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GUEST COMMENT Why creating an interactive experience will soon be crucial to retailers

Harnessing AR effectively could both boost brand awareness and engage customers

In the last decade since the launch of the first iPhone, our shopping experiences have evolved at the same rapid pace as the technology in our smartphones.

From browsing online and via apps, to scanning barcodes to pay for products, smartphone technology has transformed our shopping experiences both online and offline. Now, the smartphone is the gateway to yet another transformational technology – Augmented Reality (AR). For retailers, harnessing AR effectively could both boost brand awareness and engage customers at the right moment in the purchase journey – particularly if they can elevate the tech from ‘surprise and delight’ to utility.

The AR landscape is already expanding rapidly, with the global market expected to grow to over $198bn (£149bn) by 2025. To date however, it has largely been focused on ‘surprise and delight’ applications – used to engage rather than service consumers. Social platforms, notably Snap, have been pioneering in this regard; Snapchat’s ‘dancing hotdog’ filter, for example, encouraged users to interact with the world around them, and was played over 2 billion times in a 12-month period.

Those who have tried to move AR tech past this entertainment phase are few and far between, and IKEA is one of the notable companies who have succeeded in this space. The company’s IKEA Place app, launched in early 2018, enabled users to visualize how furniture would look in their homes, giving “try before you buy” a refresh for the digital age, and creating considerable value for the customer. Research has shown that there is already a customer expectation that more players will enter this space. Indeed, following the launch of Apple’s ARKit last year, 74% of consumers now expect retailers to offer a similar AR experience.

Research we’ve conducted at Mindshare as part of our report, ‘Layered: The Future of Augmented Reality’, has shown that there is great opportunity for AR technology to be used as an everyday utility tool. We found that over half those we surveyed (55%) agreed it would be useful to receive additional information about an object, just by pointing a smartphone at it, whilst a third of UK consumers believed that AR technology could streamline their shopping experience.

At a time when the high street is increasingly plagued by shrinking footfall, the ability to eliminate friction and offer customers additional layers of contextual information along the path to purchase could provide a welcome boost and competitive edge against e-commerce players. AR-enabled packaging could bring this opportunity to life; for example Bombay Sapphire enabled customers to scan a bottle of gin with a smartphone to provide cocktail recipes, potentially spurring them to purchase additional products.

Similarly, AR-enabled packaging could also be a tool for retailers to serve relevant promotion offers, discounts and cooking instructions to consumers based on past purchases – offering a coeliac a discount on a new gluten-free lunch, for instance. By combining insights gathered from your smartphone data with the functionality of AR, brands are more likely to attract customer attention as well as retain customer loyalty.

Perhaps most exciting, however, is the very real prospect of creating ‘shoppable’ AR, enabling the customer to buy directly from the product itself. Snap have pioneered this space and recently announced a partnership with Amazon to allow the product to be scanned and one click purchase options to appear hovering over the field of vision. Taking friction out of repeat purchasing is of course highly attractive to brand owners and retailers alike.

Beyond functionality, the branding opportunity for those leveraging AR tech is significant. Mindshare’s research, conducted in partnership with neuroscience market research company Neuro-Insight, found that AR experiences drove almost double the levels of engagement of their non-AR equivalent, boosting memory encoding by 70% in the process. Memory encoding is the process by which a piece of information is stored away into long-term memory by the person consuming it. It’s significant for brands, because a brand experience cannot influence future behaviour unless the emotions associated with it have been stored into the memory and subsequently resurfaced at key points during the purchase journey.

To realise AR’s vast potential, brands will need to start thinking differently about the space around us, as everyday physical products now become a potential trigger for content. It seems then, that connected packaging will lead the way as ordinary household items can be transformed into interactive experiences. As brands start to develop their footprint in this space, people will not only start to be on the lookout for these additional layers of content, they will come to expect them. Clearly, as smartphones have established a steady presence in our lives, people are now demanding better, faster and more exciting interactions across all categories, and retail is no exception.

Author: Jeremy Pounder, futures director at Mindshare UK

Image credit: Fotolia

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