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Can partnering with augmented reality apps boost in-store traffic?

In the wake of the wildly popular Pokémon Go application, retailers are brainstorming ways to integrate augmented reality features into their bricks-and-mortar stores to draw in millennial shoppers and add interactivity to shopping experiences – a feat that could be accomplished with the right partnerships.

The traditional model of bricks-and-mortar retail is failing to excite many consumers nowadays, prompting brands such as Sephora to revamp their in-store experiences with mobile-first activations. One way of capitalizing on the recent phenomenon of Pokémon Go is to place a bigger focus on augmented reality, perhaps by enabling in-store shoppers to use virtual headsets or goggles to test out new products.

“In order to compete in a crowded industry landscape, retailers need to rethink their bricks-and-mortar strategy to ensure that their business model is more agile,” said Hamaad Chippa, director of industry consulting at Informatica. “Beacons and apps are no longer impressive to in-store shoppers – they are now expected.

“Additionally, beacons and apps can tend to be cumbersome in nature and not easily accessible – lowering their appeal,” he said. “So, what’s next? Enter augmented reality.

“The AR phenomenon, like Pokémon Go which provides a twist on the classic game allowing players to get up off their couch and ‘catch ‘em all’ in an AR environment – gives retailers an opportunity to up-level the omnichannel shopping experience and exceed the customer experience expectations of the mobile-savvy consumer.”

The right partnerships
If retailers do not have the resources necessary to make their own augmented reality application or content, entering into a cross-partnership could be the next best solution. This can be actualized in the form of mobile games that invite consumers to venture in-store to catch an object or unlock a prize.

“Retailers can engage in partnerships with AR app companies to offer exclusive points and prizes for gamers who enter certain retail stores,” Mr. Chippa said. “They can also turn select stores into a trading/rest stop for gamers to fully integrate AR into the retail experience.

“In short, the key is leveraging other ecosystems rich with data – in this case AR on mobile phones – to drive in-store traffic and ultimately increase sales. When it comes down to it, data is at the foundation of every successful campaign.”

Even largely popular apps such as Pokémon Go are exploring brand partnerships.

Several marketers have discovered that one way of organically boosting brand awareness may lie in sponsoring locations within the augmented reality application, an strategy reportedly being explored by McDonald’s (see story).

“The recent Pokémon Go phenomenon presents retailers with the opportunity to leverage AR mobile apps and generate a renewed enthusiasm for the in-store shopping experience,” Mr. Chippa said. “A survey by mfour reported that 83 percent of the 1,000 Pokémon Go players sampled were between the ages of 18 and 34.

“Millennials are clearly engaging in AR experiences on mobile apps so retailers that tap into the AR ecosystem and implement in-store AR activations will definitely attract that demographic,” he said.

The new normal
The rapidly evolving mobile world has made consumers accustomed to constantly experiencing new digital innovations. It has also made them accustomed to wanting their favorite brands to be early adopters of the latest technologies.

Integrating AR experiences in-store is not an insurmountable task for major brands.

For example, outerwear retailer The North Face was one of the earliest adopters of augmented reality-enabled commerce. Last year, in-store employees in one of its South Korean stores asked customers if they were looking for apparel related to a specific season, such as winter sports gear, before providing them with an Oculus Rift headset (see story).

The virtual reality content shown through the headset took shoppers on an adventure taking place in a setting that corresponded to their desired products. Winter apparel seekers, for instance, were privy to a scene in a snowy locale.

Brands can also help shoppers try on new products and enjoy the visualization process through in-app augmented reality experiences.

Sephora recently brought live 3D facial recognition to the existing Virtual Artist feature on its application and Web site, a move expected to boost conversion rates through more accurate facial tracking and rendering (see story).

Ultimately, while AR technology may still feel foreign to some marketers, experimenting with it should be a top priority.

“According to IDC, more than 50 percent of organizations are testing AR software or are planning to do so – and some brands have already gotten a head-start,” Mr. Chippa said. “Many brands are tapping into Snapchat to promote the geo-location of their stores, and are leveraging the social media platform through selfie lenses for marketing campaigns targeted to millennials – but AR technologies are proving to be a primary touchpoint for millennial engagement.

“Sephora is enabling shoppers to virtually try on false lashes and lip colors – and watch tutorials using their own image taken on smartphones, tablets and computers,” he said. “Wayfair is using AR for shoppers to see how a piece of furniture would look in their home via their Android smartphone or tablet.

“The similarities between Sephora and Wayfair’s activation paths uncover a best practice for AR integration. In order to avoid getting in over their heads, brands must resist the temptation to dive into the waters of AR opportunity head first. The key is to start small and remain strategic by limiting initial AR implementation to the consumer devices of choice – i.e. smartphones and tablets.”