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Augmented reality set to change the way Australians shop in 2018

Retail revolution to continue as consumers and brands embrace new technology

The rise of augmented reality is set to change the way Australians shop as retailers increasingly blur the lines between online and offline. 

As demand for technology increases, and consumers readily embrace new products, Colliers International CBD Retail Leasing specialist Stephanie Harding expects to see a rise in the number of retailers implementing “experiential shopping” in their bricks and mortar stores. 

“As companies continue to experience unprecedented increases in revenue from the emergence of ecommerce over the last decade, an eagerness to invest in new and advancing technology can be seen in the retail sector,” Ms Harding said.   

“Augmented reality, as a form of new technology, is gaining popularity in the retail sector, bringing with it unrivalled opportunities to influence and engage the consumer market.

“In the latest Apple software update, iOS 11, ARKit – an augmented reality app now with vertical surface recognition – is now readily available to companies wishing to harness this technology into their own apps. With ARKit, augmented reality is now in the spotlight as it is more accessible than ever before.

Ms Harding said augmented reality could engage and influence consumers in a number ways, during both the pre-purchase and post purchase phases.

“Companies that use augmented reality allow consumers, and potential consumers, to imagine and experience the products features or potential before they make the decision to purchase. It is also being built into products as an additional element of engagement,” she said. 

“Companies and products that are embracing modern technologies, such as augmented reality, are engaging their potential target markets in ways their competitors are not. 

“During the pre-purchase phase where consumers are deciding on which product to buy, ease, convenience and engagement play a large part in the ultimate purchase decision. 

“Augmented reality products can be viewed on apps pre-purchase. For example, consumers take a photo of their room to be decorated then enter a homewares shop, scan an item, then place it electronically in their room via the app to see what it will look like. Similarly, this can be done with items like clothing, make up and accessories. 

“Companies who utilise this modern technology are giving themselves a competitive advantage by creating greater access to their products, and giving the consumer an added element of ‘experience’.”

ARKit apps have been installed more than three million times worldwide since iOS 11 launched on September 19, 2017, according to Sensor Tower Intelligence report. 

Colliers International’s Retail Leasing team recently negotiated a deal with the Lucas Films group at 421 Bourke Street in Melbourne which has seen augmented reality used in the sale of the company’s Star Wars artwork.

Ms Harding said retailers were reconsidering their footprint, weighing up whether to choose a single flagship or multiple, smaller stores. 

“Banks are also changing their footprint,” he said. “Traditionally banks have looked for flagship sites in prime locations and whilst they still look for high traffic locations, they are now reducing the size of their stores which is a more cost effective way of doing business.”  

“The increase in technology allows retailers to trade longer and in turn will increase profits.”

Ms Harding said consumers were looking for more out of their shopping experience. 

“Retailers are looking for more unique spaces to offer these great shopping experiences to continue to attract consumers to their stores,” she said. “We are seeing retailers identifying the need to become savvier and in touch with consumer needs. 

“A great example is the new Culture Kings store on Russell Street in Melbourne. Although 65% of their sales are online, Culture Kings have a flagship where their consumers can interact with the brand and the experiences offered instore. 

“Personalising the shopping experience creates more connection between the brand and its customer. Allowing the consumers to customise their experience will bode well for specialty retailers. 

“For retailers, this increased awareness of their customers’ needs and wants creates an unprecedented ability to improve the in-store experience, as well as assisting with everyday processes such as inventory management.”

Augmented reality was just the latest in technological advances changing the face of retail in Australia and around the world. 

“Smart mirrors are allowing consumers to ‘try’ on clothes and purchase directly from the change room without actually trying on clothes,” Ms Harding said. “QR codes are making a comeback, with more people shopping on their phone whilst in store. 

“In the year ahead, we will see a notable shift in the local retail sector as brands adapt to and embrace changes in technology that is giving us a new way to shop.”