Financial Services

Integrating augmented reality to enhance in-store customer engagement

Retail is no longer just about selling products; it is about delivering engaging experiences that keep customers coming back. The demand for innovation in in-store customer experiences has never been higher, as brands compete to create immersive, personalised shopping journeys.
Augmented Reality (AR) in retail is transforming how customers interact with products, blending the physical and digital worlds. From virtual try-ons to real-time product visualisation, AR is redefining the shopping experience. As augmented reality revolutionises retail, businesses that integrate AR will tap into a booming market set to grow from $19.9 billion in 2024 to $64.4 billion in 2030, at a CAGR of 21.6%.

Understanding augmented reality in retail

At its core, augmented reality in retail blends digital elements with the real-world shopping environment, allowing customers to interact with products in a whole new way. AR enhances in-store customer experiences by offering interactive and engaging features that drive purchasing decisions. Some prominent examples of augmented reality in retail include:

• Virtual try-ons: Customers can try on clothes, eyewear, or makeup virtually, helping them make informed purchasing decisions.
• Furniture and home décor placements: Customers can visualise furniture in their homes before buying, reducing uncertainty and return rates.
• In-store navigation: Customers can navigate through stores with digital maps and directions.
• Product customisation: Customers can personalise products in real time, increasing engagement and conversion rates.
• Product demos and information: Brands can showcase features and benefits of their products to raise customer awareness and engagement. Customers can also scan products to receive detailed specifications, reviews, and promotions instantly.

Some of the leading retailers leveraging augmented reality-powered shopping experiences include:

• IKEA: The IKEA Place app offers AR-powered design consultations, allowing customers to visualise furniture in their space.
• Nike: The brand integrates AR in physical stores to offer an immersive product experience.
• L’Oréal: The makeup retailer lets customers try on makeup using AR technology before purchasing.
• BMW: The automobile brand allows shoppers to personalise their cars with AR-driven customisation before purchasing.

Retailers face increasing pressure to meet evolving customer needs while staying ahead of the competition with engaging in-store customer experiences. Infosys BPM helps businesses overcome this challenge by integrating AR solutions seamlessly to enhance user engagement and improve operational efficiency. Through strategic consulting and transformation-as-a-service (TaaS), Infosys BPM enables retailers to implement scalable, cost-effective augmented reality solutions in retail that drive engaging in-store customer experience, customer loyalty, and, ultimately, growth.

Benefits of augmented reality-powered shopping experience

Beyond creating an engaging in-store customer experience, augmented reality in retail offers several tangible business benefits, including:

Enhanced personalisation

AR-powered features enable retailers to facilitate personalised shopping journeys, allowing customers to see products in their own environments before purchasing.

Higher customer engagement and interaction

Interactive, augmented reality-powered shopping experiences keep customers engaged, increasing the likelihood of purchase and boosting brand loyalty.

Reduced return rates

By allowing customers to try products before buying, AR helps reduce return rates, improving not only operational efficiency but customer satisfaction as well.

Enhanced brand differentiation and competitive edge

Due to the relative novelty of augmented reality-powered shopping experiences, retailers adopting AR stand out from competitors. They can offer innovative in-store experiences that attract modern customers, building a competitive edge in today’s global markets.

Improved product understanding

With the help of augmented reality in retail, shoppers can gain deeper insights into product features and benefits, leading to better purchase decisions.

Increased sales and conversions

A compelling in-store customer experience drives higher conversions, leading to increased sales volumes and revenue for the brand.

Augmented reality in retail: Implementation challenges

Despite its advantages, implementing augmented reality in retail comes with a host of challenges that can hinder its adoption. Some of the key hurdle retailers must overcome include:

High development costs and technology complexity

Developing augmented reality-powered shopping solutions requires significant investment in software, hardware, and expertise. Strategic financial planning and phased rollouts can help mitigate these costs.

Talent and expertise gaps

Retailers often lack in-house AR expertise. Partnering with the right technology providers and investing in training initiatives can help bridge this gap.

Integration with existing systems

Seamless AR adoption requires compatibility with existing retail platforms and tech infrastructure. Gradual integration and API-based solutions can help simplify implementation.

Customer adoption and ease of use

An intuitive and user-friendly interface is critical for the success of augmented reality in retail. Focusing on customer education and simple, engaging AR interfaces can help retailers overcome this hurdle.

Data privacy and security concerns

Handling customer data responsibly is crucial when integrating augmented reality into shopping experiences. Transparent data handling policies, stringent data encryption and privacy protocols, and compliance with regional and global privacy regulations can help build trust.
Despite these challenges, the future of augmented reality in retail is promising, with merging trends and technology advancements enhancing in-store customer experience further.

Conclusion

Augmented reality-powered shopping experiences are revolutionising the retail industry, bridging the gap between the digital and physical worlds. From improved in-store customer experience to reduced return rates and increased sales, AR offers retailers a competitive edge. As technology advances, businesses that embrace augmented reality in retail will lead the way in delivering cutting-edge customer experiences.