Shopper Experience
24 June 2022
Augmented reality shopping can inspire confidence, creativity
Check out survey results from Snap and new features from Walmart and IKEA.

(Illustration by The Current)
Check out survey results from Snap and new features from Walmart and IKEA.
(Illustration by The Current)
Welcome to Near Future. In this weekly feature, The Current spotlights innovations powering the next wave of commerce.
For brands and retailers, adding new technology features to a shopping experience has long been a way to generate interest and excitement. Tech makes new capabilities possible, allowing all to envision a future that appears to have already arrived.
Yet it’s also important to ground the rollout of an innovative new tool in its utility for a business. How does it provide shoppers with value, and in turn help to solve problems inside the business? With more technology available, it's increasingly important that these questions are analyzed and answered.
So it was with interest that we read the results of a recent survey on augmented reality from Snap Inc. and Publicis Media. AR, which involves overlaying a digital image onto the display of a real-world setting through a mobile camera, is becoming more widely used in ecommerce. Many brands and retailers are rolling out AR shopping features like virtual try-ons and 360 product demos, or considering doing so. So research on how shoppers use and assess the technology can be key to understanding whether a virtual try-on is the right fit.
The data was gathered by market research consultancy Alter Agents across four markets, with a quantitative survey of 4,028 shoppers aged 13 to 49 who have used AR for shopping, and 37 mobile ethnographic interviews and daily diaries from consumers in these four markets.
Here are a few of the findings:
The research comes as momentum for augmented reality is building, driven in part by Snap. After exploring brand partnerships that helped to prove out the utility, the camera-based social platform is bolstering its capabilities in this area with a home for AR try-on for users, as well as tools for brands to more easily add products for shoppers to browse in this mode. The research found that 37% of shoppers who discover AR experiences do so on Snapchat, second only to store websites.
Ecommerce platforms are also moving to add augmented reality features. In June, Amazon made a fresh addition to its AR shopping tools with a Virtual Try-On for Shoes features. It immediately offered access to well-known brands such as New Balance, adidas, Reebok and Puma.
This week, Walmart announced a pair of new augmented reality features for its shopping app, stating that it believes “the closest store to our customers is in their pocket.”
One feature, rolling out in July for iOS with Android and web to follow, allows customers to view a visualization of what furniture and home décor items will look like in their own spaces. The Walmart app will now include a ‘View in your space” banner. Once in this area, shoppers will be able to hold up their phone to view a likeness of up to 300 items, toggle item dimensions for fit and then snap a picture for later. It also includes haptic feedback, which allows customers to feel vibrations as they move 3D models, and prevents them from moving beyond the walls of a single room.
(Photo via Walmart)
AR won’t only be an ecommerce function at Walmart. The company said it is developing a new in-store augmented reality feature to view product information. Shoppers and associates will be able to point a phone camera at store shelves with the Walmart app, and it will in turn filter the product assortment based on personal preference. This can be used to denote whether an item has a particular specification, such as gluten free. It could also help to provide info on whether a coupon is available for a product.
Walmart’s extension of the technology to the in-store experience underscores how the 3D technology will continue to develop. New use cases will emerge.
That’s also on view in a new release from IKEA this week. The Swedish furniture company launched a new mixed reality experience that combines AI, computer vision and design tools with the visualization that is familiar in AR. The technology was developed by AI specialists in Silicon Valley, and Geomagical Labs, which IKEA acquired in 2020.
IKEA Kreativ. (Courtesy photo)
IKEA Kreativ offers tools that allow shoppers to create a 3D replica of their own space by taking a series of photographs, which are automatically processed into one 360 image. In turn, this image can be edited by erasing their own furniture from the image, and replacing it with images of IKEA products. So, effectively, it allows users to design their own space. Then they can save for later or share with friends. Users can also add the products to their cart, creating a path from visualizing to buying.
It’s a reminder that augmented reality is a step to help visualize and inspire. The most widespread sign of adoption may be when it becomes such a blended part of the ecommerce experience that users don’t even think about the words augmented reality when they are using these features.
The retailer's marketplace is expanding quickly.
