Bunnings Warehouse in Alexandria, Sydney, ran a quiet trial last month. Customers could open a smartphone app, point their camera at the store, and see AR directional arrows overlaid on the camera feed, guiding them to specific products.

No headset required. No special glasses. Just a phone and an app.

The trial ran for three weeks. Roughly 2,400 customers used the feature. And the results raise some genuinely interesting questions about where AR fits in physical retail.

How In-Store AR Navigation Works

The technical approach used in most retail AR navigation trials follows a similar pattern.

The store is pre-mapped using LiDAR scanning or photogrammetry, creating a detailed 3D model of the space including aisle layouts, shelf positions, and fixture locations. This map is stored in the app.

When a customer opens the app and activates AR mode, the phone’s camera and sensors determine the user’s position and orientation within the pre-mapped space. Using Apple’s ARKit or Google’s ARCore frameworks, the app overlays navigation cues—arrows, highlighted paths, or product location markers—onto the camera feed in real time.

The customer searches for a product (“BBQ tongs”), the app identifies the aisle and shelf location, and AR arrows guide them through the store.

It works. The technical problem of indoor AR navigation in large retail environments has been essentially solved. The question is whether it solves a problem customers actually have.

What the Trials Show

Beyond the Bunnings trial, at least two other Australian retailers have tested or are currently testing AR in-store navigation. Woolworths ran a limited trial in a Melbourne supermarket in late 2025, and a major Australian hardware retailer (which hasn’t publicly announced its trial) is currently testing in three stores.

The consistent findings across these trials:

Usage skews toward unfamiliar shoppers. Regular customers who know the store layout rarely use AR navigation. First-time visitors, tourists, and customers at stores they visit infrequently are the primary users. This makes intuitive sense—you don’t need navigation in a store you visit weekly.

Product search is more valued than route guidance. Customers care more about “where is this product?” than “how do I get there?” The AR arrows are nice, but the real value is the search function that identifies which aisle and shelf position holds a specific item. Several trial participants said they’d use a text-based product locator without the AR component.

Dwell time increases. Customers using AR navigation spend 15-20% more time in store compared to non-users. This could reflect the novelty factor, or it could indicate that better navigation encourages exploration. Retailers naturally like increased dwell time because it correlates with higher spend, though the causation isn’t established from these small trials.

Technical friction limits adoption. Downloading an app, granting camera permissions, and holding up a phone while navigating a store is more friction than many shoppers will tolerate. The Bunnings trial saw 2,400 users from an estimated 45,000 store visitors during the trial period—about 5% adoption.

The Business Case Problem

Retail AR navigation faces a fundamental business case challenge: the people who need it most—infrequent visitors—are the hardest to get to download a store-specific app.

Frequent shoppers know the store and don’t need navigation. Infrequent shoppers need navigation but won’t download an app for a store they rarely visit.

Several potential solutions are being explored. Google’s Live View feature, which provides AR walking navigation outdoors, could theoretically extend to indoor retail spaces through Google Maps integration. This would eliminate the need for store-specific apps, but requires retailer participation in Google’s indoor mapping program.

Web-based AR—where navigation loads in a mobile browser without an app download—is technically feasible but currently limited in capability compared to native AR apps. As WebXR standards mature, browser-based retail AR could remove the app download barrier.

Smart glasses represent the longer-term vision. If shoppers were wearing lightweight AR glasses—something like the rumoured Apple glasses or Meta’s Orion project—in-store navigation could be ambient and hands-free. But consumer AR glasses at scale are still years away.

What Retailers Are Learning

Beyond navigation, these AR trials are teaching Australian retailers valuable lessons about spatial technology in physical retail.

Data collection. AR navigation apps generate detailed data about customer movement patterns within stores. Which aisles get visited? Where do customers hesitate? Which product categories drive the most navigation searches? This data is potentially more valuable than the navigation feature itself.

Planogram optimisation. When you can track how customers actually move through a store, you can optimise product placement based on real behaviour rather than assumptions. One retailer told us that navigation search data revealed their most-searched product category was in the least accessible area of the store—a layout problem they’d never identified through traditional methods.

AR as a platform, not a feature. Navigation is the entry point, but retailers are already thinking about additional AR overlays—product information, reviews, price comparisons, complementary product suggestions. Once customers are in an AR mode in-store, the opportunities to enrich the shopping experience multiply.

Where This Goes

In-store AR navigation probably won’t become a mass consumer behaviour in its current form. The app download barrier is too high, the phone-holding experience is too awkward, and the benefit over simply asking a staff member is too marginal for most shoppers.

But the underlying capability—mapping physical retail spaces and providing spatial information to customers—will find its format. Whether that’s through Google Maps integration, web-based AR, voice-guided navigation, or eventually smart glasses, the technology will mature into something more natural than holding up a phone in aisle seven.

For Australian retailers considering AR experiments, the advice from early trials is consistent: start small, focus on the data insights as much as the customer experience, and don’t expect mass adoption of phone-based AR navigation. The value is in what you learn, not in the navigation feature itself.

The early experiments are exactly that—experiments. But they’re generating insights that will shape how Australian retail uses spatial technology over the coming years.