Life on the Digital Edge: How Augmented Reality Can Enhance Customer Experience and Drive Growth
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Life on the digital edge: How augmented reality can enhance customer experience and drive growth Copyright © 2014 Accenture. All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Every business is a digital business. That’s because every customer is now a digital customer. Nowhere is this more evident than in the retail arena, where shoppers have used social networking and mobility to transform their purchasing experiences. In response to the rise of the digital customer, retailers are looking to leverage digital technologies to drive new levels of customer engagement and competitive advantage. One area that holds particular promise is augmented reality. 2 The (digital) natives are restless With today’s proliferation of social It’s not easy to meet the needs of networking and mobile applications, this new breed of customer. In an customers have non-stop access to “always-on” world, customers have more knowledge and more opinions the power to continually redefine than ever before. This information the retail shopping experience they is shaping their preferences for want to have. Their expectations are products and services, as well as rising—and constantly evolving. their expectations for personalized They want to be enticed and retail experiences. It is also upending engaged. They want digital content the linear buying process. That and digital options that are easily traditional path to purchase—which accessible 24/7. And they want a begins with awareness and ends seamless experience, across multiple with purchase and loyalty—has lost channels that enable them to search, its relevance for today’s customers. compare and purchase products and It is too slow, too static and too services on their terms. generic for buyers who now perpetually find themselves in a non-stop, non-linear sales channel. Digital natives are a new generation of customers, who have grown up using digital technology, e.g. mobile, from an early age. 3 Building on the digital momentum In response, many retailers are building Accenture believes one of the main A recent survey carried out by Thrive their digital selling capabilities, goals of any retailer’s digital Analytics and released by the Local including the introduction of digital investment should be to increase Search Association revealed that 81 tools, online features and social media customers’ desire for products and percent of 44- to 53-year-olds and to drive sales across multiple channels. services. And we believe there’s no 69 percent of customers older than Their actions are understandable. better way to accomplish that than 54 use their smartphones while Some are pursuing digital sales by using the technologies that shopping in stores.3 techniques because they see the customers currently own. The value that their industry peers or momentum already exists. Retail Given the proliferation of smartphone companies in other industries have customers now regularly turn to usage while shopping, the questions generated through digital action. their own devices to support their for retailers become: “How can we Others are taking more of a leadership in-store decision making. In fact, use customers’ mobile computing role. While they acknowledge the surveys showed that two-thirds of devices to engage with those risks they might be taking, these primary household shoppers with a customers in more meaningful ways?” digital leaders see an enormous smartphone have used it while and “How can we delight today’s potential in being first-to-market shopping. And nearly half (45 percent) digital customers with a differentiated with innovative digital solutions, use them frequently.1 Customers in customer experience that is noticed striving to introduce a service that the 18-29 age range are most likely and valued?” Augmented reality is attracts “buzz” and builds loyalty. to use smartphones during their one possible answer. in-store shopping trips. Importantly, Today, leaders and fast followers however, the use of smartphones alike are more inclined to see digital while shopping is not limited to solutions—along with location, younger generations.2 product pricing and assortment, and customer service—as key drivers of growth in an environment of non-linear sales. While the true effect of digital selling on profitability is not yet clear, what is clear is that digital technologies can be used to do more than facilitate the purchasing process. The true power of digital technologies lies in their ability to capture customers’ attention and enable satisfying customer experiences. By offering those experiences, retailers are more likely to build the profitable relationships digital customers crave. 4 5 Augmented reality in retail Broadly defined, augmented reality Many retailers have taken notice of • Sampling and visualizing refers to the overlaying of physical customers’ existing pain points, and products. Several fashion retailers, environments with digital content some have taken action using including Topshop, De Beers and and images to provide users an augmented reality to help create Converse are using augmented enhanced (or augmented) experience more satisfying customer experiences. reality to enable their customers of reality. From the heads-up displays to “try on” clothes, jewelry or shoes originally developed for military They are doing so in several ways: virtually. Shiseido and Burberry fighter jets (and now used widely in • Finding retail items and accessing Beauty Box stores offer similar the automotive and gaming industries) product information. Technologies augmented reality solutions for to the immersive experiences enabled are now available that make it shoppers looking for cosmetics.6 by Google Glass, augmented reality possible for grocery shoppers to These types of solutions, often applications are popping up all scan the aisles with their smartphone referred to as a “magic mirror,” over—even in retail. cameras (and potentially their help customers decide which smart glasses) to quickly identify clothes or accessories to buy Thanks to the broad adoption of products that are on sale or that without having to try them on. smartphones and mobile internet address certain requirements Augmented reality can also show devices, retailers now have an (e.g., gluten-free), tastes or other products and product variants exciting opportunity to bring product preferences (e.g., locally produced, that aren’t available in a physical labels, shop windows or catalog fair-trade certified or organic).4 store. For example, American images to life in ways never before Google’s Project Tango goes a step Apparel has launched a color- imaginable. It’s an innovative farther, offering customized 3D changing app that allows shoppers approach to reach customers— in-store maps to help mobile- to see clothing items in different especially the digital customers equipped shoppers easily find the colors.7 Volvo has launched a for whom traditional marketing specific products they are seeking. similar solution. The carmaker’s strategies no longer work. Evidence Walgreens is one of the retailers augmented reality X-ray app suggests that customers are clearly piloting the Google solution, which enables customers to view cars ready for the new approach. Accenture also offers product information through their iPad to see how they research from 2014 shows that even and promotions that seem to “pop look in different finishes, learn though 59 percent never have had out” of the shelves as customers about different features, and even the chance to try augmented reality, navigate to their desired product.5 go for a test ride. The solution also only 30 percent are unsure of how Other augmented reality solutions offers a “shoppable window” with it works. On top of that, only 23 enable shoppers to receive additional special glass that allows customers percent do not find it useful. personalized information, to browse goods for sale while the recommendations, recipes and store is closed.8 Customers are experiencing a reviews when they scan specific number of key shopping challenges, products with their mobile devices. which they preferably would like to solve from home. Augmented reality is an emerging technology that superimposes computer-generated images and content onto real-world environments, thereby enhancing a user’s perception of reality by combining physical and virtual elements. 6 Accenture’s 2014 Augmented Reality Survey was performed in September 2014 with 400 US respondents. 7 Importantly, customers can use this • Browsing and buying. Yihaodian, • Post-purchase support. variant of augmented reality to a leading Chinese e-commerce Augmented reality can also be sample products without visiting a grocer, launched 1,000 virtual used for truly functional purposes, physical store. Digital creative studio stores overnight to compete such as helping users understand Holition works with a number of against its brick-and-mortar rivals. how to use a product. For example, high-end retailers to make it Located in “blank city spaces” Audi has created a virtual manual possible for shoppers to “try on” across China (and sometimes right that provides the owner instant luxury accessories such as jewelry in the parking lots of their main information about everything and watches while sitting in front competitors), these augmented from the location of the coolant of their computer screens.9 And reality experiences allow customers reservoir to what that button on Swedish home furnishings company to walk around in the virtual stores the dash really does.12 Similar IKEA has, together with Accenture and order 1,000 different products, solutions from other retailers and other allies, developed an which are later delivered directly showcase how customers can innovative way for its customers to to their homes.11 assemble their products or install view products in their own homes their dsl/broadband, stereo or TV (see sidebar). This means customers equipment at home. are able to determine whether the IKEA product matches their requirements in terms of style, color and size—all from the comfort of Augmented reality is still in its infancy their homes.