Augmented Reality in Retail – Thematic Research

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The global Augmented Reality (AR) market was worth nearly $4 billion in 2018. The market is expected to grow at a CAGR of more than 23% during the forecast period.  AR is a technology that allows the user to see the real world overlaid with digital data. Ultimately, AR could be the next mobile computing platform, with the potential to replace smartphones as the primary connected device in the next decade.

AR could completely change the way we shop. The retail industry is evolving at a staggering rate, and retailers that offer a truly omnichannel experience will emerge as winners. AR is essential for retailers to merge the physical with the virtual and adapt to the new retail model. From warehouses to eCommerce sites and stores, AR can be used by retailers to address some of the challenges they face today. In the short term, retailers should focus their investments on developing mobile-based AR, such as 3D product visualization, and store-based AR experiences, like magic mirrors.

Global AR market overview

Global AR market overview

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What is the impact of AR on the retail industry?

Globally, physical retail was losing out to online retail long before the COVID-19 pandemic. However, national lockdowns have supercharged this trend. One of the most challenging obstacles the online channel must overcome is the limitations of websites for product visualization. AR can be used by both pure eCommerce players and brick-and-mortar retailers to help bridge the gap between the physical item and the context in which it will be used.

Consumer goods brands are developing strategies that bypass retailers and sell their products directly to consumers. Alibaba is at the forefront of developing this ‘New Retail’ model and aims to completely digitize every aspect of the shopping experience, combining online and offline retail.

Bricks and mortar retailers are using their large footprint of warehouses and store locations as eCommerce fulfillment centers. Walmart has turned four of its stores into eCommerce test laboratories to better understand how the company can use its huge store network to its advantage. The company will be testing tools and store layout strategies to fulfill online orders faster, which includes an AR app that can scan multiple boxes at a time as they are moved onto the shop floor.

Today, retail has highly become customer-centric, and retailers are using the latest technologies to better serve their customers in response to customers, placing more value on the overall experience than the product itself. With everything in the world becoming digital, the next thing to become digital will be stores, and AR will be central to this. The combination of AR and AI in retail stores will help to create personalized experiences and make purchasing in stores more attractive.

What are the different value chains of AR?

The value chains of AR can be divided into five segments: semiconductors, components, devices, platforms, and apps & content.


Semiconductors are one of the key battlegrounds in AR today. Chipmakers are now striving to improve their existing capabilities to suit the evolving requirements of AR, mostly around screen resolution, frame rates, processing speed, and connectivity.


Much of the major action in AR components is around 3D sensors, cameras, audio, displays, and batteries. These components come together for positional tracking, motion tracking, gesture recognition, and machine vision.


AR-enabling hardware comes in various forms, including smartphones, eyewear (AR smart glasses), and AR headsets. For consumer AR applications, smartphones are the most used platform, while enterprises typically prefer AR headsets and AR smart glasses, which offer a broader range of functions.


Building an AR ecosystem by incorporating both hardware and software is essential for the long-term success of any company in this market. The five prerequisites for a successful AR ecosystem are APIs & SDKs, AR engines – games, AR engines – enterprise, AI, and application delivery networks (ADNs) & content delivery networks (CDNs).

Apps & Content

Content is a major area of concern for AR companies. AR is reaching consumers via social media, eCommerce, and apps like Google Maps. Snapchat, for example, is adding AR features to its platform, including lenses (which add AR filters to users’ photos) and Scan (which creates GIFs based on the user’s surroundings).

Which are the key retail companies associated with the AR theme?

The key retail companies associated with the AR theme are ASOS, eBay, IKEA, Inditex (Zara),, John Lewis, Lego, Lowe’s, Nike, Sephora, Target, The Home Depot, and Walmart.

Which are the specialist AR vendors in the retail industry?

The specialist AR vendors in the retail industry are Augment, Groove Jones, Holition, INDE, ModiFace, NexTech AR Solutions, Queppelin Technology Solutions, Quytech, and ScienceSoft.

Market Report Scope

Market size (Year – 2018) Nearly $4 billion
CAGR (Growth Rate) >23%
Forecast period 2019-2030
Value chains Semiconductors, components, devices, platforms, and apps & content.
Key retail companies ASOS, eBay, IKEA, Inditex (Zara),, John Lewis, Lego, Lowe’s, Nike, Sephora, Target, The Home Depot, and Walmart
Specialist AR vendors Augment, Groove Jones, Holition, INDE, ModiFace, NexTech AR Solutions, Queppelin Technology Solutions, Quytech, and ScienceSoft


GlobalData delves deep into the theme of AR and specifically focuses on the impact of this technology on the retail space. The report provides an overview of AR and the essential components needed and discusses retailer challenges, case studies of AR use in the retail domain, and leading companies creating and/or utilizing AR. The report also provides market size and growth forecasts and provides a timeline for AR developments. We explore how the current climate has acted as an impetus for retailers to embrace AR and how AR will play out in the retail market over the years to come. The report spotlights the key challenges faced by retailers for further AR rollout and the significant impact that AR can have on the retail space, changing not only the way consumers shop but also the way companies operate.

Reasons to Buy

  • Break down the components of AR and highlights the leading companies operating within each space, allowing you to gain insight into the fundamentals of AR, the technology behind it, and key advancements to watch out for.
  • Gain an understanding of the challenges that retailers face when embracing AR, whilst also developing an understanding of the potential impact and uses of AR for retailers.
  • Discover success case studies in the market and learn how to adapt your business to harness AR in the best way.
  • Explore how AR has helped combat the ramifications and challenges imposed by COVID-19 and learn how to tech-enabled your business to futureproof against future uncertainty.
  • Explore AR initiatives and how they can change the retail landscape and affect your business and business model.

Charlotte Tilbury
Groove Jones
John Lewis
Magic Leap
NexTech AR
The Home Depot
Walt Disney

Table of Contents

Executive Summary

Value Chain

Retail Challenges

Impact of AR on Retail

AR and Online Shopping

AR and New Retail Model

AR and Overcapacity

AR & Experience

AR and COVID-19

Case studies

Market Size and Growth Forecasts

Augmented Reality Timeline



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