The Trend Already Changing How You’ll Shop for Gifts

In five years, augmented reality will be everywhere

Nov 20, 2019
Marketing

SMITH BRAIN TRUST  Holiday shopping has always required some imagination and a bit of guesswork. But these days, retailers are turning to augmented reality to help consumers eliminate some of that guesswork.

What until very recently seemed like a futuristic pipe dream is increasingly market commonplace, says Maryland Smith’s Jie Zhang, as retail companies across consumer sectors roll out augmented reality (AR) experiences that offer cool features. Now, in-store and in-app AR technologies are reality and drawing positive reviews from consumers.

In the next five years, Zhang says she expects AR technologies to be adopted “prevalently” by retailers online or offline.

The technology has been steadily improving, she says, and driving up interest from retailers, for in-app and in-store use. Modern mall stores will boast virtual try-on technology, creating 3D avatars for an interactive virtual consumption experience.

“The core audience of mobile-commerce (M-commerce) activities has been younger and tech-savvy consumers, who are particularly receptive to technological innovations,” Zhang says. “AR apps allow them to virtualize the look and feel of merchandise which they could not physically inspect, and thus substantially enhance the confidence in their purchase decisions.”

Want to see how those cool new shoes will look on you or someone you love? Lacoste, Converse, Nike and Gucci all have AR technology that can help you visualize the footwear before you buy it. For clothes, there are similar apps from Gap and American Apparel, among others.

And if you want to see how a comfy armchair will look in your sister’s new apartment? Apps from Anthropologie, Magnolia Market and Ikea can help you do that.

Even buying makeup for someone else has become easier with AR execution from L’Oreal Paris and Sephora.

Retailers are using gamification in the apps, piquing the shopper's interest and building loyalty toward the retailers offering them, Zhang says.

As retailers compete for consumer affections, they’re becoming increasingly attuned to the many ways that consumers shop. It’s an omnichannel game, Zhang says, and many retailers are still trying to figure out how to play it.

“A key limitation of retailing via digital channels is the lack of opportunity for a shopper to touch and feel products before placing orders. AR apps are an effective way to reduce this limitation. If done well, AR apps can help a retailer attract and retain more consumers and generate higher spending from them.”

If that makes you wonder what might be next, Zhang has the answer. She anticipates further integration of artificial intelligence, mobile technology, AR and virtual reality tools, as well as sensory devices that incorporate haptic and olfactory senses – in addition to audio and visual effects.

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About the Expert(s)

Jie Zhang is a Professor of Marketing and the Harvey Sanders Fellow of Retail Management at the Robert H. Smith School of Business at the University of Maryland. She received her Ph.D. in marketing from the Kellogg School of Management at NorthwesternUniversity. She was a faculty member at the Ross School of Business at the University of Michigan prior to joining the Smith School. Her general research interest is to apply advanced econometric and statistical models to study consumer purchase behaviors and retail strategies.

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