Ten years ago, the traditional mall could thrive on a few popular department store anchors and a couple of dozen boutiques, but today shoppers require more of an experience to get them into physical stores. Augmented reality use is a big part of that.

Retail benefited from the Pokémon Go phenomenon that took the world by storm earlier this year, and experts say that is only the beginning.

In a recent report, Interactions Daymon—an experiential retail marketing firm in San Diego— dissected how retailers are using augmented reality to interact with consumers and how consumers are responding to the technology.

“AR helps retailers converge the physical experiences with digital content,” Daymon Worldwide (parent company of Interactions Daymon) global head of IT Rekha Ramesh tells Bisnow.

Rekha said augmented reality is being used in e-commerce platforms, smartphones, tablets, touchscreen digital signage, virtual mirrors and wearable devices.

Augmented reality investments are expected to exceed $150B by 2020, according to the firm, and after surveying more than 1,000 shoppers, Millennials and females were found to be the dominant users of AR. Of those surveyed, 58% of female shoppers use AR habitually, compared to 42% of men.

Furniture and fashion retailers are the main segments embracing AR tech, and shoppers have taken notice—60% of consumers use AR to shop for furniture, and 55% use the tech when shopping for clothing.

IKEA, for example, allows shoppers to browse through catalogs and scan images of products they like to see how a product will fit into the shopper's environment. Southern California furniture store Jerome’s AR tech allows customers to place true-to-size desks, dining sets and beds in their own home, allowing up to three items to be placed around a room simultaneously, Rekha tells us. Many fashion retailers, including Macy’s, UniQlo and Chanel, are introducing magic mirrors to customers, allowing them to virtually try on clothing without physically putting anything on.

“Fashion and furniture are two areas where both the retailers and the consumers are adopting AR faster than other segments,” Rekha says. “However, there are challenges in every aspect of AR including hardware components, 3D capabilities, new applications, connected services and more.”

Rekha says one of the big challenges keeping retailers from adopting AR is the rendering of digital data into meaningful graphics and scaling it to fit the visual field.

“For mobile phones and tablets, AR must work with limited processing power, limited memory and limited storage,” she says. “The weight, size and power requirements of optical components can be expected to continue to improve.”

Tailoring content to fit the user is also critical for adoption, Rekha tells us. “Authoring this content is complex…[and] there are tools which are emerging to make AR technology accessible to more developers.”