Augmented Reality Meaning: What Is AR and How Does It Work?

Augmented reality (AR) adds digital content, like 3D models, animations, or infographics, onto images of the real world viewed through a device like a smartphone camera. In ecommerce, AR helps customers make purchasing decisions, for example, by showing them how a couch fits in their living room or how sunglasses look on their face. 

When high-end purse brand Rebecca Minkoff added AR to its product pages, shoppers who interacted with a product in AR were 65% more likely to place an order than shoppers who didn’t, according to a Shopify case study. 

“When people have the intent to shop without physically being able to touch and see a product, the more options you can give them to create that confidence is helpful,” says Sarah Sheldon, Rebecca Minkoff’s then-senior director of global ecommerce and digital.

In this article, you’ll learn what augmented reality is, how it compares to virtual and mixed reality, and how brands use AR to help customers shop with more confidence.

What is augmented reality (AR)?

Augmented reality is technology that layers computer-generated content over images of a person’s physical environment, blending digital and physical worlds on the same screen. 

The term augmented reality was coined in 1992 by Boeing researchers Tom Caudell and David Mizell while developing technology to make aircraft manufacturing and assembly more efficient. They envisioned AR as a way to display digital information in the correct physical position on real-world objects, helping workers complete tasks such as positioning aircraft components. 

AR became more familiar to consumers through smartphone apps, including games and social filters like Pokémon Go’s location-based digital characters and Snapchat’s face filters. Since then, augmented reality applications have evolved from novelty features into tools that let customers preview 3D models in their space before buying. 

It also has wide ecommerce applications. For example, Cambridge Satchel Company replatformed to Shopify Plus, giving the brand access to AR and 3D tools that allow customers to virtually place a digital image of a Cambridge bag into an image of their actual surroundings. 

According to a Shopify case study, Founder Julie Deane saw the accessibility of the technology as particularly valuable for a smaller brand. 

“The fact that we can offer this kind of AR experience with our budget puts us on a level playing field with people who have much greater resources than we do.” 

How augmented reality works

AR bridges physical and digital worlds by anchoring a virtual object to a point in your environment so that it maintains its position and scale as the smartphone or tablet moves. Different types of AR accomplish this in different ways, but a typical ecommerce AR experience includes:

• Environmental capture. A device’s camera and sensors scan the environment and track the device’s position and orientation.

• Computer vision and tracking. AR software analyzes the captured images to identify surfaces, objects, and boundaries, building a digital map of the real-world environment.

• Anchoring and scale. The AR system anchors the 3D model to a fixed point and adjusts its size and position as the customer moves, so virtual objects and physical objects appear at a consistent scale. 

• Rendering and display. A rendering engine adds lighting, shadow, and perspective so that digital content blends effectively with the real environment on the device’s screen.

Frameworks like Apple’s ARKit and Google’s ARCore handle much of this processing on standard mobile devices, which is part of why AR features have become easier for online stores to add. Store owners also need a 3D model of the product they want customers to view. 

For Shopify stores, Shopify’s 3D scanner generates a 3D model from a physical product in about 10 to 15 minutes while the media editor lets you adjust its background and starting camera angle. You can also hire a specialist through the Shopify Partner Directory. 

Augmented reality vs. virtual reality vs. mixed reality

Augmented reality, virtual reality, and mixed reality, sometimes grouped under the umbrella term extended reality, differ in how they combine digital content with a user’s environment and how users interact with that content. 

AR technology adds digital elements to a view of the physical world, while virtual reality immerses users in a fully virtual environment. Mixed reality combines aspects of both by allowing elements to recognize and react to physical surroundings, although the distinction between augmented reality and mixed reality isn’t always clear-cut.

The table below summarizes the key differences:

Examples of augmented reality in ecommerce

For ecommerce businesses, AR can help customers evaluate products they can’t physically see, touch, or try before buying. Depending on the product and shopping experience, businesses can use AR in several ways: 

In-space visualization

Product visualization lets customers see a digital version of an item in the environment where they plan to use it. For products like furniture and home décor, this can help shoppers evaluate factors that may be difficult to judge from photos alone, such as scale, color, and how an item fits with its surroundings.

