If there is one common takeaway most businesses have gained from the current Pandemic crisis, TECHNOLOGY has to be a core component of their infrastructure. It’s imperative for every organization to be digital & transforming businesses to be future-ready. From having a simple website presence or having an app from small business to enabling superior customer experience through Artificial Intelligence and immersive technologies, enterprises are going out, learning & adopting with new zeal.
Technologies that have emerged as valuable in delivering unique experiences or solving real business problems are these immersive technologies Extended Reality (XR), Augmented Reality (AR), and Virtual Reality (VR). Part of what’s spurring the quick adoption of AR/ VR is the impending arrival of 5G, the quick percolation of edge computing, and the arrival of powerful computing devices to market.
From automotive to travel, from construction to retail and engineering to marketing and more, AR and VR have shown extensive application value. Perhaps because of this wide scope of application possibilities, the International Data Corporation (IDC) predicts that a 5-year CAGR in spending for AR/VR will be at 76.9 percent globally between 2019 and 2024, to touch a little over $136 billion by 2024.
Effortless AR and VR Integration in the Automotive Industry: A Standout Example
Let’s look at how companies are using AR and VR in the automotive industry. Several manufacturers like Ford use the technologies to develop their automobile design mockups before taking it to production. This virtual prototyping helps improve vehicle design, detect preventable late design errors, and modify issues that would otherwise cost the manufacturer additional time and money.
Ford has created a virtual studio where design leads can run vehicle development and inspection amid shelter-in-place mandates. Prior to COVID-19 related restrictions being enforced, the team would use VR tools to assess design vehicle elements, identify issues that could be resolved in 3D, and subsequently develop full-size models. According to SEAT, using VR has helped shave off 30 percent of the time it would take for prototype production. Like Hyundai, others are spearheading innovation through AR-enabled head-up display (HUD) – that’s among the first Holographic AR Navigation Systems in the world.
We see VR-enabled showrooms like those by Audi and Jaguar Land Rover offering simulated test-drives and AR and VR-based customization experiences on the consumer-facing side. And that’s why it is unsurprising that a 2019 Nielsen study revealed that AR and VR are the two technologies that customers anticipate helping them with their daily lives. Another report, AR in Retail, showed that 40 percent had expressed a willingness to spend more for a product compatible with AR. This general open-mindedness of customers is one of the factors driving businesses to adopt AR and VR. A report by Deloitte shows that AR is in use at around 88 percent of mid-market companies.
How AR and VR are Adding Value to Businesses Across Industries:
• Training: AR and VR can be instrumental in offering new staff members training, especially in high-risk industries like manufacturing. Staff can get trained and gain experience with new devices and tools without getting exposed to tough situations before they are ready.
• Customer Support: In situations where customers need help with repairing a product, companies can offer support through AR and VR applications that provide visual guidance or walk-throughs to problem resolution.
• Knowledge Sharing: One of the biggest challenges’ factories face is downtime. This is preventable in some cases with AR. If new workers are unable to troubleshoot a situation, they can seek assistance from experienced workers even remotely. Unilever has seen a 50 percent drop in downtime with AR. And interestingly, it gained a direct return on investment (RoI) of 1717 percent relative to spend on remote AR.
• Setting Customer Expectations: With AR and VR, retailers and brands can create near-realistic experiences that can set realistic expectations. This will help reduce post-purchase dissatisfaction among customers. BMW has created an AR app that does just this – allowing customers to browse car models from home. In the travel and hospitality industry, hotels like Hyatt Regency are using VR to give customers a realistic idea of what they can expect on their property.
AR and VR are uniquely positioned to help businesses overcome challenges and tap into growth opportunities. And it is no different in retail.
The Value of AR and VR in Retail
The retail industry, which, according to the US Retail Index Report by IBM, has seen a speedup of its transition to digital shopping by five years, is no stranger to the use of AR and VR. One of the first instances of AR and VR in retail was to allow customers to try before they buy. Many times, post-purchase returns and exchanges can be quite daunting. Because of this, customers may not even venture into purchasing if they are uncertain. This challenge was augmented amid the pandemic where retailers could just not keep their stores open, let alone offer the ‘try before buying’ option.
Integrating AR into the ecosystem has helped a few brands overcome this obstacle. Ultarecently did this. Previously, a significant percentage of their customers purchased products after trying out in-store and opting for the ones that best suited them. The beauty brand now offers virtual trials that customers can avail from their homes’ safety through its tool GLAM Lab. The brand has seen a 7x increase in engagement and close to 50 million foundation shades trialed since the beginning of COVID-19. Another similar instance is that of L’Oreal’s Make Up Genius bar.
It’s not just beauty brands offering virtual AR and VR based trials to customers. Swarovski’s Atelier Home Décor line does just this. Apple recently brought in an update to its Quick Look AR tool to enable a direct checkout option. Nielsen’s observation is that this pandemic has been an ‘unexpected catalyst’ for the uptake of AR and VR in retail.
Visualization Can Help Avoid Missing Growth Opportunities Today and, in the Future,
Though several companies had embarked on their own digitization journeys pre-COVID-19, one key facet of digitization was missing from their plan - visualization. Retailers and brands can bridge this gap with AR & VR. What will further fuel the uptake? Work-from-home (WFH) demands, virtual socializing needs, contactless processes on the customer front, and reduced budgets and pauses on advertising on the business side.
Another factor is the devices’ ability to provide a safe and hygienic way of socializing. Looking ahead to a time when shoppers are back in store aisles, retailers can use AR to ensure that their customers quickly find what they are looking for while reducing exposure and maintaining social distancing norms. Though many nations have emerged (rather cautiously) from their shelter-in-place mandate, people are still skeptical about venturing into crowded spaces like malls and shopping centers. Through AR and VR, people can visit stores, interact with other shoppers, and experience part of the thrill of making a purchase virtually.
Retailers can take inspiration from what Lowe did a couple of years ago. When the retailer understood that almost $70 billion was being missed in abandoned carts because customers were unable to find specific products for home improvement projects, they turned to AR. Their AR-enabled app allowed customers to quickly and efficiently find what they were looking for by simply directing them through the store. To make the shopping experience more complete, they can even offer virtual shopping consultants. All these instances of AR and VR utility in retail and other industries show just how pervasive the two technologies can be while bringing in unprecedented benefits and value to businesses.