The highly competitive retail and e-commerce sector in the United States has become a major driver and a key battleground for the commercial application of augmented reality, as detailed in the Augmented Reality Report. Retailers are increasingly turning to AR as a powerful new tool to bridge the gap between the digital and physical shopping experience, to increase customer engagement, and, most importantly, to drive conversion and reduce returns. The application of AR in retail falls into two main categories. The first is the "virtual try-on" experience. This allows a customer to use the camera on their smartphone to see what a product would look like on themselves or in their own environment before they buy it. This is a game-changer for a wide range of product categories. The second category is using AR to enhance the in-store shopping experience, providing customers with interactive product information, navigation, and entertainment. For US retailers, who are in a constant battle with pure-play e-commerce giants like Amazon, AR provides a unique way to create a more engaging and differentiated customer experience, both online and in their physical stores.
Key Players
The key players in the AR retail space are a mix of the major retail brands themselves, the technology platforms they use, and a host of specialized AR for commerce startups. Major US retailers like IKEA, Home Depot, and Wayfair have been pioneers in using AR, most notably with "view in your room" features that allow customers to place a true-to-scale, 3D model of a piece of furniture in their own home using their smartphone camera. In the beauty sector, brands like Sephora and L'Oréal have been leaders in developing "virtual try-on" tools for makeup. In the fashion space, companies like Nike and Warby Parker have experimented with AR for trying on sneakers and eyeglasses. The key technology enablers for these experiences are the mobile AR platforms (Apple's ARKit and Google's ARCore) and the social media platforms (Snapchat and Instagram) that offer their own AR try-on features for brands. A vibrant ecosystem of specialized startups is also emerging, providing the "picks and shovels" for AR commerce, such as platforms for creating high-quality 3D models of products at scale or for building and deploying virtual try-on experiences.
Future in "Augmented Reality Report"
The future of AR in US retail will be a story of greater realism, deeper integration, and a move from a novelty to a standard feature. The future will see the development of much more photorealistic 3D models and more accurate body and face tracking, making the virtual try-on experience almost indistinguishable from the real thing. This will be critical for reducing the high return rates that plague the online apparel industry. Another major future trend will be the deep integration of AR features directly into a retailer's main mobile app and e-commerce website, moving it from a separate, gimmicky app to a core part of the shopping journey. We will also see a greater use of AR in the physical store. This could include using AR to provide "endless aisle" experiences, where a customer can view a retailer's entire online catalog in 3D even if the product is not in stock in that particular store. The ultimate vision is a seamless, omnichannel experience where AR acts as the digital bridge between a brand's online and offline worlds, a vision being most aggressively pursued in the highly competitive US market compared to other regions.
Key Points "Augmented Reality Report"
Several key points define the impact of AR on the US retail market. The primary driver is the technology's ability to increase purchase confidence and reduce returns through "virtual try-on" and visualization. The key players are the innovative major retail brands, the underlying mobile and social AR platforms, and the specialized AR commerce startups. The future lies in creating more realistic and deeply integrated AR commerce experiences that become a standard part of the online and in-store shopping journey. AR is transforming from a marketing gimmick into a powerful and essential tool for modern retail. The Augmented Reality Report size is projected to grow to USD 299.99 Billion by 2035, exhibiting a CAGR of 18.9% during the forecast period 2025-2035.
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