Covid-19 has supercharged all things virtual, propelling industries like retail well into the future. According to IBM’s 2020 U.S. Retail Index report, the pandemic has accelerated the shift to digital shopping by roughly five years.

Augmented Reality (AR) applications have been on the rise with virtual “try-before-you-buy” experiences ranging from previewing furniture and products in your home with everyday brands like IKEA and Home Depot, to virtually trying on luxury fashion such as Louis Vuitton and Gucci. On the beauty retailers such as Sephora and Ulta, they prohibit customers from physically testing makeup products on their skin. Retailers are instead turning to AR to help customers digitally test out thousands of beauty products to assist in buying decisions. Once a nice-to-have feature, AR has quickly become an essential technology for retailers.

According to a Neilsen global survey from 2019, consumers listed Augmented and Virtual Reality as the top technologies they’re seeking to assist them in their daily lives. In fact, just over half (51%) said they were willing to use this technology to assess products. In fact, e-commerce company Shopify recently released new data that interactions with products having AR content showed a 94% higher conversion rate than products without AR.

The next phase of augmented retail will likely be a gamified social experience.
Burberry recently partnered with Snapchat on an in-store AR game, and We can see the concept being extended to digital store fronts and virtual closets where you can play, explore, and shop with friends. Fashion and beauty companies applying this digital entertainment approach are benefitting by connecting with new, younger consumers.

Which leads us to another emerging area in augmented retail and digital shopping: virtual goods as commodities. We’re already seeing the sale of virtual merchandise from luxury retailers like Louis Vuitton offering digital skins (branded clothing and accessories to dress characters with) in the esports game League of Legends.

Virtual try-on experiences are an excellent use case for AR in retail: 
Allowing consumers to preview products to scale digitally in their own homes, on their own bodies, and then instantly purchasing the corresponding physical product. Virtual objects are a way for consumers to interact with, try-on, and even own a part of a brand that might not otherwise be accessible.

A rise in saleable virtual goods with a new type of augmented retail.
Impacted by the pandemic, it’s a trend that few are labelling “digital lipstick effect.” The “lipstick effect” is historically referred to the consumers who continue to spend on mini luxury items, even during recessions and economic downturns. Lipstick as a potentially accessible product becomes a metaphor in today’s times, analogous to digital lipstick, or any virtual good.

As We wrote in Augmented Human, the old rulebook of how we understand and interact within the real world no longer applies, and in many mays, the pandemic has been a catalyst for this digital transformation. Physical retail must evolve in response, and AR has proven that it can add enormous value for consumers in the shopping journey. Now is the time for business leaders and brands to not only re-imagine retail, but to catapult these immersive shopping experiences into the future.

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