When it comes to ecommerce growth, was the pandemic a blip or a new trendsetter?
As we move further from the height of COVID-related closures, it’s a question that will start to be answered through the lens of history.
So far, the narrative of ecommerce growth in the U.S. from 2019-2022 has gone like this: Ecommerce’s share of overall retail saw a huge spike at the height of the pandemic in 2020-21, when goods in general were in demand and online shopping was necessary to preserve health and safety. Experts looked out and saw a permanent exponential change in the penetration of ecommerce as a share of retail that would last beyond the pandemic. Then, in 2022, everyone went back to stores and the trendline came back to 2019 levels. Growth was no longer exponential. There was still growth, but it was not happening as fast as during the pandemic period.
With this in mind, it’s worth pointing out that 2023 is the first year that there likely won’t be a pandemic-influenced swing to influence ecommerce growth. It is also a year where demand has suffered challenges amid inflation and interest rate hikes.
So as we seek to determine the importance of ecommerce to overall retail, it’s worth it to continue taking a close look at what growth trends retailers are seeing now, whether ecommerce is remaining resilient amid consumer pullback and how retailers are preparing for the future.
The latest example arrived this week from Macy’s. It’s a fitting one for the times. Overall, Macy’s is seeing a slowdown as consumers pull back on discretionary purchases, with sales declining 7% in the first quarter versus the same quarter of 2022. Digital sales were down 8%.
Macy’s is particularly susceptible to the macroeconomic headwinds that many brands and retailers are facing, as spending among the middle-income consumers it counts as a primary customer base is particularly softening, said GlobalData Managing Director Neil Saunders.
But while ecommerce is slowing overall, the importance it gained to Macy’s business during the pandemic is remaining in place.
In 2019, ecommerce made up 25% of Macy’s revenue, CEO Jeff Gennette told analysts on the company’s earnings call. That jumped to a high of 44% in 2020. By 2022, digital reached 33% of sales after the pandemic boom. In the first quarter of 2023, it remained at 33%. So, while the trend line dipped after shoppers returned to stores, ecommerce share still settled in at a higher post-lockdown point than it was before the pandemic.
This came in a quarter in which traffic was “relatively good” across both online and in-store, Macy’s CEO Jeff Gennette said. It was “flattish” online, and slightly up in stores.
“We do expect that this is the reset year with the penetration between them,” Gennette said. “But we do expect more aggressive growth in digital in the future versus stores as we think about '24 and beyond. And that's going to be foisted by a lot of ideas and strategies.
Over the last year, the retailer has made investments in boosting ecommerce, even as shoppers returned to stores. In a bid to boost the assortment of goods available online, Macy’s launched a marketplace in September 2022 that welcomes goods from third-party sellers.
The marketplace had an “outstanding” first quarter, said Macy’s President Tony Spring, who is poised to succeed Gennette as CEO next year. Gross merchandise value increased over 50% when compared to the fourth quarter of 2022, while the average order value and units per order for marketplace customers was 50% above those not shopping at the marketplace.
Macy’s is continuing to build the marketplace even as it racks up sales. The retailer added 450 brands, ending the quarter with 950 brands.
This is helping to draw in new customers, as well as younger existing customers who are buying more items, resulting in increased basket size.
“We're very excited as to how marketplace is really attracting the Gen Z customer, particularly in categories where it was not economically feasible for us to carry in the past,” Gennette said.
In the end, Gennette said a strong digital and social presence is key to attracting younger consumers. That's a different type of shopper than other age groups.
“We know the younger customer starts first online,” Gennette said. That behavior will still be in place as the generation gets older, and gains more buying power in the process.
Going forward, Macy’s is seeking to expand the model to other retail banners in its portfolio. Bloomingdale’s will open a marketplace in the early fall.
The Macy’s ecommerce trajectory isn’t that different from the wider U.S. ecommerce narrative detailed above. With one quarter of 2023 data, there is evidence that ecommerce share settled out at a higher point after the pandemic than where it started before COVID arrived. There is flattening now, but the retailer is taking it not as a sign of a slowdown, or a signal to change course. Rather, it sees changing consumer behavior as a reason to build for the future.