Augmented Reality In Retail Market Size, Share, Trends, Growth 2032

Augmented Reality in Retail Industry Prospective:

The global augmented reality in retail market size was worth around USD 3.71 billion in 2023 and is predicted to grow to around USD 60.23 billion by 2032 with a compound annual growth rate (CAGR) of roughly 36.28% between 2024 and 2032.

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Augmented Reality in Retail Market: Overview

Augmented reality (AR) in retail is one of the novel technologies that is expected to revolutionize the shopping experience. The format leverages the offerings of AR technology in the retail industry across segments, including clothing & accessories, fashion items, home decor products, and others.

Using augmented reality (AR) in retail, businesses allow customers to view products in 3-dimension without trying the product, thus ensuring a better and quicker shopping journey. In addition, AR can be implemented in offline and online stores, thus improving the overall profit margins for service and product sellers across the globe.

Some of the most evident benefits of using augmented reality in retail include improved customer satisfaction, reduced returns, and opportunities to collect relevant data that can be further processed to understand buying patterns among customers.

Investments in the AR-based retail industry have been growing in the last few years due to the increased comfort and interest shown by customers in new solutions that enhance the buying process.

Additionally, increased research & development in terms of AR technology will further aid higher market growth in the long run.

However, the cost associated with the technology and concerns regarding the loss of human job opportunities may limit the augmented reality in retail industry’s expansion trends.

Key Insights:

• As per the analysis shared by our research analyst, the global augmented reality in retail market is estimated to grow annually at a CAGR of around 36.28% over the forecast period (2024-2032)
• In terms of revenue, the global augmented reality in retail market size was valued at around USD 3.71 billion in 2023 and is projected to reach USD 60.23 billion by 2032.
• The augmented reality in retail market is projected to grow at a significant rate due to the rising number of AR users worldwide.
• Based on the retail type, the apparel fitting segment is growing at a high rate and will continue to dominate the global market as per industry projections.
• Based on the device type, the handheld segment is anticipated to command the largest market share.
• Based on region, North America is projected to dominate the global market during the forecast period.

Augmented Reality in Retail Market: Growth Drivers

Rising number of AR users worldwide to drive market growth rate during the forecast period

The global augmented reality in retail is expected to grow due to the rising number of AR users worldwide. According to market research, more than 74% of the world population is expected to become comfortable with using AR-based solutions by 2025.

The statistics are influenced by the growing number of technologically-driven younger population along with increasing comfort with engineering solutions in the elderly buyers.

In addition to this, increased access to AR and virtual reality (VR) technologies, along with higher consumer awareness, has further influenced more people to invest in technologies related to augmented reality in the form of entertainment units and educational material. As per official statistics, more than 1.41 billion people across the globe use AR technology in at least one form.

As the number of augmented reality users continues to grow, the demand for AR in retail could reach higher growth momentum during the forecast period.

Rising investments in AR technology will help end-users deliver a better customer experience

The wide applications of AR technology across industries have encouraged more investments in the engineering tool. AR designers and developers are consistently investing in improving the technology, which could translate to higher revenue in the global augmented reality retail market. Major technology firms such as Apple, Microsoft, and Google are some of the largest investors in AR systems.

In September 2024, Vuzix, a leading supplier of AR technology & products and smart glasses, announced that it received USD 20 million from Quanta Computer Inc. as a strategic investment. Vuzix is expected to use the fund for further expansion of its business operations.

Augmented Reality in Retail Market: Restraints

High cost of deployment will limit the industry’s expansion rate as research

The global industry for augmented reality in retail is expected to be restricted due to the high cost of implementing AR on a large scale.

Some of the most common technologies used for facilitating the incorporation of retail-oriented AR include smart mirrors or AR mirrors, augmented reality-enabling mobile applications, 3D modeling & rendering solutions, voice-activated AR, and image recognition & computer vision. Implementing these solutions on a mass scale can be expensive.

Additionally, the resources invested in training employees and constructing an ancillary infrastructure further increased the overall cost of deploying the technology.

Augmented Reality in Retail Market: Opportunities

Increased use of AR in the online shopping space to generate massive growth opportunities

The global augmented reality retail market is expected to generate growth opportunities due to the rising use of technology in the online shopping space.

