August 7, 2017
Augmented reality (AR) is a live view of a real-world physical environment with characteristics supplemented by computerized input. Simply put, the technology adds digital media to its user’s reality. While virtual reality (VR) replaces the real world with a simulated one, augmentation exists in real time with its user’s real-life experiences, and this technology is revolutionizing dozens of industries.
Augmented Reality’s Impact on Other Industries
There are many applications for augmented reality. It was initially developed for military use and expanded to encompass industrial and medical applications. Its potential uses are far-reaching and have already made an impact on education, health care, air and space, journalism, travel, real estate, skilled trades, automotive, marketing, and retail. This article primarily addresses the last two.
Using augmented reality software, 3-D renderings of store displays can create a real-life view.
Using augmented reality improves clarity and understanding on behalf of retailers and consumers alike. Tommy Hilfiger and AT&T outlet stores give consumers the opportunity to try a VR headset and watch 360-degree runway shows. When making vacation plans, buyers can go on a virtual Carnival cruise. Whether in-store or online, augmented reality can help individuals gain a better understanding of their potential purchase.
Augmented reality improves customers’ shopping experiences in-store and online. The typical online shopper’s probability of purchase while browsing a retail site ranges from 2 percent to 4 percent. The purchase rates for brick-and-mortar retailers are between 20 percent and 40 percent, totaling a $3.9 trillion revenue in the United States.
There is an innate set of benefits that comes with online shopping, but the e-commerce experience can leave customers with a feeling of uncertainty. A customer’s confidence hinges upon the retailer’s reputation, customer reviews, and the delivery process. Many customers shop online and buy in stores. By using augmented reality, buyers have the opportunity to know exactly what they are getting, and the confidence in their purchase increases.
Using augmented reality improves clarity and understanding on behalf of retailers and consumers alike.
L’Oréal uses augmented reality for retail and online sales. Maybelline ran print magazine ads instructing its readers how to virtually “try on” the company’s new color range. The average reader engaged for more than four minutes. In addition to the engagement, more than 10 percent of users shared the campaign on social media. The campaign also helped Maybelline predict which colors were trending week to week. Companies that provide their customers with advertisements with augmented reality experiences aren’t just clearly informing them about their products; they’re creating space for buyers to freely enjoy them.
Coca-Cola Germany uses augmented reality to address a number of challenges previously met by its sales team. When selling its beverage coolers, selecting the appropriate designs and sizes to find the ideal fit for each store proved difficult. To demonstrate to customers how the coolers would look in their space, Coca-Cola Germany began using augmented reality, which provided a solution that enabled customers to quickly reach a full appreciation of the product and layout. Company and app developer Augment linked its sales-force-based retail execution app with Coca-Cola Germany’s sales team, and they are now selling coolers with much clearer communication and efficiency. Product size and fit are no longer an issue for Coca-Cola Germany’s sales team as a result of Augment’s real-time access to 3-D cooler models right from their customer relationship management platform.
AR allows customers to see how new products would look in their homes.
Augmented reality is catching on, from manufacturer to shopper. According to Augment, 40 percent of customers would be willing to pay more for a product if they could experience it through augmented reality. Seventy-two percent have purchased items that they weren’t planning on because of augmented reality, and with more than 2 million Augment app downloads, the market is growing.2
The Time Is Right
Recognizing the potential of virtual reality is not a new phenomenon. In 1965, Ivan E. Sutherland published The Ultimate Display, in which he stated, “The ultimate display would, of course, be a room within which the computer can control the existence of matter.” Projecting the imagination on a digital platform into reality offers limitless potential for creative expression and improved communication.
Early adopters have had time to work out the bugs and have established user-friendly modes of delivering and manipulating the technology. The rise of Instagram filters and games such as Pokémon Go! prove that the public is now on board, as well. What once seemed like sci-fi is becoming an everyday part of the consumer’s experience. Apple CEO Tim Cook believes people will “have AR experiences every day, almost like eating three meals a day. It will become that much a part of you.”
The time is right for augmented reality to revolutionize the design process in the packaging industry. Augmented reality technology has caught up with yesterday’s futurists. It is now possible to optimize in-store, online, and call-in relationships so manufacturers, designers, and retailers have every opportunity to produce exactly what they envision.
How Augmented Reality Streamlines the Design Process
AR can bring potential in-store displays to life with 3-D renderings.
The process that allows customers to better understand their potential purchase translates into the packaging industry as well. Shoppers are forcing supply chains to become faster and more responsive. To keep up with increased demands for speed and efficiency, industry has to adapt across the board to meet customers’ expectations. AR streamlines the process through design automation. Manufacturers used to require about 10 months to deliver products from design to conception—now it is a matter of days. Augmented reality demystifies the process of design and visualization, providing clients with an interactive, digital, 3-D prototype, they can manipulate on screen in real time.
Additionally, using the technology is genuinely enjoyable. Dusobox packaging specialist Jason Hays says, “There is something magical about our customers being able to manipulate a model that doesn’t exist yet and place it in multiple places to see what it looks like.” By leveraging augmented reality, Dusobox iterates faster, testing new designs in retail settings in real time. In doing this, deals are closed and sales are made in a more efficient way. An all-digital platform permeates the entire process, including workflow, creation, distribution, and fulfillment. Dusobox CEO John Kelley recognizes the benefits of streamlining the design process: “Now we can get into collaborative discussions regarding POS needs and work with the team in real time, as opposed to days or weeks. … It allows everyone to achieve the largest dividends by capitalizing on the dollars previously wasted on trying to get it right with our visualization first.”
By using augmented reality, buyers have the opportunity to know exactly what they are getting, and the confidence in their purchase increases.
By utilizing AR technology, Dusobox has the capacity to instantly create a rendering of display packaging in the real-world environment. The same technology that allows buyers to try on eyeliner or dial a phone in the palm of their hand now provides clients with the ability to make better-informed decisions about product placement, design, and arrangement. At Dusobox, the packaging in which the product is shipped has become its in-store advertisement and display. Now, by using augmented reality, the client can see exactly how it will look to the everyday shopper, instantly.
The Challenges of AR
With AR software on a tablet, 3-D renderings can be projected to a larger screen for meetings.
Working with new and improving technologies always provides challenges. Kelley states, “The factory of the future will continuously foster and incubate innovation within our industry.” Making an effort to be a pioneer will always carry the potential for harsh consequences, but greater reward. AR provides unique challenges and opportunities in this regard.
Within any process of automation, there are sacrifices of intuition for expediency. What looks perfect in the customer’s hand on their screen still has to undergo the process of being set up and positioned by retail workers occasionally untrained for the task. This is the only step of the process that regularly experiences variables. Since the designer, manufacturer, and AR partner cannot be present in every store to install the displays, compliance can be challenging. To combat these challenges, it is essential to track compliance by validation of proper on-site setup at any given time—whenever and wherever.
How AR Affects the Customer’s Decision-Making
Quality sales and marketing is about clear, concise, collaborative communication. Gone are the days of talking someone out of their money for personal benefit. Using AR is all about customer education. By providing real-time 3-D digital renderings to customers, they are able to see exactly how a POP display will appear. It eliminates variables and provides the manufacturer, designer, and customer with a clear expectation of the final product.
AR also helps retailers visualize the product from their customers’ standpoint. In doing this, AR creates a streamlined mode of communication and provides customers with all the information they need to make an informed decision. In short, there is no simpler way to improve the communication and expediency between supplier and retailer. Using AR to create clear expectations is just the right thing to do.
Chuck Delaney is managing director of GROW Retail Technologies. He can be reached at 708-491-5090 or cdelaney@growRT.com.
