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What Do Consumers Expect from In-Store Technology?

How technology will shape the future has been one of the driving questions of industrialized societies since the 19th century. Will technological advancements provide us with endless luxury and leisure, or will they only lead to more instability and inequality? These questions have come to the fore once again with recent advances in artificial intelligence and machine learning. AI firms are making sweeping claims about their technologies’ capabilities, so much so that the FTC had to issue a warning to “Keep your AI claims in check.” But these and other new technologies have captured the imaginations of businesses and consumers alike. Businesses are interested in technologies that will reduce costs and give them a competitive edge. Consumers are interested in technologies that will engage them and save them time and money. But what are consumers really looking for from a tech-enhanced customer experience? A few new consumer studies offer some interesting clues but few definitive answers.

Augmented Reality

For a while, it seemed like some mixture of augmented reality and virtual reality (AR/VR) would be the future of retail, but AR and VR have taken different paths. In augmented reality, consumers looking through their smartphones receive real-time information about products: prices, promotions, reviews, ingredients, and recommendations fed to them while they shop. This was also the goal of products like Google Glass, a mixed reality product which today could be either a technological dead end or just ahead of its time, as the Apple Newton PDA, released in 1993, was to the iPhone. (The blending of the physical and digital realms is sometimes called “phygital,” but let us come together to ensure this terrible-sounding neologism never catches on.)

Consumers seem to have taken to AR. An oft-cited survey by digital payments service Klarna of consumer expectations for the next 18 years tells us that 76% of Gen Z shoppers expect AR to enhance their in-store experience, with 27% believing the technology will become a standard component of in-store retail shopping in the next two decades. But this points to expectation, not necessarily preference. A similar survey by Snap found that retail is the favored use for AR among consumers, with technology that allows consumers to virtually interact with a product or virtually try on clothes before buying being particularly popular. This is a use of AR that is currently popular, which perhaps speaks to consumers’ expectations about AR in the future as well as their preferences.

Consumers like AR, but what about businesses? A Harvard Business Review study provides a succinct answer: “AR increases revenue.” And for more expensive products, their study finds, AR apps that allow consumers to interact with products make “customers feel more comfortable making riskier purchases.” Such applications of AR will be particularly beneficial to luxury retailers.

Virtual Reality

While AR is already proving to be a popular technology, the future of VR is less certain. According to the Klarna survey, half of Gen Z and Millennial shoppers say they will prefer shopping in virtual reality more than in physical stores 18 years from now. Yet current evidence does not support this prediction. The much-hyped metaverse is a virtual ghost townTeens don’t seem particularly interested in VR—even those who own headsets rarely use them. Perhaps in the future, the technology will become user-friendly enough to see widespread adoption, but right now, VR seems like a bust. Silicon Valley, and the venture capital that funds it, seems to agree. Where VR and cryptocurrency seemed like the future a year ago, all of that investment has moved to AI research.

Other Customer Experience Technologies

AR/VR isn’t the only technology with the ability to enhance the in-store experience. The Klarna survey points to other technologies that consumers expect to enhance the customer experience of the future. 56% of respondents expect more personalization. Personalization enhanced by AI machine learning might involve gathering data on consumer habits and making recommendations. These recommendations can also come from interactions with chatbots in the role of virtual personal shoppers.

Consumers Want Both Immersion and Connection

Why is AR thriving while VR languishes? For one thing, AR apps are easy to use, intuitive, and usually cost consumers nothing, while VR headsets continue to be expensive and bulky. It’s easier for consumers to see the value in an AR app that enhances their in-store experience, as it builds on what they already know. VR remains too much of a leap for the average consumer. While AR is immersive, VR might be a little too immersive, and most of us have a tenuous enough connection to our communities and the people around us as it is. People are lonelier than ever before. Technology boosters often forget that science fiction works that depict highly immersive virtual or mixed reality worlds, such as Snow Crash, Minority Report, and Ready Player One, are dystopias; at a human level, we don’t want to totally replace the real world with a fake one. We want technology that allows us to better experience and connect with the real world.