Augmented Reality in Retail: Stats, Benefits & Examples

Augmented reality in retail is the new sensation. Read on for an overview of AR in retail business, futuristic applications, real-life use cases, and more.

We are all familiar with walking into a physical store, spending hours assessing various products, reading through product descriptions, and then buying. However, given the growing trend of augmented reality in retail, it will soon become obsolete.

Retailers have taken an unprecedented initiative and introduced AR to create a more interactive, engaging, and unique experience. It’s safe to say that AR experiences resolve the problems posed by traditional retail marketing, including limited personalization, insufficient items, spending hours to buy a few items, etc.

This article highlights why augmented reality in retail markets is the future. You will also learn about the top companies providing AR services, its benefits for customers, and more.

What is Augmented Reality in Retail?

Augmented reality is superimposing virtual elements in the real environment in real time. In other words, it is an immersive digital experience that enriches real-world experiences by overlaying digitally generated content over physical objects.

AR in retail merges the physical and virtual worlds to create a seamless shopping experience. Consumers can effectively search for desired products, see product descriptions, try them on, assess their qualities, and make informed decisions.

AR in Retail: Statistics and Facts

The popularity of immersive technologies has increased multifold in the last few years. Statistics prove that people are becoming aware of the comfort, convenience, and flexibility it brings.

• Experts believe the global AR market share will reach $88.4 billion by 2026, at a CAGR of 31.5% between 2023 and 2026. The growth will occur due to the high use of AR in consumer, commercial, and enterprise applications. (Markets and Markets)
• New research shows that global augmented reality in retail markets will reach $62.3 billion in valuation by 2033. The CAGR rate will be 41.7% during the forecast period 2024-2033. (Custom Market Insights)
• The consumer AR software market size was $13 billion, and the AR hardware market share was $6.3 billion in 2024. (Statista)
• The customer spending on mobile AR digital goods via in-app purchases will reach $1.26 billion by 2028. (Statista)
• The global consumer listed AR/VR as the top technology for assisting and amplifying their lifestyle. About half of consumers (51%) are willing to use AR to assess products before purchasing. (NIQ)
• Growing trends for smartphones, AR glasses, and tablets are popularizing AR in the retail market. Famous companies implementing AR technologies include Alphabet Inc., Apple Inc., Elbit Systems Ltd., HP Inc., HTC Corp., Kopin Corp., Lenovo Group Ltd., Lumus Ltd., etc. (Technavio)
• There are three types of AR devices: head-mounted devices, smart AR mirrors, and hardware devices. These tools in retail are primarily useful for gaming, entertainment, in-store navigation, virtual tours, product visualization, etc. (Skyquest)

Augmented reality has reached diverse retail segments, such as jewelry, beauty, cosmetics, footwear, apparel, furniture, lighting, etc. Now, let’s discuss the benefits of AR in the retail sector.

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Benefits of Augmented Reality in Retail Markets

Immersive technologies like AR have opened up new opportunities to address global audiences innovatively. We will now discuss the benefits of implementing augmented reality in your retail business.

Increased Customer Engagement

Retailers have shifted their focus to providing more virtual product experiences to their customers and expanding global reach. AR makes customer engagement with the product more interactive.

For example, Fenty Beauty uses AI and AR to help customers try products virtually and find the right shade for their skin tone, addressing global customers’ needs without opening physical stores at every location.

Better Customer Experience

Augmented reality closes the gap between the limitations of offline shopping and customers’ needs. Customers can get an in-store experience while still living in their place.

AR in retail allows customers to go over product details, recommendations, prices, discounts, customer reviews, virtual try-ons, etc. It enables customers to deeply understand the product’s features and benefits and make the right decision.

Reduced Rate of Returns (RoR)

Statistics suggest that at least 30% of all products ordered online are returned, compared to 8.89% in brick-and-mortar stores. With the introduction of augmented reality in retail, businesses have resolved this issue significantly. Now, consumers can find the exact product with authentic details, try it on virtually, and make the right purchasing decision, effectively reducing the product return rate.

Minimizing Hygiene Issues

Considering the evolving retail shopping experience and customers’ direct engagement, a hygienic environment is an innate requirement. AR technology minimizes consumer visits to physical stores and gives a real-life-like digital experience. It helps customers shop for the right product without ever stepping foot in the physical store, and retailers maintain hygiene with less staff.

