Richard Corps, managing director and co-founder of Ads Reality, explores augmented reality and its return on investment.
Augmented Reality (AR) is the future of marketing as it applies a digital and interactive layer to anything within the real world. From enhancing how we communicate and entertain ourselves to the way we work and solve problems, AR has the potential to transform how we interact with the world around us.
Retail brands across the world are increasingly sitting up and taking notice of the power of AR technology to engage with their consumers. They are turning to AR platforms to enhance the customer shopping experience by bridging the physical and digital worlds, at a time when it has never been more important for retailers to get creative in how they attract new and existing customers.
Although the technology might be relatively new and applications are being deployed all the time, one of the benefits of AR is that the proof of the return on investment (ROI) is fairly immediate, as long as it’s planned and executed correctly. But brands must ensure the focus is ultimately on what will improve customer engagement, increase sales conversions and promote long term loyalty.
Assessing the market
Originally developed to train military personnel, augmented reality is widely seen as the next big thing in a wide range of different industries, including medical, automotive and, of course, consumer retail. In fact, the latest forecasts show that the global market for AR products is expected to surge 80 per cent to $165 billion by 2024, according to Global Market Insights.
Apple’s Tim Cook has likened AR’s game-changing potential to that of the smartphone, and Mark Zuckerberg recently said that Facebook expects to turn artificial intelligence, ubiquitous internet connectivity, and virtual and augmented reality into viable parts of its business over the next decade as it looks to new advertising opportunities.
Emerging retail trends are changing customer experience and forcing retailers to re-examine their infrastructure and digital strategy. Shoppers expect more in both their online and in-store experience and, as a result, retailers are under pressure to respond to everything from new store formats to more convenient payment methods.
Augmented reality technology offers retailers the opportunity to bring an image, product label or shopping window to life, driving customer interaction and ultimately sales. But with so many potential applications for the technology in retail environments, how do you measure ROI to justify any financial commitment?
AR technology is all about connecting the digital with the physical to offer the user real-time digital information, images or experiences. Users can then interact further with this virtual layer to find out more information, associated products or add it to their basket.
For retailers, this means that marketing and promotional campaigns can get real-time data that can be used to measure ROI. For example, once the technology has been integrated into a retailer’s app, customers have the ability to scan products and images. As soon as they do that, the retailer can view the data showing the products that are being viewed, for how long, which location, what else they look at and whether they go on to purchase, incredibly valuable and difficult data to gain without AR technology – instant validation of the technology and it’s ROI
Quantifiable customer engagement
For brands, customer loyalty is key to revenue growth and depth of engagement, whereas breadth, is important for brands competing for mindshare. Studies show that engaged consumers buy 90 per cent more frequently, spend 60 per cent more per transaction and are five times more likely to indicate it is the only brand they would purchase in the future.
All of these factors lead to engaged customers delivering three times the value to a brand over the course of a year.
AR technology enables brands to achieve an enhanced level of engagement. That’s because in many ways we are in a transition toward the next internet, where instead of looking down into a device we will be looking through a device to experience the internet all around us.
Brand marketers who don’t have the budgets to execute TV campaigns, and are looking for more accurate engagement stats than can be found from traditional digital display campaigns, can benefit from using AR to enhance the value of their product and establish a competitive advantage.
Retailers looking to deploy an AR solution need to ensure a successful strategy is put in place that delivers real, tangible results, is customer centric and it’s not just seen as a cool and wacky ‘nice to have’ technology. Brands that fail to do this will deliver a disjointed customer experience and run the risk of losing customers to their competitors.
The good news is that the real-time dynamics of AR technology, combined with its deep level of engagement, ensures that retailers can quickly see a return on investment. The latest technology provides retailers with an analytics platform that can provide a wide range of live metrics including conversion data.
AR campaigns resonate with consumers in a way that most other ad platforms don’t. Accessible by tablet or smartphone at a click, AR apps add value to the user journey anywhere, at any time. They help the user to make purchasing decisions, increase the ‘fun factor’ and enable them to get more out of their products.
In an incredibly competitive arena, it’s time for retailers to think a little differently to win new customers.