Brief:

• Target added augmented reality (AR) technology to its mobile app to help shoppers find the perfect-sized artificial Christmas tree and to decorate their homes, according to a blog post. The app's "See It in Your Space" feature overlays a digital image of a life-sized tree against a real background seen through a smartphone camera.
• Christmas trees marked with an "AR" icon or a "See It in Your Space" description can be tapped to activate the feature that will provide a realistic view of how the tree will look. As part of its holiday promotions, Target is offering 30% off select artificial tress from Wondershop and Philips this week.
• Target also added six unique "holiday rooms" to its virtual, 360-degree shopping feature. The virtual rooms show how dozens of popular holiday products look at scale in living rooms, dining rooms and bedrooms.

Insight:

Target's AR shopping features are designed to ease the stress of buying items such as holiday decorations. Instead of estimating the size of a tree, ordering it and possibly being disappointed when it's unboxed, customers can get a better idea of what it will look like in an actual setting before placing an order. AR demonstrations and 360-degree views of products help to manage customer expectations, and likely lead to fewer product returns.

Retailers are offering more tech-focused shopping experiences to appeal to millennials and Gen Zers, who are comfortable mixing their in-store and online shopping. Millennials expect retailers to provide fast, convenient shopping experiences, with 47% saying they buy online and pick up in-store more than 40% of the time compared to 30% of Gen Xers and 14% of baby boomers, according to a report by Euclid. Among Gen Zers, 80% say they look forward to shopping in stores when they have time, but 75% prefer to shop online out of convenience, according to Criteo research. Retailers like Ikea, Houzz, Artemest, Macy's, Wayfair and Williams-Sonoma have added 3D and AR tech to their marketing mix to enhance the shopping experience.

Worldwide spending on augmented reality and virtual reality (AR/VR) is forecast to grow 68.8% from this year to about $20.4 billion in 2019, according to the International Data Corporation. The most popular commercial uses for AR/VR technology next year will be training ($1.8 billion), online retail showcasing ($558 million) and industrial maintenance ($413 million). The industries that will spend the most on AR/VR next year are personal and consumer services ($1.6 billion), retail ($1.56 billion) and discrete manufacturing ($1.54 billion), IDC estimated.

Target's promotion of its AR features come as the holiday-shopping season reaches the midpoint between Black Friday and Christmas. The retailer last month introduced its new holiday campaign, "Gather Round," and unveiled mobile checkout at stores nationwide, giving shoppers the ability to skip the line.