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Retail Sales Plummet Amid Lockdown; Augmented Reality is the Solution

**This article written by Alex Chuang, Managing Partner of Shape Immersive, was first featured in TechCrunch on May 6th 2020.

As countries around the world face prolonged lockdown to prevent the further spread of COVID-19, retailers are among the hardest hit. Many have closed all of their brick and mortar stores, resulting in furloughing of many employees.

The U.S. Census Bureau reported retail sales during March 2020 were down 8.7%, the biggest monthly drop ever recorded since the Great Recession. Of the hardest hit categories, clothing store sales were down 50.5% from February, furniture store sales were down 26.8%, and luxury goods are expected to fall 31%.

Before COVID-19, the brick and mortar retail sector was already decimated by online retail behemoths like Amazon and now the sector’s fate seems sealed by the ever increasing threat of the pandemic.

The so-called retail apocalypse may seem inevitable, but in these challenging times, it is more important than ever to look at how technology can turn the tide.

How Augmented Reality Will Transform Retail In The Next Decade

Imagine a future where consumers can virtually try on clothes that would fit them perfectly and they can purchase the clothes confidently in the comfort of their own homes. Consumers will no longer need to choose different sizes because computer vision and scanning technologies would have already determined the perfect fit for them. These virtual clothes will also look so real that consumers will not be able to distinguish them from reality. Spoiler alert- this future is already here.

Virtual-try-on is one of the most compelling use cases of augmented reality technology (AR). With AR, consumers are armed with the information they need to confidently make purchasing decisions that will not likely result in returns for retailers. Retailers can also gain new insights into consumers’ buying patterns by tracking gazes, view history, and time spent looking at a particular product. Retailers can even make the AR shopping experience more personalized by providing real-time feedback.

With over 2 billion AR-enabled devices today and 100 million consumers expected to shop with AR this year, the technology is prime for adoption. Here are some examples of how the world’s leading retail brands are using AR to increase conversion, increase sales, and decrease returns.

Try before you buy, virtually!

Computer vision, AI and AR technologies are essential for virtual try-on applications to work seamlessly. When combined, our devices will see and understand the world as we do.

In Warby Parker’s case they used the iPhone’s face mapping technology to let consumers virtually try on glasses and browse through frames easily. Each virtual glasses automatically fit the user’s face even when they move or tilt their head.

Gucci, on the other hand, partnered up with Wanna Kicks, an AR application that uses computer vision and AI technology to let shoppers virtually try on its line of Ace sneakers. All shoppers needed to do is point their smartphone cameras at their feet and the virtual sneakers will magically snap on to their feet. Because the app recognizes the feet and tracks their movement, shoppers can look at the virtual sneakers from any angle. In this case, augmented reality takes the guesswork out of style matching and saves consumers the trip to the physical stores.

In the cosmetic world, L’Oreal has acquired Modiface to help consumers visualize makeup and hairstyles on themselves in real-time. Modiface uses advanced computer vision, face mapping, and AI technology to perform scientifically validated skin assessment and simulation, photo-realistic makeup simulation with dynamic lighting adaption, and photo-realistic hair color and style simulation. All of these features increase online shoppers’ buying confidence, increase product satisfaction and reduce return rates.

Seeing is believing: 3D realism makes AR believable

In the luxury sector, AR needs to showcase the craftsmanship of the product as accurately as possible. Mulberry expected nothing less of the best possible AR experience so they commissioned M-XR to create photorealistic and AR-optimized 3D models of their latest luxury handbag- The Iris.

M-XR is an innovative startup that is developing proprietary technology that captures exact 3D replicas of objects and environments at scale. Their scanning system can accurately measure real world materials and produce photorealistic rendering of real world objects.

Getting the material right is key to photorealism because material uses an array of textures to describe how the object reacts to light. This type of photorealism makes AR experiences so much more believable. As a result, Mulberry is able to showcase its new product virtually and impress its customers at their special product launch events in Tokyo, New York and London.

