By David Levine, CEO of mixed reality start up DigitalBridge, on the topic of AR.

Deciding whether or not to take the plunge and make that expensive purchase can be tricky.

In fact, this indecision—known as the “imagination gap”—is costing UK retailers an estimated £1 billion a year, due to consumers opting out of expensive purchases, like a new kitchen or bathroom product, after being unable to imagine how these products will actually look in their home. In the US, this cost is even bigger as the kitchen, bathroom and bedroom market alone is worth nearly $50 billion.

Our own research found that a third of all consumers were regularly walking away from making a purchase and delaying a decision, or failing to make any decision at all, just because they couldn’t picture products at home and were too concerned about making a bad choice.

Considering that over half of homeowners are planning to make some kind of kitchen, bathroom and bedroom upgrade in 2017 – with budgets ranging from £1,000 to more than £3,000 per project – emerging technologies which aid their buying decisions, such as augmented reality (AR), are poised to have a major impact across the industry. Potentially changing the face of retail forever.

Try before you buy

Being unable to visualise what a new and expensive bathroom or kitchen would actually look like in their own room has been a long-standing frustration for consumers – and a commercial challenge for retailers – but AR could finally have the answer.

AR works by overlaying digital representations of objects and information on top of the real world via devices like smartphones or tablets.

In the home decor sector, for example, this means consumers can “place” products such as kitchen or bedroom products into their rooms to see what they look like before purchase. Uploaded pictures are rendered into 3D digital replicas, enabling users to transform any aspect of their rooms by placing new furniture, like beds or kitchen furniture, into the space to see how it looks.

Machine learning can ensure the virtual model remains accurately scaled, so users get a realistic idea of how the furniture will look and fit in their home before they buy.

Virtual worlds, tangible benefits

We recently conducted research that found that more than half of consumers (51%) have decided against a kitchen, bedroom or bathroom renovation project in the last 12 months because they couldn’t imagine what the finished project would look like.

AR can help tackle this problem head on by allowing consumers to overcome the “imagination gap” which saps so much potential revenue for retailers. And it seems there is a strong demand from consumers for retailers to implement this technology, as our research also found that one third of consumers are more likely to make a purchase on the spot if they were given access to an augmented reality platform first – a significantly shorter time than the six months it currently takes the majority of people to decide on a bathroom purchase.

These are not small purchases to make and being able to test multiple options before spending any money would be a major benefit for consumers and an entirely new kind of shopping experience for retailers to offer.

From transactional to experiential

Some high street retailers are struggling to compete with the rise in online shopping but AR presents an opportunity for these retailers to boost their offering.

AR enables retailers to explore new ways of gaining shoppers’ attention in physical stores—shifting from a purely transactional model to an experiential one. The technology can blur the lines between the real and the digital worlds, helping to bring products to life.

Early pioneers include North Face, which “transported” customers to California’s Yosemite National Park to try out their range of outdoor clothing in a simulated outdoor environment. This was a great way to use the technology to directly influence in-store sales – using immersive storytelling to demonstrate the benefits of their products, while giving customers an experience they’ll never forget.

What are retailers waiting for?

Immersive storytelling and increased engagement translate into a bigger impact on the bottom line. But despite being used to great effect by the entertainment industry, the technology has been largely overlooked by retailers to date. And consumers are noticing. More than half of those we surveyed (51%) think retailers are failing to take full advantage of the technology now available to them.

However this is set to change.

The surprise success of Pokemon Go last year proved that AR can capture the imagination of the public. Meanwhile, Snapchat’s exploration with AR, has been a big hit with social media users for some time.

The public is ready and wants more. And now Apple and Google are set to drive widespread adoption amongst businesses and consumers.

Apple’s ARKit platform will allow iOS developers to blend the real and digital worlds to create immersive experiences on the latest iPhone and iPad. This will be the first mass-market product to really show off the potential of AR—and could represent the biggest revolution in consumer technology since the launch of the original iPhone 10 years ago.

Meanwhile, Google is set to launch its rival platform, ARCore, for developers designing apps for Android. And as Android and iOS accounted for 99.6 per cent of all smartphone sales at the end of last year the opportunity is huge.

The new reality is closer than you think

AR is poised to explode over the next 12-18 months, driven by consumer demand and underpinned by key advances in software and hardware. The enterprise segment of augmented reality alone has grown 60% in the last year.

Both ARKit and ARCore will make it easier for retailers to create compelling AR experiences — increasing conversion rates and average order values while driving increased footfall with immersive experiences.

Retailers, particularly those in the home décor and KBB market, should therefore grasp the opportunity now by developing engaging solutions that realise the full potential of this exciting technology.

One comment

  1. I agree completely with the article, but not on the numbers.
    Surely the survey could have reported that, but I guess that even if there was AR, most of the people wouldn’t have bought that piece of furniture anyway. If you need a new kitchen, you buy a new kitchen. If you don’t need it, you think about sparing money. AR can increase conversion rate, but not by those enormous percents.

Leave a Reply