Augmented reality technology in retail works by overlaying digital information onto the physical world, enhancing customer experiences. By using devices like smartphones or AR glasses, consumers can visualize products in their own environments before making a purchase. Retailers leverage AR for virtual try-ons, allowing customers to see how clothing or accessories look without physical trials. This technology also facilitates interactive displays, improving engagement and informing purchasing decisions. Ultimately, augmented reality can lead to higher sales and customer satisfaction.