“High quality AR experiences pose a perfect solution to keep customers engaged during these difficult times. Augmented reality bridges the gap between the real-world and the digital world, and gives brands the opportunity to explore conversational commerce through compelling storytelling. If brands aren’t exploring augmented reality activations now, then they might miss a huge opportunity.” —  Ryan Howell, Co-founder & CEO of M-XR

On the car show floor, BMW and Accenture are one of the first innovators to develop photorealistic, life-size, extremely detailed car models that the consumer can interact with. Using the iVisualiser app, the consumer can customize the virtual version of their car, save the preferences, and send them to a local dealership to buy the car.

“In today’s world, customer expectations are rapidly evolving. They increasingly want to be able to be immersed in a shopping environment, configure and try-on products, and collaborate with others while doing it, without having to go to a physical store. This is where tools like AR come in, providing new ways to engage consumers on their terms. The BMW iVisualiser is a great example: it was purpose-built to connect with younger generations by allowing them to experience and “try-on” their i-series cars, without having to leave their home or deal with car salesmen. I expect virtual try-on and virtual configuration solutions like this to become a natural part of the new consumer digital journey, for any industry — be it apparel, automotive, hoteling or furniture.” —  Rafaella Camera, Head of Global Innovation & Strategy at Accenture

Similarly, the Ikea Place app allows consumers to virtually place 1:1 scale furniture in their homes so they know how the furniture will look. Ikea has also recently acquired Geomagical Lab to launch Studio Mode, a feature that allows consumers to quickly scan a room, render that into a panoramic 3D picture, and remove all the furniture in it. Consumers can then drag and drop high fidelity 3D furniture into the scene to design their rooms.

“Augmented reality experiences thus far have been limited by the environment within which they’re taking place. Studio Mode with the new iPad Pro presents the potential that AR and AI have to deliver more meaningful, personal and playful experiences,” — Kaave Pour, Director at Space10, Ikea’s research and design lab.

Houzz also reported that within a few months of launching their View in My Room 3D tool , two million people have used AR when buying products in the Houzz app and people who have engaged with the tool were 11 times more likely to purchase.

The Future of Retail Is Virtual

With the release of Apple’s ARKit and Google’s ARCore in 2017, the augmented reality revolution has already been set in motion. AR became a technology that is embedded in 2 billion devices, all through a software update. It is no longer a question of whether AR will be ubiquitous, it is already here with many practical applications in retail.

As many retailers are struggling to survive this pandemic, it is more urgent than ever to invest in 3D technology that will drive more revenue, engagement and value. Social distancing measures may be imposed until 2022 and many experts believe we are heading towards the worst recession since the Great Depression. Therefore, retailers must consider the following digital transformation:

  1. Narrow down a compelling and measurable use case

    Before putting all of your eggs in one basket, understand the categories of products that will perform much better in 3D than 2D. Do consumers absolutely need to visualize this product spatially? Will the virtual assets need to interact with the environment or the consumer? Are there technological limitations that would dampen the experience?

  2. Digitize your catalogue for that use case and create the 3D assets

    3D assets are the cornerstones of any AR experience. Though it may seem like a big upfront investment, these assets will pay in dividends later on. Real world products can be turned into digital 3D models through photogrammetry, 3D scanning or 3D modeling. Each method has its pros and cons and retailers must balance between quality, scalability and cost.

  3. Leverage existing AR platforms to maximize reach

    Apple’s ARKit or Google’s ARCore makes it easy to deploy camera-based AR technology. There are already 2 billion devices that are capable of running AR applications. Using Unity’s AR Foundation, developers can create a cross-platform AR experience that leverages both ARKit and ARCore APIs. Facebook’s Spark AR Studio, Snap’s Lens Studio and 8th Wall are also robust AR platforms that allow marketers to develop fun and engaging AR experiences without advanced coding knowledge.

At Shape Immersive, we believe augmented reality would be the next fundamental platform shift, supplanting the multi-touch interfaces of today. This idea of blending virtual worlds with physical ones opens up an entirely new frontier in which shopping and commerce will be redefined. Having worked with some of the world’s top brands and enterprises since 2015, we have built deep industry knowledge of creating customized AR solutions. We can help you create 3D replicas of your products and integrate AR technology into your workflows. Drop us a line at hello@shapeimmersive.com and let us know how we can help!