The world of augmented reality shopping may seem like futuristic sci-fi. But in reality, businesses are already using AR to sell products.
The AR market is still in its infancy, but it’s growing fast. Early adopters of AR have, in recent years, been gamers and those interested in the “metaverse.” But AR isn’t only for them.
Some 48% of respondents to a McKinsey&Company survey said they’re interested in using “metaverse” technology (i.e. AR and VR) to shop in the next five years. In turn, 38% of marketer respondents said they are using AR in 2022, up 15 percentage points from 2017’s 23%.
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In this guide, we’ll go over what AR shopping is, details about the AR/VR market, AR shopping trends to watch out for in 2023, and the best AR shopping app currently available.
Augmented reality shopping allows customers to virtually try on and test products through an electronic device such as a smartphone or virtual reality headset.
AR can either help customers feel like they are in a brick-and-mortar store interacting with products or show them how products will look in their homes or, in the case of fashion, on their bodies.
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As such, AR lends itself to marketer applications by allowing consumers to engage in pre-buying behaviors like virtually trying on clothing or makeup, or overlaying furniture into a living area to gauge its size and suitability with the rest of their home furnishings.
By the end of 2021, nearly two years into the pandemic, the US augmented, virtual, and mixed reality market was worth $28 billion and was projected to reach more than $250 billion by 2028, according to The Insight Partners, giving marketers and platforms good reason to invest in the technologies.
Companies like Meta and Google are trying to accelerate that trend by investing more in AR and VR tools—for example, Google recently acquired Raxium, a startup that specializes in smart glasses with new technologies that could greatly improve the prospects of Google’s previous (and current) Google Glass attempts.
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Newer smartphone cameras have also made AR shopping more accessible as they continue to improve hardware and software, enabling AR functionality across various apps. Consumer-friendly try-on options, paired with better technology distribution, make AR an increasingly appealing technology for marketers.
In this section, we’ll provide an overview of six different trends to look out for in the AR shopping space in 2023, starting with the most popular method of using AR technology: social media apps and camera filters.
Since the beginning of the pandemic, people naturally have spent more time online. As a result, brands have had to experiment and innovate to engage with them and encourage people to use their ecommerce and social commerce channels.
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This trend is not going away anytime soon—75% of the global population and almost all smartphone users will be frequent AR users according to Deloitte, and the majority are discovering AR through social media apps.
Some of the proponent mobile apps of using AR for brands early on were Snapchat and Instagram—allowing brands to create AR filters for their products for customers to use. For example, in a 2021 campaign, Christian Dior used Snapchat and Instagram AR filters to encourage “virtual word of mouth”—which received over 1.3 million impressions.
If you’re interested in trying out this trend for yourself, here are a few tips on getting started with using social media for AR:
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With that said, social media isn’t the end-all of AR—businesses have implemented the technology outside of social media, which we’ll discuss in more trends below.
The most obvious use of AR for brands is product demonstration, and it shows. Research from Modern Retail suggests product demonstration via virtual try-on and real-world overlay has seen the biggest increase in AR usage between 2017 and 2022.
Virtual try-on is perhaps most applicable in the fashion and beauty verticals. Across generations, over half of survey respondents were interested in using AR for trying on new makeup or hair colors and trying on new clothes, shoes, or accessories (from 57% of the silent generation all the way to 92% of Gen Z).
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An example of a brand using virtual try-on is Sephora, which is currently promoting its crossover (Sephora x Merve) by creating a lipstick try-on filter on Instagram:
This is a new AR filter, so there isn’t any public data (in terms of use by Instagram users) available about it at the moment.
Virtual try-on camera filters have an extra benefit for business—they can potentially decrease losses resulting from customer returns, since the customer has an idea of how the product will likely look on them.
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Similar to the idea of virtual try-on is the virtual “showroom.” As mentioned previously, this is the AR technology that allows customers to virtually place items in the environment around them (such as a living room).
The main difference between virtual try-on and showroom is the customer flipping the camera around. Other than this distinction in the way customers use the hardware, there isn’t much difference in the technology involved—which is good news for business owners.
Research we conducted last year, for example, found merchants who add 3D content to their stores see a 94% conversion lift, on average—and since there isn’t much difference between try-on and showroom style AR, the opportunity to use it is open to many verticals.
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Virtual showroom style filters/lenses are potentially the best application of AR for most businesses selling physical products—at least until better technology arrives.
Innovations in mobile technology, such as better depth sensing hardware (LiDAR and ToF), don’t appear to be slowing down anytime soon—as a result, each iteration of new phones becomes better equipped to handle AR features.
The predicted mobile AR market revenue growth over the next four years reflects these changes in technology—from $12.45 billion in 2021 to $36.26 billion in 2026.
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But it’s not just smartphones getting AR attention. As mentioned earlier, with better technology becoming more widely available, companies such as Google (including Android), Microsoft, Lenovo, and Vuzix are getting busy building smart glasses. Some even announced plans during CES (Consumer Electronics Show) earlier this year.
AR-enabled smart glasses may see some improvement in development next year, but we don’t expect them to be widely available in the very near future. So for now, the focus remains on mobile AR technology.
The main tip for thinking about mobile AR (and its improving capabilities) is the potential to develop brand-owned applications (for example, using Apple’s ARKit) for customers to see your products with AR, similar to IKEA building the IKEA Place app.
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There are two main methods of how AR mirrors work. The first is by using a digital screen with motion-sensor technology placed behind the mirror, then using AR to superimpose images onto the mirror in real time. The second method is by not using a real mirror at all, and instead using a digital display with cameras, similar to an extra-large smartphone.
Research from Snapchat suggests 21% of customers would go out of their way to visit a store with a smart mirror and 33% would use it in stores they already visit for trying on clothes. These figures decrease only slightly when it comes to trying on makeup or hair color (20% and 31%, respectively).
These mirrors can help shoppers when they’re in-store and either don’t want to try different makeup options or can’t because of newer COVID-19 policies.
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If you want to consider using AR mirrors in your stores, it’s worth considering the hefty investment it would take to roll them out across multiple locations—from the cost of the displays themselves to developing the software that goes inside them.
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However, a good tip here would be to conduct a trial run by installing one in a flagship store and interviewing customers who decide to use it. Based on the results, you can decide if the investment is worth it for your business.
In the research previously mentioned by Modern Retail, all survey respondents said they mainly use AR for entertainment purposes. So what happens if a brand uses AR to make the in-store customer experience more entertaining?
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With 22% of Snapchat research respondents suggesting they would be interested in using AR to make shopping more fun, it’s worth considering methods for this use case. With this in mind, some brands have taken to using AR to gamify in-store shopping—which, for UK brand Tesco, has built brand engagement, brand loyalty, and longer dwell times with products.
Tesco decided to team up with Engine Creative to build AR experiences in the Tesco Discover app. While it works to help customers learn more about scanned products, it also gamifies the experience by having customers scan products:
The gamification can only be unlocked by scanning the physical product which brings to life the Big Night In family quiz. The game includes scoring, trophies, forfeits and social sharing”
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The concept of AR in-store gamification might seem difficult, but here are a few tips that could help you get on this trend:
The great aspect of this trend is that many younger customers will recognize the gamified AR concept from the popular mobile game Pokémon Go, and will intuitively know how to proceed after opening up the AR experience.
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