18 Jan 2023
Editorial Content Writer
80% of shoppers use their phones while in-store yet many businesses are still struggling to take advantage of this. With the help of augmented reality (AR), factoring this reality into your omnichannel strategy can give a business a serious advantage over its competitors.
“Technology is the campfire around which we tell our stories.” - Laurie Anderson
In this article, we’ll discuss:
The definition of AR and where it intersects with omnichannel
Why the time is right to build an AR strategy
Which retailers are getting AR right
How Talon.One can help supercharge your AR promotions
Augmented reality (AR) is not to be confused with Virtual Reality (VR). VR allows the user to navigate virtual worlds from any location. AR superimposes digital content (images, sounds, text) over a real-world environment. They overlap insomuch as they empower the user to navigate with extra information and context, opening up new kinds of interaction that would have seemed impossible before.
AR has existed in some form since 1968 and the potential it represents has been a long-time fixture of science-fiction. Increasingly, however, AR has moved from science-fiction to ‘science fact’ for the regular consumer — as smartphones become powerful and the supporting technology improves. It’s not just technology either, apps like Snapchat have made great strides in getting people comfortable with digital enhancements added to images in real-time by making it seem like a cute and fun addition to normal life. With increased adoption and normalisation, there is now space for great innovation in the AR space — with users now actively seeking ways to enhance their interactions.
In tandem, another evolution in retail is the proliferation of omnichannel approaches to customer engagement. An omnichannel strategy is “a holistic approach to customer experience which provides retailers with the opportunity to blend in-store and online channels in order to create frictionless and memorable customer journeys.”
With AR increasingly used by consumers for lifestyle and entertainment, it’s not hard to see that brands that can unlock the omnichannel conversion potential of the new medium will be at an advantage.
The basis of omnichannel is sharing information and service benefits across every retail channel. By linking app, website and in-store channels, users can get the most out of their relationship with a brand. Augmented reality doesn’t just allow users to benefit in-store from the kind of services offered online, it can overlay the users’ preferences onto the very store itself.
There’s also potential for users to create a virtual store wherever they are. Imagine an app that tracks a user’s loyalty membership, generates coupons they can use in-store, updates them on relevant offers, allows them to get a good look at a product, with the added bonus of seeing it in a real-world context, and gives them the option to purchase it directly.
When designed for every stage of the buyer's journey, Augmented Reality is close to Omnichannel retail at its most definitional. All the benefits of every customer channel are combined seamlessly into a convenient experience with minimum friction. Eventually, customer familiarity becomes customer expectation. As AR becomes the norm, it will increasingly become as serious a customer channel as selling through social or a bespoke branded app.
The first big impact smartphone AR had the public consciousness was undoubtedly Pokemon Go, a free-to-play mobile game developed by Niantic and Nintendo and released in 2016. Pokemon Go took the familiar “gotta catch em all” mechanic of capturing, training and battling colorful monsters popularized by the Pokemon video games and superimposed them onto the real world. All of the game’s addictive mechanics were now tied to specific physical locations.
Pokemon GO was not without problems, such as trespassing and careless driving complaints. Any globe-spanning game that encourages people to go explore is going to stumble into some minefields (literally). If anything, this makes Pokemon Go a globe-spanning stress test for the concept of AR as a whole. Overwhelmingly, the response was positive. By the end of 2016 the app had been downloaded 500 million times. Moreover, those normally critical of the sedentary lifestyle supposedly fostered by video games were impressed by how it encouraged users to venture into the outside world and meet people. Now AR had a proven mass appeal.
It’s been six years since Pokemon Go took off and plenty of brands have used AR since then, largely for promotional purposes. However, perhaps counter-intuitively, now is the best time to use AR precisely because the novelty has worn off. Familiarity created by Pokemon Go and filters in apps like Instagram and Snapchat means there’s been an exponential growth in the number of people who see it as second nature. 70% of consumers aged between 16 to 44 years old are now aware of AR. This pre-existing knowledge is what shifts AR from technology used largely for novelty’s sake to a channel that can be fully incorporated into the buyer's journey.
“Secrets...are the very root of cool.” - William Gibson, Zero History
In fact, the Pokemon Go factor could be a powerful tool in getting customers to return to physical stores after the huge migration to online during the early days of the Covid pandemic.
Everyone’s had the optimal experience of walking through the doors of a supermarket you frequent only to suddenly find yourself outside with all the items you need (okay, maybe one missing item). You’ve frequented a store so much it has become second nature. Equally familiar is the betrayal felt when walking into your local supermarket after an intensive renovation, trapping you in a maze of newly-installed juicing stations and self-checkout tills.
Augmented reality can always place customers on the positive side of this experience. By enhancing customer navigation of the store with a mobile app, they can always know the best deals, where everything is, and even what’s in stock — even if it’s their first time in the store. Combine this with personalization and a customer can enter any franchise and instantly know where their favorite products are, what promotions they’d like the most, and even receive specialized promotions created just for them. Their first time through the door and everything is already second nature.
