AR to the Retail Rescue

The theory goes that Augmented Reality (AR) can help bridge the difference between the online and offline shopping experiences and drive some of the business back into the traditional retail outlet.

Customers have become increasingly disengaged from physical shopping. Online retailing has developed so rapidly and is now such a compelling offer that, in a time poor world, many people find it easier to stay at home to shop.

AR is one of the hottest topics right now in retail. Google and Apple have introduced platforms for AR development and startups in this sector have raised an estimated USD 650 million. According to research from Retail Perceptions, 61 percent of shoppers prefer to shop at stores which offer AR.

A lot of the AR development in retail has been in the online space. Take for example the IKEA Place app which enables shoppers to “virtually” put furnishings in their home spaces so they can better imagine them there.

While this is an innovative use of AR, it doesn’t necessarily drive people back into the physical store. It just helps them make up their minds before they go there, so they can shop more decisively and minimize the time they have to plod through the rows of stock.

An exciting application of AR comes from a co-working space in the inner Sydney suburb of Surry Hills.

There, a startup called AR Tech has launched a product called Sweep which chief executive Robyn Foyster claims is the “world’s first Augmented Reality” shopping app.

Sweep aims to revolutionize how people shop by using AR to drive traffic from smartphones and back into physical stores.

The app matches merchants offering deals with bargain-hungry consumers using geolocation technology and provides an AR view to guide shoppers to stores in a defined local area, effectively creating a local AR mall on a smartphone.

“If you are sitting in a café and want to see where you can go shopping you will open the app and be able to see all the deals that are local to you,” said Foyster.

“You can set and change the radius to capture the deals you want, and you can customize your feed based on what you are interested in.”

Sweep is also social in that it enables customers to post comments on deals, and even "gamifies" the experience by rewarding them with loyalty points.

The idea is that Sweep will be a new channel to reach customers and a way of attaining customer analytics and data that are currently available only online.

The revenue model is similar to Facebook’s in that retailers will ultimately pay to have their offers pushed to the top of the algorithm.

What is also interesting about Sweep is the rollout strategy.

Foyster’s philosophy is “start local, then go global” and Surry Hills has been selected as a “proof of concept” area because it is an affluent inner city suburb with a large number of specialty shops and a sizeable population of tech-savvy millennials.

These millennials are the Sweep target market because according to Foyster they are more likely than other shoppers to respond to impulse buying suggestions, and they are also more at home using their smartphones as an integral part of their lives.

“Surry Hills is a perfect place for us to launch; it is brimming with people at the cutting edge of technology use,” says Foyster.

Although it is only currently a small startup, Sweep has big ambitions. Foyster has been talking with retail giant Amazon about integrating Sweep, including with its Alexa personal assistant.

Upgrading of the Google mapping technology is also essential as it will help deliver better and more authentic AR as shoppers are guided to the stores.

Foyster believes that businesses need to be “niche or really large” and over time Sweep can be both: connecting people in their local community but transitioning from local to global.

It is a small company with big ambitions, and the proof will come soon enough.

If Sweep breaks out of its Surry Hills enclave and into your neighborhood, then you will know it will be on the way to success.