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The augmented reality in retail market size is estimated to grow by USD 19.51 billion at a CAGR of 57.74% between 2023 and 2028. Augmented Reality is revolutionizing advertising by overlaying digital information onto the physical world, creating immersive experiences that engage consumers more effectively. By integrating AR into marketing campaigns, businesses can offer interactive product demonstrations, virtual try-ons, and personalized promotions, resulting in increased customer engagement and sales. AR technology also enhances operational efficiency. In industries such as manufacturing and logistics, AR headsets enable workers to access real-time instructions, visualize complex processes, and perform tasks more accurately. This leads to reduced errors, improved productivity, and cost savings. In customer-facing roles, AR technology streamlines interactions by providing instant access to customer information, allowing representatives to offer personalized solutions and address issues more efficiently. This not only improves the customer experience but also reduces the workload on support teams, enabling them to focus on more complex queries.
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Augmented Reality (AR) is revolutionizing the retail sector by bringing digital objects into the real world. AR technology enables consumers to view virtual items in their physical environment using a viewing device like a phone or tablet, or AR glasses. This digital technology enhances the shopping experience by adding visual and auditory elements to online shopping. Retailers are increasingly adopting AR to provide a more immersive and interactive experience for customers, especially younger generations who prefer online shopping. Furniture retailers, for instance, use AR to allow customers to visualize how furniture would look in their homes before making a purchase. With the high smartphone penetration and increasing connected devices, AR advertising is becoming a significant trend in the retail industry. Real-time customer experience, digital information, and IoT spending are driving the growth of AR in retail. Virtual Fitting Rooms and Visualizing Software are some of the applications of AR in physical stores, improving online conversion rates and reducing returns. The integration of AR in retail is expected to continue as Internet penetration increases and retailers invest in this technology to enhance customer experience. Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Use of AR technology to make advertising more effective is notably driving market growth. Augmented Reality (AR) technology is revolutionizing the retail industry by bridging the gap between the physical and digital worlds. With the increasing penetration of smartphones and connected devices, AR is becoming an essential tool for retailers to enhance customer experience and drive sales. Furniture retailers, clothing industry leaders, and jewelry stores are embracing AR solutions to offer virtual apparel fitting, try-before-you-buy options, and virtual representation of products. AR-enabled try-on solutions and smart AR mirrors are transforming the shopping experience for younger customers, particularly in the apparel industry. AR is also being adopted in automotive interior planning, providing consumers with 3D visualizations and personalized customization.
Furthermore, the retail sector's growth is further fueled by private equity investments, IoT spending, and the increasing internet penetration. AR options allow customers to visualize products in real-time, reducing online returns and enhancing the online conversion rate. Virtual Fitting Rooms and Visualizing Software are innovative AR solutions that enable customers to try on products virtually, creating a more engaging and interactive shopping experience in both physical stores and online retail environments. Overall, AR technology is a game-changer for the retail industry, offering personalized, immersive, and realistic product visualization, thereby improving customer satisfaction and driving sales. Thus, such factors are driving the growth of the market during the forecast period.
Growing smartphones and tablets will fuel growth of AR in retail industry is the key trend in the market. The retail industry is witnessing a significant shift towards augmented reality (AR) technology as manufacturers of connected devices, such as smartphones, integrate AR capabilities to enhance the shopping experience. With the increasing penetration of smartphones and IoT spending, AR technologies are becoming more accessible to consumers in various sectors, including furniture retailers, clothing industry, jewelry stores, and automotive interior planning. Younger customers, in particular, are embracing online furniture shopping and virtual apparel fitting as AR options offer a try-before-you-buy experience and personal customization. Online retailers are investing in innovative AR solutions to visualize products in real time, allowing customers to virtually place items in their homes for 3D visualizations and space planning.
This not only improves the customer experience but also reduces online conversion rates and return rates. In the apparel industry, virtual fitting rooms and visualizing software are revolutionizing the way consumers shop for clothes. Similarly, in the commercial markets, AR technologies are being used for space planning and product visualization in industries such as automotive and real estate. Overall, the integration of AR technologies in retail is expected to continue to grow as consumer markets and e-commerce industries invest in this technology to offer a more immersive and personalized shopping experience. Thus, such trends will shape the growth of the market during the forecast period.
Privacy and security concerns over AR is the major challenge that affects the growth of the market. Augmented Reality (AR) technology is transforming the retail industry by providing immersive and interactive shopping experiences for consumers. With the increasing smartphone penetration and connected devices, retailers in various sectors such as furniture, clothing, jewelry, and automotive are exploring AR solutions to enhance customer experience and drive sales. Younger customers, particularly those who prefer online shopping, are increasingly seeking try-before-you-buy options and virtual apparel fitting through smart AR mirrors. In the furniture industry, AR technology enables 3D visualizations of products in homes, allowing customers to make informed purchasing decisions. AR is also being used in the apparel industry for virtual representation of clothing and personal customization. In jewelry stores, AR solutions offer virtual try-on solutions, while automotive interior planning allows customers to visualize and customize their car interiors in real time.
