Looking to the future of physical retail with AR. Brick and mortar stores are evolving, offering new experiences that build relationships with customers in ways that simply cannot be replicated online. This is changing the way we shop - and AR is at the forefront.

 

Despite the foreboding talk of the ever-incoming ‘retail apocalypse’, brick and mortar stores remain at the heart of our regular shopping experience. That may sound surprising with the unprecedented popularity of online shopping. Indeed, 2019 is shaping up to be another huge year for e-commerce, with forecasts predicting 15% sales growth for the coming year combined with the continuing success of direct-to-consumer brands.

But hyperbole over the slow death of physical retail has been greatly exaggerated and for all the justified excitement about the online alternatives, almost 90% of spending is still due to take place physically in-store this year. This is exemplified by Amazon’s ‘4-Star’ foray into physical retail - a major brand synonymous with online shopping acknowledging that it cannot exist online alone and reaping the benefits of enhanced brand awareness and sales across the business.

So physical retail has certainly not stood still - smart retailers have evolved to meet the challenges of a changing retail landscape. The allure of shopping from home has meant that the in-store customer experience has become more important than ever, triggering a shift in focus so significant that it is re-imagining the way we shop.

Savvy adoption of technological advances that hold the power to excite and engage customers in new ways have been a key factor in physical retail resilience - curating physical shopping journeys that add real value in ways that would be impossible online. In other words, we’re seeing a survival shift of shops becoming an experiential environment where brands can connect with their audience, rather than simply a place for transactions.

 

The way we shop has evolved

In-store tablet, customer apps, beacon technology and browse-and-order hubs have all emerged as ways for retailers to bring the best of digital onto the shop floor to enhance the in-store experience. However, where many retailers are missing a trick is with augmented reality. With shoppers increasingly likely to be using their smartphones while browsing in a store, augmented reality optimises this growing channel by giving retailers new ways to interact with customers and strengthen customer relationships while increasing propensity to purchase.

What’s unique about augmented reality in the retail space is the entertainment edge it brings – Zappar’s focus on ‘infotainment’ brings shoppers something that makes their retail experience more enjoyable, encouraging them to spend longer in store, visit more often and rewards them for it - ultimately making them feel more positive about the retailer.

 

Experiential retail in action

We’ve conducted some really exciting creative work with major retailers that have shown the concrete results of this approach. Our collaboration with Tilly’s transformed their retail experience across 200 stores, including an AR treasure hunt that encouraged store exploration and interaction with hero products.

The incentive of discount codes and instantly shareable social media content fronted by famous YouTuber ‘Shonduras’ was a huge hit with customers, with 55,000 scans and users spending an average of three minutes per visit connecting digitally with the Tilly’s brand.

 

 

“The promotion drove tens of thousands of entrants to stores, who yielded an 80% coupon redemption rate, 99.6% opt-in for push and location tracking via the app, and a 23% hike in app downloads during the event”

- Jon Kubo, Chief Digital Officer, Tilly’s

 

Similarly, the massive 10,000 store rollout of Zappar-powered AR experiences in 7-Eleven outlets across North America brought impressive engagement as part of an always-on digital strategy. It began explosively with Deadpool-themed AR mayhem transforming the in-store experience for shoppers, featuring a wide range of mini-games, redeemable rewards and compellingly shareable selfie opportunities. This formed part of a content calendar of timed-exclusive AR content available via the 7Rewards app from scanning codes in-store (or directly from the app), adding value to customer visits and encouraging regular interaction with the retailer’s digital channels.

Later experiences included a Reese’s themed football high score attack, the opportunity for a signed selfie with Dallas Cowboys star Dak Prescott and a partnership with Red Bull that brought the irrepressible Pac-Man chomping into AR. This added a whole new dimension of fun for shoppers who earned in-store rewards for taking part and sharing content and forms part of an always-on connected strategy.

 

 

“55 million customers visit us every day...40% of them are millennials...so we have a strong base of customers who are looking for these kinds of (AR) experiences to engage with us, get educated about our products, get inspired...so now we've created a 'platform' we're going to look to do more stuff, create (in-app) gamification, engage them with...sports, maybe more movies.”

- Gurmeet Singh, CDO and CIO, 7-Eleven

 

In another example of leveraging the power of AR for a national retail chain campaign, our team brought a festive AR extravaganza to over 1,000 Walmart stores across America for the 2018 holidays.  These experiences involved collaboration with numerous household name CPG partners, meaning mini-games and shareable selfie opportunities were a perfect opportunity for shoppers to interact with their favourite brand mascots from the likes of Frosties, Cheetos and Paw Patrol.

These experiences not only rewarded shoppers with large helpings of holiday cheer, reflected by the five star app rating. It also reinforced Walmart’s retail identity as the home of major brands, adding significant value for their product partners by empowering customers to connect with them in 3D space, going far beyond shelf space visibility.