E-commerce companies are seeking new ways to stand out from the rest of the online shopping solution providers. The increased competition in the e-commerce space has led to higher demand for innovative solutions such as the implementation of AR.

For instance, in December 2022, India’s leading e-commerce brand, Myntra, announced that it was planning to invest in technologies that improve customer experience. The company is focusing heavily on customized solutions, such as virtual try-ons using AR/VR systems and investments toward Web3.

In addition, the demand for AR is higher in home decor space. The technology allows customers to view and experience home decoration items such as curtains, furniture, and others in 3D space online before making the final purchase. The system ensures superior customer satisfaction, thus reducing the risk of returns.

Augmented Reality in Retail Market: Challenges

Several technical challenges act as hurdles during the forecast period

The global augmented reality in retail industry is expected to be challenged by the technical limitations of the technology. For instance, consumers may not have access to systems that support the AR experience, especially during online shopping.

In addition, AR systems such as smart glasses have restricted viewing frames limiting customer experience. In addition, the rising concerns of AR in retail taking over human job opportunities may further inhibit the industry’s growth trajectory.

Augmented Reality in Retail Market: Segmentation

The global augmented reality in retail market is segmented based on retail type, application, device type, component, and region.

Based on retail type, the global market segments are footwear, grocery shopping, apparel fitting, jewelry, furniture & lighting, beauty & cosmetics, and others.

In 2023, the highest growth was witnessed in the apparel fitting segment. The rising proliferation of online shopping, especially in the fashion industry, is driving the segmental growth rate.

Additionally, the use of AR in the luxury shopping industry, which is worth around USD 370 billion as of 2024, will further promote higher growth in the apparel fitting segment.

Based on application, augmented reality in retail industry divisions are planning & designing, trying on solutions, advertising & marketing, and information systems.

Based on device type, the augmented reality in retail industry segments are handheld devices, smart AR mirrors, and head-mounted devices. The highest revenue in 2023 was registered in the handheld segment. The ease of use offered by handheld AR-enabling systems such as tablets and smartphones is driving the segmental demand.

In addition, handheld systems are more cost-effective as compared to other devices. Enterprise models of smart AR mirrors can cost over USD 5000 per piece.

Based on components, the global market divisions are services, software, and hardware.

Augmented Reality in Retail Market: Report Scope

Augmented Reality in Retail Market: Regional Analysis

North America is projected to generate the highest revenue during the forecast period

The global augmented reality in retail market is expected to witness the highest growth in North America. The US is projected to lead the regional market from the front due to higher consumer awareness and comfort with AR technology.

In addition, major AR developers and investors are located in the US market, which further helps the region establish its dominance.

In September 2024, Google Ventures (GV), the venture capital arm of Alphabet Inc., announced an investment of USD 11 million in Distance Technologies.

The latter is a Finnish startup currently working on mixed-reality (MR) technology. Furthermore, the demand for AR in retail is high across regions such as clothing, fashion & accessories, and furniture.

Asia-Pacific is a growing market with high growth potential. Countries such as India, China, South Korea, and others will lead the regional market with higher returns on investments.

The South Korean cosmetic industry is one of the leading investors in AR in retail. The growing cosmetic tourism in South Korea will help promote higher adoption of VR and AR technologies in the coming years.

Augmented Reality in Retail Market: Competitive Analysis

The global augmented reality in retail market is led by players like:

• Walmart
• Prada
• Sephora
• IKEA
• Gucci
• Amazon
• L'Oreal
• Audi
• Adidas
• Lowe's
• Nike
• Target
• Snap Inc.
• Zara
• PepsiCo.

The global augmented reality in retail market is segmented as follows:

By Retail Type

• Footwear
• Grocery Shopping
• Apparel Fitting
• Jewelry
• Furniture & Lighting
• Beauty & Cosmetics
• Others

By Application

• Planning & Designing
• Try on Solutions
• Advertising & Marketing
• Information Systems

By Device Type

• Handheld Device
• Smart AR Mirror
• Head Mounted Display

By Component

• Services
• Software
• Hardware

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa