AR puts our imaginations to work when we shop

Digital enhancement can make us more comfortable with purchasing decisions

Advances in technology are rapidly transforming the retail environment, whether it be e-commerce, improvements in mobile technology or the use of social media for marketing and word-of-mouth. 

But it is augmented reality (AR) – the digital enhancement of reality using transformable holographic information and visuals in real time – that stands out as a harbinger of where the retail world may be headed. 

In a relatively short space of time, AR has gone from being a sci-fi-like solution to retail woes, to something many consumers expect to experience when they shop. 

Retailers have taken note. US eyewear chain Warby Parker, for example, has an app that uses facial recognition to let customers virtually try on glasses; fashion outlets such as Macy’s, Timberland and Zara are trialling VR 'magic mirrors' in their stores; while furniture retailers are developing apps that allow shoppers to place 3D, true-to-scale items of furniture in their home or office to see how they would fit and look. 

AR is also whetting diners’ appetites. New York technology start-up Kabaq has developed technology that allows customers to see virtual 3D food on their table in-restaurant and when ordering online. 

Co-founder Alper Guler says the idea came to him when some of his friends had trouble visualising the dishes on the menu at a Turkish restaurant. The Kabaq team saw an opportunity to create a more immersive food experience for today’s image-obsessed consumers. 

“Kabaq fills a large gap in the emerging market by providing true-to-life presentation and dynamic storytelling,” Guler told Forbes magazine. 

'We already know that consumers are willing to adopt the technology and that, generally speaking, AR outperforms traditional media such as pictures or billboards'

JONAS HELLER

Decision comfort 

Guler is working with Jonas Heller, a PhD candidate in the school of marketing at UNSW Business School, and a team of researchers to help uncover how and why consumers interact with holographic content and how it affects their decision-making and subsequent behaviour. 

AR’s value, says Heller, is the way it makes us feel more comfortable about our purchases. By putting the customer’s imagination at the core of decision-making, AR does some of the cognitive heavy-lifting for us, helping to virtually dress us, apply our make-up, furnish and paint our home. 

“Retailers are looking to future-proof their frontline product and service offerings with AR, and our research helps them understand how they can do this most effectively,” says Heller. 

Heller, along with Mathew Chylinski, an associate professor in the school of marketing, and their international colleagues have drilled deep into exactly how AR affects our purchasing behaviour. 

Their recent paper, 'Let Me Imagine That for You: Transforming the Retail Frontline Through Augmenting Customer Mental Imagery Ability', addresses some key questions about the best ways to use AR. 

The UNSW researchers are also part of the Augmented Research Group, a  global team of  researchers  studying how consumers, businesses and marketers use AR technologies. They also collaborate on lab experiments. 

Drawing on mental imagery theory, they have developed a conceptual framework to reflect how AR matches our cognitive processes, how it makes us feel more comfortable about our shopping decisions, motivates positive word-of-mouth and encourages us to buy higher-value products. 

And using a series of experiments at UNSW’s BizLab, the researchers probed how different forms of AR improve the chances of a consumer making a confident buying decision, says Heller. 

“We measured consumers’ decision comfort in our laboratory studies as previous research has shown that the feeling of comfort consumers have in the pre-purchase [stage] can significantly impact their willingness to buy a product and reduce the probability of deferring choice,” he says. 

In the lab, participants used tablets to manipulate objects at graduated levels of AR, ranging from a basic amount of digital enhancement to a high level where objects such as meals and furniture could be resized and rotated in three-dimensional space. 

Word-of-mouth

The experiments confirmed that ‘decision comfort’ is clearly improved by AR. When a customer has a deeper understanding of a product they are less likely to pull back from a purchase. 

The research also found customers were likely to tell others about their AR-assisted shopping experience, creating a virtual loop that drives more traffic to a retailer and increases their reputation. 

“We asked participants how likely they were to share their AR retailing experiences with peers. On a scale from 1 (completely disagree) to 7 (completely agree), we measured several statements on word-of-mouth engagement and found that AR led to significant higher word-of-mouth.” 

There are plenty of other things retailers need to think about before adopting AR, says Heller, such as which kinds of AR manipulation work best for a product or service, and whether all consumers react in the same way to a virtual shopping experience. 

For example, it is important for a consumer be able to visualise an item of furniture in the context of his or her own home so an AR tool that can digitally place a coffee table in a customer’s living room will be more effective than one that just displays a coffee table in three dimensions. 

AR offers a double reward to online retailers, helping convert interest in a product to an actual purchase and cutting down on one of the most nettlesome problems faced by e-commerce players: returned merchandise. 

AR has also made inroads in actual stores but it isn’t clear to what extent they have generated increased sales. Fashion retailer Uniqlo’s AR-enabled mirrors, for example, enable customers to see what they look like in a garment in a range of colours without having to actually try them on; in this case, AR is more like a labour-saving device than a sales generator. 

Heller says its early days for AR research in the retail sphere. 

“We already know that consumers are willing to adopt the technology, and that generally speaking, AR outperforms traditional media such as pictures or billboards,” he says. 

“However, retailers and marketers have a strong need for further research into different features of AR, which devices – phones, tablets, AR glasses – will be adopted by most people, and for which product categories AR will be most effective.” 

The Augmented Research Group includes professor Dominik Mahr and assistant professor Tim Hilken from Maastricht University, professor Debbie Keeling from the University of Sussex  Business School, and Ko de Ruyter, a professor of marketing at King's College Business School, who co-wrote the paper with Heller and Chylinski.