Zara to offer mobile AR experience in stores

Dive Brief:

Fast fashion retailer Zara is launching a mobile augmented reality app to be used in stores, which allows shoppers standing near certain displays to view AR images of models wearing different items from those displays, as well as purchase the merchandise through the app, according to a Reuters story and several follow-up reports from other sources.
Zara will begin rolling out the technology next month in about 120 of its stores. When Zara customers have purchases from the store delivered to their homes, they also will be able to use the app in tandem with promotional packaging to view AR images of other clothing items, according to the reports.
Also this week, Zara parent Inditex reported slowing sales growth for its most recent fiscal year ended Jan. 31, but still managed a 7% rise in net profit for the year, according to the company's earnings report issued Wednesday. Inditex has yet to respond to Retail Dive's request for further details.

Dive Insight:

This sounds like a potentially intriguing use of augmented reality technology to bridge the mobile and in-store shopping experiences. Though some retailers have used AR and virtual reality in-store to enhance the sales process and customer experience, most of the latest mobile AR apps are intended to be used online or on mobile (and not necessarily while in physical stores) to help shoppers view merchandise within the context of their own homes and lives.

Zara appears to be taking a different path with this AR app by having it work with sensors on in-store outfit displays and some store window displays, as well as with AR-enabled packaging and promotional materials. What's not clear at this point is if customers will be able to use the app outside of those two contexts.

Zara and Inditex have been making an effort to use technology to keep Zara near the front of a tightly competitive fast fashion pack; indeed, technology was one of the "Four Pillars of Retail" Inditex outlined back in January as it aims to stay on a growth track. Meanwhile, other retailers in the fast fashion sector, such as H&M, Claire's and Charlotte Russe, have struggled.

Inditex seems to have set a good path for itself thus far. The company reported fiscal 2017 sales growth of about 5% for its retail store operations, lower than the previous year, but online sales jumped 41% during the same period, and Inditex Chairman and CEO Pablo Isla said in the earnings report that the company continues to see the integration of in-store and online sales efforts as a driver of growth and a top priority for this year.

The AR app is a perfect example of that integration, but it's just Zara's latest technology move. Earlier this month, the Wall Street Journal reported that the retailer was starting to use automated kiosks in stores and package-picking robots behind the scenes to help accelerate the in-store click-and-collect processes. Zara also opened a pop-up dedicated to digital sales in London back in January.

Despite the wide sector embrace of AR technology, we haven't heard as of yet how well they are performing, and if they really are driving sales and improving customer loyalty. Zara is putting a lot of new technology in front of customers, but customer adoption is key to making that technology work.