AR-Based Retail Market To Hit $12 Billion by 2025: New Data Out Now


ABI’s new report on the state of AR in retail explores key themes driving the technology’s adoption.

The pandemic accelerated the rate of digital transformation, enabling industries like retail to embrace innovation like never before. A 2020 study by IBM found that the pandemic accelerated the shift to digital shopping by roughly five years.

A new report by ABI Research suggests that retailers will need to embrace technologies such as Augmented Reality (AR) and virtual stores to retain their competitive edge. While AR is not new, it has matured over the past few years.

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Changes in consumer behavior and the urgency of digital transformation will drive AR adoption, according to the report. ABI Research estimates that the global AR market for retail, commerce, and marketing will exceed $12 billion by 2025.

“The advancements in face and spatial recognition in combination with WebAR and other content democratization efforts will be game changers for virtual try on and product preview experiences, allowing consumers to seamlessly access interactive and realistic AR content. Within the next two years, more and more brands will transfer their marketing campaigns and online shopping platforms from static webpages and 2D images to interactive experiences and platforms,” explains Eleftheria Kouri, research analyst at ABI Research.

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With AR becoming more accessible, capable, and affordable over the past few years, there is a renewed interest in AR’s application in the business context. AR platform vendors like ThreeKit and Cappacity have unveiled new 3D content creation tools that enable retailers to develop AR-ready content more easily. AR solution providers like Banuba and Polar Studio have also emerged, helping brands leverage AR to deliver interactive marketing campaigns across multiple platforms. Tech giants like Apple, Facebook, and Amazon have also invested in AR heavily.

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“Online shopping will continue to grow after the pandemic, especially in product categories supported by AR experiences such as make-up, clothing, and furniture. As data continues to come in supporting the success and ROI of AR/VR marketing efforts and satisfaction around user experiences, expect further investment and activity in the space as online retail and immersive content become increasingly partnered,” concludes Kouri.

What Does This Mean for Marketers?

The trends highlighted in ABI’s new report indicate we should expect to see an increase in saleable virtual goods and new retail formats over the next few years. AR has proven that it can add a lot of value for consumers and retailers – particularly now, as stay-at-home orders remain in effect across large parts of the country. It is time for marketers and retail leaders to not only rethink retail but catapult these immersive consumer journeys into the future.