Furthermore, private equity investments and IoT spending in AR technology are expected to grow significantly in both consumer and commercial markets. E-commerce retailers are also investing in innovative AR solutions to enhance online conversion rates and reduce returned products. Despite the numerous benefits, privacy concerns remain a major challenge to the widespread adoption of AR technology in retail. AR collects and processes vast amounts of digital information, raising concerns about data privacy and security. It can access personal data from users and their social networking accounts, potentially posing a threat to privacy. User privacy can also be compromised if hackers gain access to users' devices. Retailers must prioritize privacy and security to build trust with their customers and ensure the successful implementation of AR technology. Hence, the above factors will impede the growth of the market during the forecast period
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Alphabet Inc. - The company offers augmented reality solutions under the subsidiary Google LLC.
The market research and growth report also includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market share growth by the apparel segment will be significant during the forecast period. The retail industry is witnessing a significant shift towards the integration of Augmented Reality (AR) technology, driven by the high penetration of smartphones and connected devices. AR is revolutionizing various sectors, including furniture retailers and the clothing industry, by offering immersive shopping experiences.
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The apparel segment showed a gradual increase in the market share of USD 321.70 million in 2018. Younger customers, in particular, are embracing AR for online furniture shopping and virtual apparel fitting, which provides a try-before-you-buy option and try-on solutions. In jewelry stores, AR is used for automotive interior planning and virtual representation, enhancing the customer experience. AR technology is also gaining traction in the apparel industry, where it is used for branding and marketing, both online and offline. The consumer markets and commercial markets are witnessing increased spending on IoT and Digital information, leading to the adoption of Virtual Fitting Rooms and Visualizing Software. AR options for personal customization and virtual representation in 3D are driving online conversion rates while reducing return rates. Online retailers are investing in innovative AR solutions to visualize products in homes and offer 3D visualizations of spaces.
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North America is estimated to contribute 30% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The advanced and mature technological landscape across the retail industry will facilitate augmented reality in retail market growth in North America over the forecast period. This market research report entails detailed information on the competitive intelligence, marketing gaps, and regional opportunities in store for vendors, which will assist in creating efficient business plans.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
Mobile Augmented Reality (AR) Market Analysis North America, APAC, Europe, South America, Middle East and Africa - US, China, Japan, Germany, UK - Size and Forecast
Augmented Reality (AR) Market Analysis North America,APAC,Europe,South America,Middle East and Africa - US,China,Japan,Germany,UK - Size and Forecast
Augmented Reality and Virtual Reality Market Analysis North America,APAC,Europe,Middle East and Africa,South America - US,China,Japan,Germany,UK - Size and Forecast
Augmented Reality (AR) is revolutionizing the retail sector by merging digital objects with the real world, creating an interactive and engaging shopping experience. AR technology uses a viewing device such as a phone, tablet, AR glasses, or head-mounted display to superimpose visual elements, sound, and sensory information onto the physical environment. Retailers are embracing AR technology to enhance advertising and marketing efforts, offering try-on solutions for apparel fitting, planning and designing, and information systems for jewelry, beauty and cosmetics, furniture and lighting, grocery shopping, footwear, and other product categories.
AR applications in retail include smartphone apps, AR glasses, and smart AR mirrors. Hardware and software are essential components of AR set-up, with LiDAR technology enabling accurate depth perception and language translation enhancing the user experience. While AR offers numerous benefits, privacy and security concerns remain a challenge for retailers. The footwear and jewelry segments are expected to dominate the AR market in retail, with online shopping also set to benefit from this digital technology. As AR continues to evolve, it will transform the retail landscape, providing customers with a more personalized, immersive, and interactive shopping experience.
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Market Scope |
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Report Coverage |
Details |
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Page number |
147 |
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Base year |
2023 |
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Historic period |
2018 - 2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 57.74% |
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Market growth 2024-2028 |
USD 19.51 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
43.16 |
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Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 30% |
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Key countries |
US, China, Germany, UK, and Canada |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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Key companies profiled |
Alphabet Inc., Apple Inc., Elbit Systems Ltd., HP Inc., HTC Corp., Kopin Corp., Lenovo Group Ltd., Lumus Ltd., Magic Leap Inc., Microsoft Corp., NexTech AR Solutions Corp., PTC Inc., Qualcomm Inc., Samsung Electronics Co. Ltd., Sony Group Corp., Toshiba Corp., Upskill, VR Vision Inc., Vuzix Corp., and Zugara Inc. |
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Market dynamics |
Parent market analysis, MarketForecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for market forecast period |
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Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Opportunity/Restraints
10 Competitive Landscape
11 Competitive Analysis
12 Appendix
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