s Holoride comes to mind. Also see BMW’s impressive array of experience-driven AR and VR apps.

6. Indoor Navigation & Smart Retail

Indoor navigation apps, also known as wayfinding applications, are interesting use cases for AR and VR. These apps are designed to be deployed in large, complex indoor spaces like shopping mall, airports, train stations and even hospitals. Though they are strictly for navigation, they are worth considering within the context of smart tech and shopping because their use cases often intersect strongly with retail. Indeed, they are often considered in conjunction with AI and Machine Learning features like real-time analytics and proximity marketing which involves showing users advertisements based on their physical location.

Many indoor navigation apps such as SmartCitti and its in-built SmartShopper feature, are designed to leverage proximity marketing possibilities alongside providing indoor navigation tools. People who use SmartCitti’s SmartShopper feature in the UAE can navigate the Dubai Mall with ease and will receive AR-assisted directions to favourite stores and locations within the Mall.

The prospects for uptake of navigation apps are very good indeed. A 2019 consumer retail technology survey showed 60% of respondents would appreciate technology that reduces time spent navigating around a store. That said, experts have found that indoor navigation apps are taking much longer to catch on than anticipated. They attribute this to a current misalignment between navigation tech and customers’ needs and wants.

However, the covid-19 pandemic and ongoing social distancing requirements provide yet more proof of the potential importance of indoor navigation apps and could speed up their adoption. Indeed, the indoor location market is projected to be worth $41B (USD) by 2022.

7. The Future: Evolving Capabilities & Use Cases

Mixed Reality Everywhere

Mixed reality (MR) is the future. As AR and VR are seamlessly integrated into shopping experiences at all levels, in the end, we’ll have a hyper-optimized blending of the virtual and real world, with on-demand access to all kinds of AR and VR features accessible with a click on a smartphone or VR-enabled device.

And as MR steps into the fore, avatars will take on more importance, potentially fuelling a retail economy of their own. Did you know that the world’s first digital-only dress in Blockchain, Iridescence, sold for $9,500 this year? Designed by the Fabricant, Iridescence may herald the coming of a new age when people invest as much in their digital personas as they do in their physical selves.

Indoor Navigation in the Limelight

Indoor navigation will finally have its day in the sun. Applications like SmartCitti will let people build virtual communities around real relationships while facilitating seamless and contactless retail experiences with a view to enhancing user happiness. Also, with SmartCitti’s emotional review feature, people can review their experiences at shops, malls, restaurants, etc, using intuitive happiness marks.

Imagine using the AR-enabled SmartCitti app to explore eat-out options in your locale. Being able to see that one restaurant is covered in red heart emojis compared to another covered in sad face emojis could help you make a quick decision about where to have lunch that day. It’s a review process that’s much easier and more intuitive than Google Reviews and even TripAdvisor. With time, users will also be able to see real-time happiness reviews of businesses in their communities within the app and these reviews will serve as a tool for community enhancement and business development.

Indoor navigation will also become essential for adapting retail spaces to evolving global or local threats. Commenting on the prospects, CTO of SmartCitti, Shaun Gwilliam, observed that “The current pandemic has demonstrated that retail has been slow to adapt. With smart technology in place, including indoor navigation, footfall sensors, etc, introducing smart navigation with safe distance monitoring would have been much easier. AR and AI-powered indoor navigation could also assist in quickly identifying hotspots and bottlenecks within a store, allowing staff to be pre-emptively redirected to those areas.”

The 5G Boost

In a recent report, experts at Accenture anticipate that the rollout of 5G will massively increase integration AR, VR and other XR features into daily life. According to the report, “5G will be essential for the seamless, AR-enabled lifestyle that many futurists see as inevitable” because of its increased speed, capacity, lower power consumption and latency. 5G’s features are ideal for XD technologies like AR and VR which require high-speed connections, increased bandwidth, and minimal delays.

Adding AI and Machine Learning to the Mix

So far, we haven’t seen deep AI integration with AR and VR out in the wild. This is likely to change in the future and indoor navigation apps, which tend to have hybrid functionality are likely to lead the way. For instance, SmartCitti’s navigation app also includes a Digital Twin feature which can greatly enhance its real-time utility.

AI and Machine Learning are also key to achieving seamless personalization within AR and VR environments. SmartCitti’s CTO sees amazing possibilities in this regard. As he puts it, “With our AI-powered analytics, a merchant will be able to use SmartCitti to provide dynamic offers to real consumers who are in or around a shop in real-time and suppliers will be able to better measure and adjust their pricing and promotions based on real-time information gained from consumers’ activity.”

If you would like to contact Maryam our Community Manager about this blog or SmartCitti please do so on happiness@smartcitti.com, and download the SmartCitti app here.