Can Augmented Reality Change the Face of Retail?

Pokémon Go has taken the world by storm with millions of users taking to the streets to play the game. Unsurprisingly, brands are asking what force the app has tapped into and how they can inspire their own audiences in the same way. While there is certainly a powerful nostalgia component to Pokémon Go’s success, brands should also explore the app’s underlying technology as an opportunity to accelerate its digital transformation and redefine the retail customer experience.

Nostalgia Meets Technology

Pokémon is a Japanese media franchise created in 1995 which spawned a host of video games, TV shows, collectable cards and other merchandise. The concept of Pokémon is simple: people in a fictional world capture and collect cute (but sometimes terrifying) creatures and use them for one-on-one battles. In its early years, the franchise appealed to young people growing up in the late nineties and early 2000’s—millennials, in other words. Couple the popularity of Pokémon with the first truly digitally native generation, and it’s no surprise that an app that lets users become real world Pokémon trainers would find such a receptive audience.

Given the strategic importance of millennials as a customer segment, brands tapped into the trend rapidly, trying to demonstrate relevance. For some brands, this meant creating social content incorporating Pokémon into their brand. Others latched directly into the app, using it to drive foot traffic. Yelp has even added a filter to its search criteria, giving people the option to search for nearby “PokéStops” when they were deciding where to dine.

However, by borrowing credibility from Pokémon, brands are not building sustainable advantage. After all, it is difficult to predict the staying power of Pokémon Go. Rather than focusing on marginal gains in affinity from tapping into nostalgia, brands should look to Pokémon Go’s underlying technology for inspiration to create meaningful value for customers through digital transformation.

A Newer, Better Reality

Pokémon Go leverages a form of augmented reality (or mixed reality, depending on who you ask), a technology that uses hardware to superimpose information, graphics and other content onto the real world. Unlike virtual reality, which replaces one’s senses with a completely new environment, augmented reality is designed to enhance the real world by adding new elements to it.

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For decades, AR has demonstrated its value in the worlds of aviation by overlaying important avionics data across the pilot’s field of vision. Now with the rise of smartphone and wearable technology, AR has found a new fertile hardware territory which has yet to be fully exploited commercially.

Though AR is still developing, brands have already started to recognize that one of the final frontiers of digital transformation, retail, can be revolutionized with AR. While Pokémon Go has helped some brands generate foot traffic, AR as a whole can offer customers an integrated digital experience from start to finish.

5 Brands Enhancing Retail Customer Experience with AR

Some brands have taken baby steps into merging offline and online experiences by using in-store apps to help guide customers through stores. Macy’s has partnered with IBM Watson to create Macy’s On Call, an in-store shopping assistant powered by AI and voice recognition, to deliver customized assistance to shoppers.

In the beauty industry, companies are using more fully featured AR experiences to inform customers in their makeup purchasing decisions. L’Oreal for instance has an app called Makeup Genius that lets customers experiment with different colors before they buy. Sephora has gone a step further by creating an AR app offering users tutorials and exclusive offers based on how they use the app in-store.

Companies that sell through distributors are finding that AR is a novel way to get their products to stand out on shelves. Brands like Oreo and Cheerios use the AR app Blippar to educate, entertain or engage customers with mobile experiences that connect directly to the physical product. In the ultra-competitive FMCG sector, AR is a way of building consideration in an environment otherwise dominated by package design and price.

Are You Ready For Augmented Reality?

Pokémon Go has demonstrated an appetite and even an eagerness among customers to merge mobile experiences with offline ones. With increasing adoption of wearable technology and exciting developments in AR glasses, consumers will begin to expect digitized experiences, even in traditionally brick-and-mortar contexts. There is still a lot of work to be done to create seamless, unobtrusive retail customer experiences, so brands should carefully evaluate the potential value of digitizing their offline offerings with AR (or other technologies).

As a part of defining a digital transformation strategy, decision-makers should ask themselves:

  • Do my customers already use their mobile devices in-store to research items they are physically browsing?
  • Are my customers confused or overwhelmed by the options they have in front of them?
  • Do my customers often seek help finding certain items or ask associates for recommendations?

Answering yes to any of those questions indicates a gap in the retail customer journey that AR can potentially fill. The key to AR, as with any emerging technology, isn’t to rely on its novelty factor, but instead to address a real barrier in the retail customer experience. Broadly speaking, augmented reality is still in its infancy, but Pokémon Go should send a clear message to brands: customers are ready for augmented experiences; how will you respond?

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