Augmented reality (AR), the lesser known cousin to virtual reality (VR) that became famous – or infamous – for creating Pokemon Go zombies, is rapidly expanding into business applications.
According to Business News Daily, “What started mainly as technology for gaming companies is spreading into software, wearables, education, healthcare, retail, the U.S. military and elsewhere. Virtual and augmented reality have come into their own and are responsible for some of the most fascinating advancements in modern technology.”
Virtual and augmented reality are labeled "XR," short for extended reality. Experts report the combined XR market is soaring, from about $6.1 billion in 2016 to an anticipated $215 billion by 2021 (Statista).
Virtual Reality vs. Augmented Reality
So what is AR? Virtual reality and augmented reality are often used synonymously. However, there is a big difference between the two, especially when considering their business applications. With virtual reality, people are in a completely artificial digital environment. Augmented reality overlays virtual objects onto a real-world environment.
In an excerpt in Forbes, software development consultant Julia Tokareva explains, “In augmented reality, users see and interact with the real world while digital content is added to it. If this sounds unclear think of Pokemon Go – millions of people all over the world have been rushing with their smartphones in search for small virtual creatures. That’s the most vivid example of augmented reality.”
For the casual consumer, AR can be demonstrated on a smartphone, through an AR app, or with a special AR headset, such as Google Glass. Business applications are just starting to catch up, but are gaining ground quickly.
For retail, AR allows customers to interact with products without stepping outside their door. According to Tokareva, “AR provides a possibility of virtual try-ons without going to the shop. Your consumers can try on many different items with AR: glasses, shoes, clothing, jewelry, watches, without leaving their homes. This makes AR ads a powerful tool for driving sales and increasing revenue.”
To enhance the car buying experience, Business News Daily cites AR applications where users can experience a virtual vehicle right in their driveway. “This allows customers to get a feel for the vehicle by walking around it, opening doors and looking inside as if they were on a showroom floor,” the article notes.
Augmented reality can make consumers “feel like they’re playing an engaging video game,” Tokareva concludes. “This builds an emotional connection, increasing brand awareness and encouraging customers to make purchases.”
Gavin Finn, CEO and president of Kaon Interactive, seems to agree. In Entrepreneur, he explains that the technology can help connect with customers in several ways, including multi-sensory engagement, intellectual engagement and emotional connections.
“For every entrepreneur attempting to build a more engaging and lasting relationship with his or her company’s prospects and customers, AR and VR are important capabilities to include in planning how their current engagement strategies will evolve,” explains Finn.
Finn also predicts that these AR business apps will not necessarily need separate devices to operate. Instead, the people will just use devices they already have like phones and tablets. As an example, he points to Google and Apple, which have released or announced platforms that allow software developers to build AR applications and capabilities for Android and iOS.
The challenge lies in creating compelling products and experiences that engage people and build loyalty to what AR is. To do that, explains Chris Nicholson, CEO of Skymind, an artificial intelligence development company, “businesses need access to more data.” He also notes, “gathering and storing this data, however, can be a challenge.”
As businesses gain an understanding of AR’s potential, the demand for AR solutions will go up and the market will respond with developers scurrying to create more AR business apps that can run on everyday devices like smartphones. Morgan Stanley predicts, “... AR promises to be the next killer app, extending the life of the smartphone market, accelerating upgrades and driving demand for new apps. All told, AR could add more than $400 billion in incremental sales for mobile devices and related services over the next three years.”