Elevated Brand Awareness

Marketing with AR in retail can create a lasting impact in consumers’ minds more than traditional advertising. It enables consumers to interact and make it more memorable. They will most likely publicize the brand on social platforms, attracting more user traction and brand awareness.

Eliminating Language Barrier

The language barrier was one of the most common issues store owners struggled with while engaging with a global audience. However, it’s not the same case anymore. Apple, Google, Microsoft, and other companies have launched an augmented reality-based language translator app that can easily translate images, videos, or text within a few seconds.

High ROI

Immersive technologies like AR in retail have streamlined the shopping process, made the buyer’s journey more flexible, and efficiently improved customer engagement. This customer-centric approach has led brands to address more diverse audiences and improve ROI.

After learning the enormous benefits of augmented reality in retail, it’s time to learn about the brands that have taken the initiative.

Top 5 Augmented Reality Startups

The business world is full of augmented reality examples. Many top-notch AR development companies have allocated millions of dollars to take AR applications to a new level.

1.   Apple: Build New AR Experiences

Apple has strategically introduced a new virtual in-store experience. The AR Quick Look allows Apple users to visualize virtual objects in 3D on iPhone, iPad, and Apple Vision Pro.

ARKit 6 SDK by Apple allows developers to build innovative AR applications. The SDK also introduces 4K videos to capture high-resolution videos for editing, film production, social media apps, etc.

2.   Vuzix: Smart AR Glasses

Do you know immersive technologies can display a fine blend of performance and comfort? You can stay grounded in the real world while engaging in the virtual world.

By prioritizing customers’ needs and versatility, Vuzix smart glasses offer a see-through display with a large field view, diverse mounting options, and integration with top conferencing platforms, such as Zoom, WebEx, etc.

3.   Burberry: Step Up Your Shopping Game

Burberry launched a new AR-powered shopping tool through Google search technology. It allows customers to experience products virtually and enjoy an enhanced customer shopping experience. Recently, the company launched AR purchases in Tokyo and London.

4.   Coca-Cola: Interactive AR Campaign

In 2023, the company launched its first AR-powered campaign, #TakeATaste for Coca-Cola Zero Sugar, in partnership with Tesco Group, DOOH, and others. Recently, Niantic’s cutting-edge technology created the Dreamworld Mural that transforms real locations into dynamic AR murals, creatively increasing brand engagement.

5.   Dior: AR Beauty Try-on Campaign

What would be the better way to engage with customers than to let them try on products virtually?

The AR Beauty Try-on campaign allows buyers to try products virtually without visiting the store. After enormous success, the company again launched the same Try-on campaign in Saudi Arabia, the UAE, Kuwait, and Qatar over Eid in 2024, maximizing views and conversion.

Let’s look at some of the diverse and popular applications and use cases of augmented reality in retail.

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Augmented Reality Applications and Use Cases

Immersive technologies like AR display numerous ways to harness their full potential. It also varies according to your business model, ongoing trends, customer demands, future scope, budget, etc.

A few AR use cases have become sensations in retail that you can adopt too, such as:

Product Viewers via AR

AR product viewing allows customers to inspect online products effectively and eliminates the imagination gap. It boosts the customer’s confidence in the product and delivers a new meaning to the online shopping experience.

Virtual Try-on

The mobile and web app try-on feature is becoming largely popular among brands belonging to beauty, cosmetics, and fashion. It allows people to see how the product looks on them without actually trying them on.

Interactive in-store Navigation

When people visit physical stores, they mostly struggle with finding their desired items. AR technology resolves this issue for retail businesses.

For example, Lowe’s Vision, launched in 2017, allowed shoppers to use AR navigation to navigate the store. So, they can get products quicker using the most efficient route.

Virtual Space Decor

Finding appropriate interior items, like sofas, decorative pieces, etc., is challenging. How will customers know which item will be suitable for their home? Which furniture type will look aesthetic? How large should the furniture be for the room?

Virtual space visualization is the solution you are looking for.

For example, Ikea’s AR app lets you scan the room and choose the right product for your space.

Virtual Fitting Rooms

AR-generated 3D models for virtual fittings are becoming popular these days. They transform the physical shopping experience of the old days and help customers buy the most suitable outfits according to their style and body type.

