An overview of the retail revolution with AR/VR and AI

Driven by technological advancements and shifting customer tastes, the retail sector has experienced dramatic transformations in the last several years. From small retailers to multinational conglomerates, they are now, more than ever, leveraging technology to meet these evolving expectations. 

According to multiple reports available on the web, 86% of buyers are willing to pay more for a great customer experience. Similarly, over 45% of companies believe customer experience will be their top priority for the next five years. The incorporation of new and emerging technologies, such as AI, big data, and AR/VR, changes retail models and operations offer customers a memorable experience.  

AI in retail 

The retail industry has seen a rise in the prevalence of AI technology, which has enabled retailers to develop new and innovative strategies for personalized shopping experiences, virtual try-ons and augmented reality, supply chain optimization, inventory management, and image recognition, thus optimizing operations, driving sales, and staying competitive in the market.

Retail stores are using AI to improve the shopping experience for customers by guiding them through the aisles, finding specific products, and making personalised recommendations. Others are using AI to improve supply chain efficiency, detect fraud, and manage inventories.

Both augmented reality (AR) and virtual reality (VR) are available.

Augmented reality (AR) is making a significant impact on the retail industry, transforming the way customers shop and interact both in-store and online. According to Deloitte Report named Digital Reality changes everything - 2019, 71% of shoppers say that they would likely shop more frequently when using AR-powered apps. 

Additionally, 40% of consumers say they would pay more if they were able to. Retailers are currently using augmented reality technology to improve the digital shopping experience, primarily by creating virtual stores and virtual try-ons.

AR in the UK

72% of UK luxury fashion shoppers want AR in their digital experiences, according to a 2023 survey by Vogue Business and Snap Inc. In the UK, several retailers adapted augmented reality (AR) to improve the shopping experience and engage their customers.



Top preferences include virtual styling, exploring runway collections, product tutorials, and immersive brand stories. Brands like Dior and Cartier are already meeting this demand with virtual try-ons and time-shopping store adventures.

Brand examples

* TESCO, a UK-based supermarket chain, has adopted a playful approach to shopping by integrating AR features into its Tesco Discover shopping app.

* Nisa Retail The company has integrated the Jisp Scan & Save app into over 50 of its stores. The app's in-store digital voucher redemption system enables customers to save money on branded products by scanning barcodes at the shelf edge.

AR in India

Augmented reality (AR) has now gained a prominent position in the Indian retail industry and has the potential to have a substantial impact. As the Indian market evolves, these technologies have the potential to offer customised, engaging, and highly interactive purchasing experiences that are impossible to resist. 

While lot of new age Indian retailers have already adopted the technology there is a growing interest among others to explore its potential for enhancing customer experiences, driving engagement, and staying competitive in the dynamic retail landscape.

Brand examples

* Tanishq, a well-known jewellery brand, has embraced AR to improve the jewellery-buying experience. Their AR app enables customers to virtually try on jewellery pieces, from earrings to necklaces, using their smartphones or tablets.

* Lenskart, a leading eyewear retailer, has embraced AR to assist customers in choosing the perfect pair of eyeglasses or sunglasses online. Their AR feature allows users to virtually try on different frames and see how they look in real-time.

Challenges in AR

The cost of AR technology makes retail implementation difficult as it demands expensive technology and software, which can deter retailers and small enterprises. Similarly, integrating with the existing systems such as inventory management and point-of-sale systems can be a challenging one. 

Network connectivity is another major challenge for the retailers in tier 2 cities as AR applications require a strong network connection to function correctly and retailers needs to review and if needed, improve the store’s network in advance to make any implementation decision.

Outcomes and future 

According to recent reports available 61% of people stated a preference for products with AR experiences and 40% of consumers are willing to pay more for a product that could be customized in Augmented Reality. The future of retail is both augmented and intelligent, and businesses that are ready to leverage their full potential will lead the industry. They have already made significant strides in the industry, setting the stage for future trends. 

In the coming years, gamified social experiences will probably be the next big thing in augmented retail. Brands often face challenges related to imaging and content expertise, which can impact their ability to effectively engage customers and drive sales. 

By partnering with CGI and imaging agencies where they offer high quality visual content, product visualization and customization with enhanced marketing campaigns with global reach and localization brands can ultimately drive sales and improve customer satisfaction by delivering engaging and realistic product experiences.

-- Guruprasad Kamath, CEO, Manipal Digital Solutions.