The global virtual reality and augmented reality in retail market is expected to grow from US$ 3790.94 million in 2021 to US$ 17864.86 million by 2028; it is estimated to grow at a CAGR of 24.8% during 2021–2028.
Brands use virtual and augmented reality technology to promote themselves and their products in virtual reality marketing. The technology generates a fictitious yet realistic setting. Depending on the device, virtual reality marketing might be visual or multi-sensory. A full virtual reality headset provides a fully immersive experience, whereas a virtual reality Instagram filter only overlays objects or photographs onto the camera view. Augmented reality (AR) marketing is what these filters are. AR is a type of virtual reality in which a virtual image is superimposed on the real environment. The most prevalent sort of virtual reality marketing is augmented reality marketing. For many businesses, it is more practical and less expensive than developing a headset experience. Consumers will find augmented reality more accessible because it only requires a phone or desktop app. For example, with its Virtual Artist app, Sephora was one of the first to adopt augmented reality marketing. Virtual reality marketing is also a fun approach to get the word out about new products. Gucci’s app now has an augmented reality element to advertise its new Ace footwear range. Users can aim the camera at their feet to view how various sneaker styles would look on them. They can see the shoes from a variety of angles, owing to the technology’s movement tracking abilities. Similarly, Instagram recently teamed up with Spark AR to launch a new feature that allows users to design their own AR filters. Words or images are superimposed on top of the actual image in the camera view by the filters. This is being used by brands to make filters that display their logo or other branded image. For example, Coca-Cola Poland designed one that practically places its polar bear mascot in the room with the viewer. Thus, the high adoption of AR and VR technologies by brands for marketing purpose is expected to contribute to the growth of the market.
The virtual reality and augmented reality in retail market is segmented based on type, application, and geography. Based on type, the market is categorized into AR and VR. The AR segment represented a larger share of the overall market in 2020. Based on application, the virtual reality and augmented reality in retail market is segmented into online retail and offline retail. In 2020, the online retail segment accounted for the substantial share of the market. Geographically, the market is broadly segmented into North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America (SAM). In 2020, North America accounted for the significant share in the global market.
With the COVID-19 pandemic spreading across the US, all industries have been severely impacted. As a result, any impact on industry has a direct impact on the region’s economic growth. The unusual spike in COVID-19 cases in the US, as well as the accompanying lockdown to battle the virus’s spread across the country in the first two quarters of 2020, has prompted many businesses to prepare for the worst. In 2020, technological investments experienced a dip, owing to the above-mentioned reasons. However, the retail industry has been adopting technologies such as virtual reality and augmented reality much before the pandemic.
According to IBM’s 2020 US Retail Index report, the pandemic has expedited the shift to digital purchasing by about five years. Virtual "try-before-you-buy" experiences ranging from previewing furniture and house products of brands such as IKEA and Home Depot to digitally trying on luxury fashion brands such as Louis Vuitton and Gucci. Similarly, GLAMlab’s Ulta’s virtual try-on beauty tool, which was established four years ago, has seen an increase in utilization during the pandemic. In addition, when jewelry manufacturer Kendra Scott’s stores were temporarily closed, the company implemented an augmented reality application that let buyers to visually try on numerous earring styles from the comfort of their own homes. Thus, rise in adoption of AR by customers and increase in investment in the technology by retailers during the pandemic have positively impacted the growth of the market across the region.
The overall virtual reality and augmented reality in retail market size has been derived using both primary and secondary sources. To begin the research process, exhaustive secondary research has been conducted using internal and external sources to obtain qualitative and quantitative information related to the market. The process also serves the purpose of obtaining an overview and forecast for the virtual reality and augmented reality in retail market with respect to all the segments. It also provides the overview and forecast for the market based on all the segmentation provided with respect to five major regions?North America, Europe, Asia Pacific, Middle East & Africa, and South America. Also, primary interviews were conducted with industry participants and commentators to validate data and gain more analytical insights into the topic. The participants of this process include industry experts such as VPs, business development managers, market intelligence managers, and national sales managers, along with external consultants such as valuation experts, research analysts, and key opinion leaders, specializing in the virtual reality and augmented reality in retail market.
The key companies operating in the virtual reality and augmented reality in retail market include Epson America, Inc.; Marxent; Google LLC; Infosys Ltd; Intel Corporation; Microsoft Corporation; PTC Inc.; Qualcomm Technologies, Inc.; Retail VR; and Samsung Electronics Co., Ltd.