Diverse use cases of augmented reality in the retail sector open up new opportunities and a fair share of challenges. Here is a list of a few challenges most retail companies struggle with.

What are the Challenges of AR in Retail?

Adopting new technology can be difficult when people are comfortable using traditional methods. Some of these hurdles are more common than you imagine, including:

Technical Challenges

Existing mobile devices require immense processing power and high performance for immersive technologies. The current system fails to provide high computational power, resulting in failure, power drain, lag, and overheating. In addition, current AR/VR hardware can be expensive, making it impossible for the general public to afford.

Software Limitations

Developing AR software that can work on multiple devices with different structures is the toughest challenge for developers. Another limitation is maintaining high-quality graphics, animation, and 3-D models with accurate light, shadow, and texture. These setbacks prevent retail owners from fully adopting AR for their retail business.

Consumer Transparency Issues

AR technology heavily influences consumers’ decisions to invest in high-end products. Retailers must inform consumers about the use of AR images while advertising their products. They can face serious legal repercussions due to the negligence of an authentic and transparent context during advertising.

Data Privacy and Security

Retailers using AR software that collects user data must address legal considerations regarding data storage and usage. Federal laws like HIPAA and privacy laws apply in the USA when using augmented reality.

Deceptive Marketing

In retail, AR can manipulate reality and present a distorted version. It creates a false image in consumers’ minds and leads to false advertising. In short, manipulation of product visuals can violate consumer protection laws.

Therefore, retailers striving to adopt this new technology must prioritize transparent and clear communication. It will help them build customer trust and avoid unwanted legal battles.

It’s 2025, and many renowned retail businesses are working tirelessly to provide unique experiences to consumers. We will now look at how these innovations are creating a futuristic environment.

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Future of Augmented Reality in Retail

Look at a few real-world examples:

• H&M invites customers to Metaverse to try on dresses virtually. In addition, recently, H&M Philippines hosted H&M Celestial Spaces—a virtual concert with P-pop dressed in the brand’s outfits.
• The Nike Fit app allows customers to find the right shoe size before buying. The brand allows customers to use their smartphones to scan their feet; the app takes the measurements and recommends the right shoe size.
• Cloudinary is a popular cloud-based image and video management solution provider. It has launched a new 3D version. It lets brands create and manage three-dimensional visuals, augmented reality-focused content, and photorealistic images.
• Rokid AR Smart Glasses are one of the most popular AR applications nowadays. They work as a spatial computing platform. They feel like everyday sunglasses and give a decent viewing experience.
• In 2023, McDonald’s launched its Grimace Shake, inspired by one of the fast food chains’ mascots. To materialize the mascot’s distinctive appearance, they also introduced a Snapchat filter that allows users to try on AR glasses, which went viral on TikTok.
• Everybody is familiar with Rihanna’s beauty brand, Fenty Beauty. The brand partnered with the Riot Games’ Arcane Series to give a virtual glamorous experience. They created beauty products based on the Arcane animated series, capturing the attention of both gaming and beauty audiences.

Besides this, many brands use this immersive technology in various fields, including marketing, AR posters, and more. The ultimate goal is to utilize new technologies to enhance lifestyles.

Final Words

Is augmented reality a breakthrough technology, or is it simply overhyped? Considering the people’s enthusiasm, most people are embracing the changes, specifically Millennials and Gen Z.

In the retail industry, AR creates new opportunities. It encourages customers to connect with brands and offers a wonderful experience. As a result, it drives sales and allows brands to grow globally.

Numerous mobile app development agencies offer innovative solutions. So, conduct thorough research and hire a reliable AR/VR development company for your next project. This list contains AR development companies. You can hire top app developers that suit your budget, business model, and project goals.

Ready to build your AR app? Choose a partner and discuss your project now.

Frequently Asked Questions

What is the most common use of augmented reality in retail?

The most common use case of AR in retail is 3D product visualization. Retailers transform their product visuals from 2D to 3D. Customers experience products that look and feel real, view different product variants, and make informed decisions.

How is augmented reality transforming businesses?

Augmented reality in retail offers a digital experience to customers and enhances their overall shopping experience. Customers can virtually wear and shop dresses from anywhere, ensuring a personalized experience.

What is a point of sale in augmented reality?

The “point of sale” is when buyers finally decide to buy the product. They usually do it after virtually assessing, trying it on, and seeing it in detail.