“Make a customer, not a sale.” - Katherine Barchetti, Founder Of K. Barchetti Shops
The possibilities of Augmented Reality aren't just theoretical. Plenty of industry leaders already use it to transform their buyer's journey. Here are some stand-out examples:
Sephora has made a huge push to consolidate their omnichannel offering, with great success. Its Virtual Artist app allows users to try on different eyeshadows, lip colors and false lashes using their phone. The Virtual Artist app generated a huge buzz but its purpose was practical. Even the minority negative criticism showed they crossed the rubicon from novelty to utility, with customers comparing and contrasting it to the advice they would get from an expert at an in-store makeup counter. Crucially, Sephora Virtual Artist also allows customers to purchase directly from the Sephora app.
One of the strengths of Omnichannel is that it changes a user’s experience of a business from a place to buy things to an integral part of their experience with that product line. With 71% of customers being more likely to purchase products after researching them on social media, a strange social strategy has become mandatory in modern retail.
However, the utility of social media to brands has surpassed just marketing. Many networks now facilitate direct sales through their service, drastically shortening the buyer’s journey. Now a user can see their friend wearing something they like, click to see which company is tagged in the post, click the tag, see a post for clothing they like and be instantly given the ability to buy that item. This whole process can happen in a matter of minutes without ever leaving an app that average users look for 28 minutes a day. Social-media exclusive coupons give users an incentive to follow, therefore getting updated with new products as they’re released with the ability to purchase them instantly.
Kohl’s is a great example of a brand harnessing the potential of both AR and social selling.. Their Kohl’s Snapchat Virtual Closet uses AR to allow users to virtually try out clothing, walk through a virtual store and make their purchases. The whole implementation is impressive, especially in a third-party app. The crucial element, though is that Kohl’s social AR experience combines availability through a popular app and the ability to purchase. Many bespoke apps designed to visualize how a product, such as clothing brands or furniture stores, do not feature the ability to then make a purchase. They are still effective marketing tools but have yet to fully streamline the “see it, try it, buy it” experience of physical retail. Kohl’s Snapchat Virtual Closet shows the superiority of an omnichannel approach.
In 2019, Lego and Snapchat partnered to create a London pop-up that pushed AR to its limit while launching a limited-edition collaboration between Lego and clothing brand Kabooki. Customers were presented with a pop-up that was totally empty aside from a single plinth displaying a Snapcode (Snapchat’s proprietary take on QR codes). When customers scanned the code, they were able to view an entire virtual Lego store experience built within Snapchat’s Lens Studio. This included a Lego bouncer, a Lego DJ booth, Lego mannequins and clothing racks. Importantly, they could also purchase directly within the experience.
Lego and Kohl’s have both used Snapchat to completely different ends. Kohl’s AR app gives users the fitting room experience wherever they are. Meanwhile, Lego’s AR experience makes one physical location more accessible. AR may still be associated with novelty, not every brand needs a virtual bouncer, but this shows the potential practical application of the medium. It’s telling also that both Lego and Kohl’s are not using bespoke apps, instead of functioning as part of an app their customers are likely to have installed. Omnichannel is, after all, about meeting customers where they are.
It’s doubtful many regular businesses would be willing to go to the extremes of converting a physical location into an entirely empty white box. However, there are some key takeaways that should be useful for any business considering adding AR to their omnichannel mix.
Easy, branded access: the Snapcode was visible right at the front of the pop-up over the text “scan to shop”. This made it extremely straightforward for customers to understand what was going on while also presenting them with a large Snapchat logo.
Transformative potential: Lego used AR to transform a space but also did so in a way that was organized and coherent. Even when not operating with a blank canvas it’s worth considering both how much AR can change the customer experience and how integral coherence was to that design.
Practicality: in addition to the DJ and the bouncer, the pop-up provided a branded way to actually see how the clothes would look, bridging the gap between novelty, brand identity and practicality.
Brick and Mortar: Though partly due to its novelty, this AR experience got customers to physically travel to an empty store and, most importantly, actually make purchases while there.
Personalization: while the personal experience offered by the Lego pop-up extended to allow each user to try clothes on a lego mannequin, many customers simultaneously having their own experience in the same space represents the massive potential for how AR could be used for personalized loyalty and promotions. Every customer gets their ideal version of a business.
Augmented reality can be a powerful way to boost your omnichannel promotions strategy but it needs to be built on a solid foundation. Talon.One’s promotion engine is the key to creating the hyper-personalized promotion experience that can be adapted to every channel of your business. By using Talon.One’s rules builder, every piece of customer data you have can be leveraged to create in-depth, tailored promotions that make your augmented reality experience extra engaging. Talon.One provides the power and scalability to ensure your customer’s experience stays consistent and you can keep delivering on the promise of an individual experience for each customer without running into any technical issues.
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