By some accounts, the third era of digital retail (the first era began with Amazon in 1995 and the second began with the launch of the iPhone in 2007) will be more digital, while feeling more human. One of the top technologies that fulfills these seemingly contradictory requirements is augmented reality (AR).

Unlike its flashier counterpart, virtual reality, which requires the user to put on special goggles to become immersed in a different world, AR adds information and other “enhancements” to the real world with the aid of technology. And to say AR is in a growth mode is an understatement. In 2015, the global AR market was valued at $3.33 billion, and within the next two years, it’s expected to reach $133.78 billion, growing at a CAGR (compound annual growth rate) of more than 85%.

Here are three reasons AR is driving the next era of digital retail:

1. Indoor Mapping and Spatial Tagging Enhancing the Shopping Experience
According to research from Statista, there were 2.1 billion smartphone users in 2016, and that number is expected to reach 2.5 billion by the end of this year.

New platforms are using computer vision and sensor fusion to enable indoor mapping, without the need for GPS. Google (ARCore) and Apple (ARKit) are using such AR tech to catalog the physical and visual world the same way Google has archived the digital world. What this means to the merchandiser is that consumers can use their smartphone or tablet to create a digital map of their shopping list in-store. This will reduce frustration in searching for desired products, and even allow the location to identify substitutes or other offerings, rather than have the patron leave for a different store.

As consumers become more used to AR experiences in their everyday lives (the iOS App Store offers more than 2,000 AR apps, and Google Play offers more than 200), it lowers the barriers to entry for business adoption too.

2. Marketing and Advertising
AR can provide a personalized experience to the consumer and facilitate an increase in both user engagement and brand recognition.  Ikea’s Place app is a good case in point. The app enables users to visualize what a piece of furniture will look like in their house. Each piece of furniture is also resizable to fit a room’s dimensions and observable from any angle and in any light. Users can even save specific room designs for future reference. By leveraging AR, Ikea is making it easier for customers to engage with its brand, pick the right furniture for their house and ultimately, buy more of their products.

Many customers prefer to try on products such as footwear, clothing or makeup before making a purchase. If the store is busy or the customer doesn’t have the time to wait in line for an available changing room, they might buy it and try it on later at home or leave the store empty-handed. Specialty retailers are turning to AR to solve this problem.  The Converse Sampler app allows customers to virtually try on a pair of shoes to see how they look on their feet. They can also snap a photo and share the AR image via Facebook or text to get feedback from friends before buying the shoes while promoting the app at the same time.

Adidas partnered with Snapchat on lens that lets mobile users virtually try on a new running shoe. Tapping on the Adidas logo in the menu bar of Snapchat’s lenses activates the AR experience, which starts with a brief unboxing video before letting users choose to see more information or try on the virtual shoes.

Sephora is combining 3D facial recognition technology with its AR-enabled Virtual Artist app, allowing users to upload a selfie to virtually try on various digital makeup products and see themselves moving in real time.

3. AR beyond Smartphones
Although smartphones play essential roles in the retail AR experience, retailers can provide customers with meaningful AR experiences without smartphones, too.

Thanks to AR-enabled mirrors, shoppers can virtually try on clothes, change sizes and colors and add accessories in a fraction of the time it would typically take.  Timberland, for example, is now incorporating virtual fitting rooms with its window displays, allowing those passing by its storefront to “try on” different outfits even before entering the store.

With assistance from the OWIZ app, optometrists and opticians are turning their in-store tablets into virtual mirrors that facilitate eyeglass selection. The solution enables eyeglass retailers to offer a virtual inventory of frames, including many that aren’t available in-store. The app includes social sharing so that customers can ask their friends’ opinions of the frames they are considering, and the company offers an inventory of more than 50,000 eyeglass frames.

Another technology that offers untapped AR potential for retailers is laser projection. Laser projection technology solutions, like Epson LightScene Accent like Epson LightScene Accent Lighting Laser Projectors, can add a dynamic digital layer of content on nearly any surface, providing merchandisers with an affordable way to transform an existing static space into a meaningful, engaging customer experience.

Retailers can also project images for wayfinding, branding and impromptu product promotions. Imagine that a customer is searching for a smart thermostat for their home, but already owns a voice assistant device. With laser projection technology, the retailer can project all compatible voice assistant devices on a nearby surface once the customer picks up the thermostat.

This creates cross-promotion opportunities and reduces customer returns. In addition, laser projection technology can deliver an internet-type transparency to the retail space by providing content directly onto, or next to a product. For example, once a customer picks up a shoe, all sizes and colors available for that shoe is instantly displayed. With a range of projection technology available to fit virtually any retailer’s digital signage needs, projectors offer a unique solution for an immersive and memorable shopping experience.  With laser projection, the possibilities are endless and limited only by retailers’ imaginations.

Within the past few years, AR has made the transition from a technology that seemed like a far-fetched solution to retailers’ challenges, to something that’s becoming a viable customer engagement tool. A recent research report from DigitalBridge found that 74% of consumers expect retailers to offer an augmented reality experience and 69% of 18-24 year-olds admit they would be more likely to shop with a brand that provided mixed/augmented reality or artificial intelligence.

While AR technology is still relatively new, there’s no doubt that it’s here to stay. Advances in consumer devices along with AR software development platforms like Apple’s ARKit and Google’s ARCore are helping move this technology into the mainstream very quickly.

Retailers who ignore the new opportunities AR brings could face a similar outcome as the brick-and-mortar retailers who ignored the potential of e-commerce years ago and tried to stick with business as usual. With all the store closings we witnessed over the last few years, that’s a lesson no retailer wants to relearn.