Custom furniture brand Oakywood lets shoppers choose a piece’s dimensions, colors, and materials, then preview the finished product in their home before ordering. 

Before implementing Precismo’s 3D scanning technology via Shopify AR, Oakywood would go months with almost no custom orders. After implementation, the brand began receiving 200 or 300 custom orders per month, Founder Mateusz Haberny says in a Shopify case study. 

3D try on

Virtual try-on addresses a specific purchase uncertainty: how a product will look on the customer. Jason Berndt, founder of temporary eyebrow tattoo company My Two Brows, worked with a virtual try-on company to adapt technology typically used for eyeglasses into an AR mirror for eyebrows. 

On the Shopify Masters podcast, Jason discusses how customers use the tool to preview brow shapes, sizes, and colors on their face before ordering. 

Social media engagement

Augmented reality marketing can also let store owners reach shoppers on social platforms rather than waiting for them to land on a product page. 

Nail polish brand OPI, for example, worked with Snapchat on an AR Lens—a type of Snapchat ad—that lets users hold their hands up to their phone camera and virtually try different polish colors on their nails. Snap says its technology can also represent differences in texture, design, and how the polish reflects in different light.

Types of augmented reality

• Marker-based AR
• Markerless AR
• Location-based AR
• Projection-based AR
• Superimposition-based AR

The term “augmented reality” can mean different things depending on how people implement the technology. Here are five types of AR you might encounter:

Marker-based AR

Marker-based AR relies on predefined markers, such as QR codes, to trigger the display of digital imagery. It requires scanning and image recognition capability, so it can function only on devices with digital cameras. 

Marker-based AR is common in the retail sector and in advertising, education, and other sectors in which a physical object or image can function as a point of interaction. It’s also known as image recognition AR or trigger-based AR.

Markerless AR

Markerless AR does not require a camera to scan for images, barcodes, or QR codes. Instead, it uses a device’s GPS, compass, and accelerometer, among other metrics, to determine the user’s location and orientation. 

This allows the AR software to orient virtual objects within the user’s view. With this type of AR, shoppers can open the mobile app or web page and scan their physical environment with their device to make the digital item appear on material surfaces, like a table or shelf.

Location-based AR

Location-based AR is a type of markerless AR that uses geographic data to tailor its output to specific locations. The technology then overlays digital content based on real-world coordinates. For example, a brand might use location-based AR to map path lines and arrows onto the physical aisles of a retail store, helping customers find products quickly.

Location-based AR is popular in the navigation industry, particularly for interactive digital maps. It also powers games like Pokémon Go, which places virtual objects in specific real-world locations. 

Projection-based AR

This type of AR projects digital content directly onto real-world physical surfaces. Essentially, an AR system projects light on a surface. Then, using sensors to detect interactions like gestures or movements, the AR system adjusts the projected image to respond to user behavior. 

You can find projection-based AR in interactive displays, art installations, and heads-up displays in vehicles. Projection-based AR can also create virtual keyboards on flat tables or interactive gaming interfaces on flat walls.

Superimposition-based AR

Superimposition-based AR systems can replace the original view of an object with an augmented view of that same object. For instance, medical professionals in the health care industry use superimposition-based AR to overlay anatomical structures on a patient’s body. 

In industrial and manufacturing environments, superimposition-based AR enables users to view partially finished products in their fully finished forms.

Uses of augmented reality in other industries

Augmented reality has many useful applications across an array of industries. Here are a few of the spaces outside of ecommerce in which you might encounter AR technology:

• Health care. AR technology assists medical professionals in surgeries, training, and patient care through visual overlays and data visualization.

• Gaming. Video game designers use AR to superimpose virtual objects and characters onto the real world (Pokémon Go is a prime example). This creates a new level of interactivity and immersiveness.

• Architecture and interior design. AR lets architects and designers project interactive building plans and interior designs, providing clients with in-depth access and information on a project.

• Education. Interactive AR can bolster lesson plans via the use of interactive visualizations, simulations, and virtual field trips.