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Leaning into its augmented reality features鈥攊dentified in the study as the most effective ad format鈥攁nd pursuing Gen Z audiences could prove valuable.

AI and AR shopping tools face consumer hesitancy. Despite significant industry investment in AI and AR shopping technology, consumer adoption remains stubbornly low. Shoppers show a clear preference for traditional methods like size guides and physical returns over newer tech solutions.

We forecast 90.0 million people will use AR in the US this year, interacting with it in ways that increase retail sales and advertising engagements.

Snap鈥檚 user and creator data could help train OpenAI鈥檚 models and build out its AR and commerce capabilities. Additionally, Snapchat is one of the few social networks expected to lose users this year, potentially making it an attractive acquisition target at a lower valuation. Prediction: Paramount will divest from some cable assets.

Meta AI鈥檚 voice assistant could power voice-activated B2B sales or retail tools, while its AR capabilities could open the door to immersive sales demos and brand experiences. Facial recognition could increase the volume and detail of user data available to Meta and brands and fuel deeper analytics and personalization.

AI and AR technologies are unlocking new competitive advantages in online shopping. AI-powered personalization and AR-enabled try-ons are improving user experience and reducing return rates, while genAI is revolutionizing fashion design and marketing. Underserved demographics represent significant untapped growth potential.

Snap鈥檚 focus on SMBs and augmented reality (AR) is paying off. Snap鈥檚 Q4 revenues rose 14% YoY to $1.56 billion, driven by a 9% increase in daily active users. The company鈥檚 AR and creator partnerships are attracting advertisers and users. While Snap is making gains in sports-related advertising, maintaining ad revenue growth depends on proving long-term ROI to brands.

Some 80% of brands using AR report higher sales and better customer acquisition, according to Snap Inc. AR smart glasses could further boost this trend by helping shoppers combine digital information with physical store experiences. However, widespread adoption hinges on addressing privacy concerns and social acceptance factors.

A wave of AI-powered AR glasses dominated CES 2025, showcasing more wearable designs meant for everyday use. XREAL's One Pro offers a 57-degree field of view in sunglasses-style frames, while Rokid's AR Spatial uses Sony鈥檚 micro-OLED technology to project a virtual display that appears equivalent to a 300-inch screen floating in one鈥檚 field of view.

Snap aims to highlight the experimental features available on Snapchat+ and leverage its leadership in AI and augmented reality through the McDonald鈥檚 partnership, which could help the company attract more users鈥攁nd in turn, more ad dollars. Our take: Snapchat鈥檚 decision to collaborate with McDonald鈥檚 shows its evolving strategy to bolster user monetization through premium subscriptions.

Go further: Read our report on Smart Glasses and Digital Natives Fuel AR/VR Market Evolution. This content is part of 蘑菇AV鈥檚 subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports.

The news: Samsung confirmed it will launch a new XR (extended reality) device in the second half of 2025, likely the long-teased Project Moohan, a device capable of augmented reality (AR) and virtual reality (VR), developed in collaboration with Google and powered by Android XR, per TechRadar.

Effect House by TikTok rolls out: As TikTok broadens its AR horizon, creator incentives play a pivotal role in its evolving digital strategy.

Snapchat must leverage its augmented reality capabilities. The platform pioneered AR for consumers at scale, and proving its value to advertisers will require it to highlight this advantage against competitors that haven鈥檛 matched its technical expertise or user adoption in this area.

A large developer ecosystem and years of dabbling in augmented reality (AR) and mixed reality (MR) on iPhones and iPads provide fertile ground for an expansive app ecosystem for future wearables. Key stat: 52.6% of US parents with children under 18 and 45% of urbanites are interested in buying smart glasses in the next 12 months, per an 蘑菇AV survey.

Walmart鈥檚 adaptive retail strategy is heavy on genAI, AR: The retailer is relying on the technologies to deliver personalized experiences, engage Gen Z, and improve customer service.

Snap introduces new AR glasses and creator tools: Updates include a unified entertainment feed and simplified app experience, positioning Snap to compete with TikTok and Meta.

Microsoft鈥檚 decision reflects declining interest in heavy headsets, with next-gen AR glasses setting the stage for wearable tech鈥檚 future.

Jiang said the feature uses AI and AR to detect facial features and show how frames look from different angles as users move their heads.

The number of AR users will surpass 100 million next year and reach 116.0 million in 2028, per our forecast.

There are 3.60 billion people around the world who have phones capable of delivering AR, and 1.06 billion already use mobile AR, according to a March 2023 report from ARtillery Intelligence.

There will be 90.0 million monthly users of augmented reality (AR) in the US this year, a figure that, despite decelerating growth, will cross the 100 million mark in 2025, according to our forecast. Virtual reality (VR) will hit 68.9 million users this year, though growth has also tapered off.