Augmented Reality apps could revitalise the high street

Augmented reality shopping apps can provide consumers with richer experiences and greater value that can lead to increased store footfall and conversion rates for brick-and-mortar retailers, according to new research from Warwick Business School.

The study, Enabling smart retail settings via mobile augmented reality shopping apps, also found that AR apps can help to reduce return rates at traditional retailers – one of the major issues they face.

Brick-and-mortar retailers face increasing pressure from online competitors, but the study, due to be published in Technological Forecasting & Social Change, suggests that AR is able to provide consumers with experiential benefits ranging from greater shopping efficiency to entertainment that can increase the likelihood of store visits and in-store purchases.

In addition, the research found that mobile AR apps can boost the likelihood of consumers visiting a retail store again, and the likelihood of them referring a retailer to a friend.

“Augmented reality mobile applications for shopping can boost retailer performance by many measures: increased market share, sales and profitability,” said Scott Dacko, Associate Professor of Marketing and Strategic Management at Warwick Business School, who authored the research.

The study, which is based on two large-scale surveys of consumers using AR shopping apps in the US, including a survey of 21,467 smartphone users in the US, further establishes consumer views on the value of AR shopping apps including:

  • 48.8% are happier with the items purchased after using mobile AR apps
  • 41.2% are more likely to purchase from the retailer
  • 41.1% are more likely to tell others about the retailer
  • 39.0% are more likely to visit the retailer again
  • 37.2% are more satisfied with the retailer
  • 29.2% are more loyal to the retailer

According to the research, such benefits arise in part because AR shopping apps enable increased consumer certainty that what they are buying is what they want, as well as the ability of AR to let consumers see product demonstrations and receive more complete information before making a purchase.

Some retailers, such as J.C. Penny and Bloomingdales, have been testing the use of AR in the form of “virtual dressing rooms” which let customers “try on” outfits that appear when they are looking at themselves on a screen.

Some beauty retailers have plans to offer customers new ways to try out make-up with the help of a mobile “3D augmented reality make-up and anti-ageing mirror”.

The study also finds that AR shopping app users believe the added benefits of using these apps include:

  • Getting more complete information on products (56.6%)
  • Being more certain they are buying what they wanted (42.2%)
  • Having the opportunity to “try out” a product before buying it (27.3%)
  • Seeing demonstrations of products before purchasing them (26.9%)
  • Buying a product that is more personalised (23.5%)

The research concludes that AR apps also benefit retailers by livening up static displays. Also, one of the biggest challenges faced by many brick-and-mortar retailers is the management of inventory on the shelves and the lack of interaction with those products.

AR shopping apps can be used to bring these products to life in a virtual environment, thereby reducing the cost and management of physical inventory.

Home improvement retailer Lowe’s, for example, equips shoppers in some of its specially-designed stores with AR smartphone apps that enables them to fine-tune their chosen design from the comfort of their home.

However, the research found that having to give out too much personal information is the most frequently cited (31.4%) drawback among consumers who used AR shopping apps.

“Consumers are fearful of the Big Brother aspect, of being bombarded with marketing messages and of identity theft if their information is stored or hacked,” said Dr Dacko.

Additional drawbacks include:

  • Not integrated enough with all my shopping (27.8%)
  • Not fast enough to use regularly (26.9%)
  • Not reliable enough to use regularly (21.6%)
  • Time consuming to learn (20.1%)

Ultimately, 65.5% of users expected the apps to go “mainstream” in five years or less, with some users (39.6%) indicating that will happen as early as in one-or-two years.

Increasingly prevalent in-store internet access and availability of high-speed internet access in many homes will facilitate the increased ease of AR app use in the retail industry.