The New Digital Window

The mobile phone industry is filled with buzzwords, many of them hurled confusingly at retailers in the hopes of convincing them that this widget or that whatchamacallit will revolutionize their business. “Checking in.” Local “deal of the day.” Mobile payments. SMS short codes. Over and over, we’ve been told about the “mobile revolution,” each time with a little more hyperbole and a little less actual proof.

But one mobile technology that does have the power to redefine, or at least dramatically enhance, the shopping experience of tomorrow is augmented reality (a.k.a. “AR”). Augmented reality simply means using the phone as a “window” to the environment around it and displaying digital information superimposed on that real-world view.

There are two primary types of augmented reality, each one offering retailers some fascinating opportunities:

1. Geolocation-based AR: Here, the phone uses two embedded technologies to know what’s showing up on the viewscreen through the camera. First, GPS lets the phone know its location (realistically within about 32 feet using current technology). Second, the accellerometer in the phone identifies which direction the phone is pointing. By combining these two pieces of information, the phone can display digital content that’s coded to a specific place overlaid on an image. For example, pointing the phone at the Eiffel Tower in Paris could show the Tower itself, but also (as one recent promotion did) a 3-D cow balloon promoting a French cheese. Or, since the phone knows where it is in relation to other locations, a shopper could see turn-by-turn directions to a nearby store overlaid on a view of the streets.

2. Symbol-based AR: With this technology, the phone uses the camera to recognize a specific shape and use this as a reference point over which digital content is displayed. Since this offers a higher degree of precision than geolocation-based AR, it allows for a more intricate or compelling experience. One great real-world example allows consumers interested in a Panasonic flatscreen to see how different models would look in their own homes. It’s very simple to use: first you print out the specific symbol (called a “glyph”) on letter-sized paper. Then you place it on the surface where the base of the TV would go. Viewing the space using a downloaded app on your phone, you can then select a model and see exactly how it would look in the room from different angles.

Both of these types of AR are well established, with several platforms and service capabilities that retailers can use to develop and deploy augmented reality into their own mobile strategies. This real-world technology is well supported across all the major smartphone platforms and can be integrated into retailer branded applications, as well. Consumers react incredibly favorably to the “wow” factor of AR and, with established tools so easily at hand, the cost of creating AR applications is relatively low.

So why haven’t retailers been at the forefront of developing this exciting new capability?

There are a few retailers experimenting with augmented reality. Tommy Hilfiger’s “GoldRun” application lets shoppers track down digital objects in a virtual treasure hunt. Both the Android and iPhone platforms feature several “virtual dressing room” applications for assisting fashion shoppers with clothes buying. But on the whole, retail has been slow to embrace the potential for augmented reality for three reasons:

1. Lack of vision. Let’s face it, retail isn’t exactly known for rapidly embracing technology, and AR is at the leading edge of mobile these days. As a tool to create a shopping experience, it needs to be integrated with store design and multichannel retailing and used to express the nuance of the retail brand, not just as a “gee whiz, I’m using my phone!” experience.

2. Lack of organization. AR falls into one of the unfortunate gaps in the typical retail enterprise: It’s neither fish nor fowl. So none of the established departments in a retail enterprise can really embrace it. And since it bridges the gap between the real world and the electronic, it must similarly be adopted by IT, marketing/online and store design.

3. Lack of a business model. If it’s just a marketing stunt, AR can fall under the same promotion budget that pays for mascots and balloons in the parking lot. But to create a robust application – that truly leverages the technology, ties into other retail experience elements (like customer service, loyalty, promotions, etc.) and actually enhances the shopping experience and retailer margins – requires a deeper business model than most retailers have developed to date.

We’ll address the organizational and business model impacts of mobile retailing in subsequent columns, but for the time, let’s begin envisioning how augmented reality can reshape store design and retailing with a simple but powerful example:

Up until now, one of the basic principles of store design is that the look of the store is the same for everyone: A fixture can’t appear to be black and white to one shopper and rich wood and marble to another. Everyone who looks at a p-o-p display sees the same branding, the same promotions, the same offers and pricing.

Now imagine that every shopper in your store has a personal view of the environment. When she holds up her phone, signage and displays can literally change. One shopper sees product information in Spanish, one shopper gets a special offer based on her loyalty program status, another is guided shelf by shelf through the store based on what’s on his shopping list. Fixtures are no longer static, but instead come to life with full-motion animation, all based on the unique personality and profile of each individual shopper. The physical world of materials and fixtures now blends seamlessly into the electronic world of information and personalization.

This is the power of augmented reality, but as a concept, not a specific technology or platform. By envisioning how the store looks through this new digital window, store designers can begin to create the personalized, informed experiences that shoppers crave.

Jim Crawford (about.me/jimcrawford) is executive director of the Global Retail Executive Council (grec), an international association, and a principal at Taberna Retail, a global retail shopping experience consulting company.