 

 

The key thing these examples share, something we are particularly excited about when it comes to AR’s power to enhance the retail environment, are experiential reasons for customers to repeatedly scan and keep returning to stores. The addition of mini-games that gamify loyalty point collection can combine with a curated calendar of exciting new AR content that makes repeat store visits valuable; not just for browsing and purchasing, but for connecting and experiencing exclusive content as it unlocks.

As the retail environment changes, so too does the adaptability of AR - transitioning from one-off ‘surprise and delight’ experiences to a truly connected digital marketing channel that brings brands closer to their audiences than ever before.

 

Rewarding customers and building relationships with AR

Importantly, these kinds of experiences can also serve as a value exchange to build a retailer’s owned digital channels. For example, the offer of an exciting AR experience that is incentivized and rewarding can live embedded within the retailers’ own app, driving app downloads as a direct result. Our work with ASDA (a leading UK grocery retailer) was emblematic of this relationship between compelling AR experiences and encouraging app downloads and usage - with our AR Easter Egg hunt coinciding with the ASDA app’s first appearance in the App Store Top 100.

 

 

The retail possibilities of AR continue to evolve alongside the innovation of designers, and we’re excited to see this progress in 2019. One particularly interesting avenue for growth is in utilising AR to inject brands into the storied heritage of their community, letting curious audiences explore the relationship between a retail space and its wider environment. We’ve pioneered creativity in this direction, working with the iconic New York fashion brand Kate Spade on the launch of their flagship Paris store. Customers were invited to engage with local ‘Joy Walks’ - curated explorations of local landmarks with highly shareable geo-located AR experiences that artfully combined Parisian style with a New York twist.

It was a great way to announce their arrival and highlight how Kate Spade’s brand values and aesthetic fitted seamlessly into their new surroundings - showing that with the right creative partner, brands can really do incredible things with AR that transcend expectations.

 

 

The fun certainly doesn’t need to stop when leaving the retail space, either. Smart use of in-store marketing collateral with a compelling call to action (informed by our ‘Three C’s’ approach!) can be a great way to inspire customers to explore retail opportunities from home, adding real value to their visit by extending the showroom experience in contextually relevant ways that drive future purchases.

For example, our work with Nespresso enabled customers to not only explore their range of products in 3D from their branded app, but also customise the product’s colour and place them directly into their own home using AR. These experience add tremendous value by helping customers make well-informed purchase decisions by empowering them to ‘try before they buy’ - taking the initial in-person retail experience and building valuably upon it with AR.

 


 

Using AR to maximize brand reach and collect valuable data

Augmented reality can also help extend brand reach, and present products to shoppers who might not usually buy from a particular retailer. At Churchill Square shopping centre in Brighton, for example, we helped deliver a virtual fashion show featuring garments available at outlets across the centre. This delivered product information and exclusive special offers to shoppers in real-time, driving engagement, footfall and sales across stores (all garments included in the AR fashion show sold out!).

We can collect additional data in near real time so we can give an insight into shopper behaviour. The figures don’t lie: average dwell time in a Zappar experience is over 75 seconds with a repeat zap rate of 2.8 times.

There are unique challenges to be overcome when implementing augmented initiatives on the shop floor and as per our ‘Three C’s’ approach, scanning context is exceptionally important. For example, retail environments are often noisy so we use subtitles on the Zappar app to encourage shoppers to put their headphones on or turn their volume up. Similarly, larger shopping centres may have areas that don’t have the optimal 4G coverage required to bring augmented reality to life, but this is rapidly changing, as well the increasing ubiquity of good Wi-Fi access.

Overcoming these challenges, however, can bring real dividends to retailers looking to better engage with customers, bring new dimensions to the in-store experience and boost sales, and we are truly excited about the role that augmented reality is set to play in the future of the High Street and Main Street alike.
 

Final Thoughts

Zappar has a track record of delivering fantastic retail AR campaigns that provide tangible ROI and can delight, engage and excite shoppers. If you’re a brand looking to enhance their retail presence with the transformative power of AR, we’d be delighted to hear from you to discuss your objectives and ideas. We are soon to be attending NRF 2019 in New York on January 13-15, so why not come by and see us at Booth 2437?

Remember, our mission at Zappar is to truly democratize AR and the benefits of this exciting technology are certainly not limited to the major outlets. Our work with SMEs has had some tremendous results and we’d encourage you to check out our case study with ZapWorks user, Charley’s Appliances. And if you’re an AR creator who’s been inspired by the possibilities of AR for retail, there’s a friendly community of AR enthusiasts just waiting for you over on our Forum to discuss your ideas.

 

 


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