Yahoo Finance Emerging tech and the future of shopping
The democratisation of augmented reality (AR) is now a reality. So how should retailers take advantage of it?
In the dynamic landscape of retail, the fusion of artificial intelligence (AI) and augmented reality (AR) has become the catalyst for an unprecedented transformation. In 2022, AR in the global retail market alone delivered US$2.39 billion, and industry projections suggest it will nearly quadruple by 2028. Innovation in retail is well underway, with businesses leveraging emerging technologies to engage consumers both online and in physical stores.
Luxury retail: Leading the charge towards a new shopping experience
Luxury retail has emerged as a strategic starting point for this tech-driven revolution. Snap collaborated with Gucci on an AR trainer try-on experience, allowing users to transition directly to the Gucci website for purchases. Meanwhile, Dior introduced an immersive AR experience for trying on sunglasses, further bridging the virtual and real shopping worlds.
The momentum of these technological advancements is undeniable, and Gen Z, a generation of early tech adopters, are driving much of this change. Research by Snapchat indicates that young shoppers are not just embracing AR; they demand it. An astounding 92% of Gen Z consumers express a desire to use AR tools for e-commerce, revealing a shift in consumer expectations through the customer retail journey.
Gen Z's demand for AR in their shopping experiences also underscores a requirement for retail shopping to evolve, from simply being an exercise or an activity, to a novel and immersive experience.
But it's not just about trends, it's about the immersive experiences that AR offers. Over half of the respondents in a recent study showed that AR experiences feel more personal. Consumers are clearly more likely to pay attention to ads utilizing AR tools.
Growth and early adoption of emerging tech
Asia Pacific's investment in AR solutions is projected to hit US$14.8 billion by 2026, reflecting the region's commitment to embracing these transformative technologies. Similarly, global retail's adoption of AI is set to surpass US$127.09 billion by 2033. The future of retail is unmistakably intertwined with the rise of AR and AI, promising to revolutionize every aspect of the shopping experience.
Major players in the industry are already showcasing the potential of these technologies. Estée Lauder's Voice-enabled Makeup Assistant and the Singapore Tourism Board's use of AR in virtual displays exemplify the versatility and impact of these innovations. The adoption of these emerging technologies is not a choice, but a necessity for companies aiming to thrive in this digitally driven era.
As we hurtle towards a fully digitalized world, the symbiotic relationship between emerging tech and consumerism is becoming increasingly evident. Businesses are compelled to innovate, and breakthrough technologies like AR and AI are at the forefront of this transformative wave.
A much-needed added dimension to online retail
However, challenges persist, especially in the realm of online retail. The inability to physically assess products remains a significant hurdle, contributing to high return rates. According to Shopify, e-commerce purchases see a staggering 20% return rate, primarily attributed to sizing discrepancies and unmet expectations. This is where AR emerges as a game-changer.
Virtual try-ons, pioneered by brands like Chanel and Adidas, offer a solution to the sizing dilemma. Imagine being able to virtually 'try on' clothing before making a purchase, providing an immersive and interactive experience.
Even luxury brands such as Tiffany and Co. are jumping on this transformative experience. The jewellery brand installed an AR mirror at the recent US tennis open in New York so attendees could try out a digital diamond-encrusted tennis racket and the Tiffany-created trophies. More recently, Cartier also partnered with Snap Inc. to launch AR-driven experiences that allow users to try on products and make purchases seamlessly within the app.
In crafting a future where AR is ubiquitous, marketers must present products in diverse and imaginative scenarios. Virtual fitting rooms should feature different-sized models and various product scenarios, empowering consumers to make informed decisions. The more contextual information available, the greater the consumer's confidence in their purchase.
Tooling for transformation
Ensuring brands and creators have access to the right tools to develop and deploy AR is critical to the user experience. Accessible AR tools which are ubiquitous and readily available for retailers to build both their online and offline (in-store) environments enable brands to create new immersive experiences, as well as provide direct feedback channels for what is/isn't working.
Notably, Snap Inc.’s Lens Studio has helped retailers by facilitating the creation of intricate 3D objects through generative AI. Deployment can then be streamlined via the platform’s AR lenses, allowing for relatively quick and easy implementation.
The reality for 2024 and beyond
The democratisation of AR, once considered cost-prohibitive, is now a reality. Tools like Unity have democratised AR application development, making it accessible to a broader audience. As we inch toward 2025, it's projected that three-quarters of the global population will have interacted with AR in some form. The time is ripe for businesses to integrate these technologies into their operations, elevating the customer experience and staying ahead of the curve.
AI and AR are not just tools; they are the conduits for innovation that will define the future of retail. The unstoppable convergence of these technologies heralds a retail renaissance, where businesses willing to embrace the digital tide will thrive in the era of immersive and tech-driven consumer experiences.
Ajit Mohan is the president for Apac at Snap Inc.
See Also:
Click here to stay updated with the Latest Business & Investment News in Singapore
Get in-depth insights from our expert contributors, and dive into financial and economic trends
