An idea first explored 100 years ago in Frank Baum’s short story ‘The Master Key,’ Augmented Reality (AR) and Virtual Reality (VR) today are a USD 12 Billion market. A Goldman Sachs report estimates that it will soar to USD 80 Billion by 2025. Though the two forms are collectively referred to as a single industry, it’s VR, which takes the user into an alternate reality, that currently rules the market with a dominant 75 percent share of usage. This is largely due to the fact that AR, which enhances the existing reality, requires more advanced technology. As this barrier is overcome in the near future, AR is expected to take the lead.
The excitement generated by this technology, and its ability to change the way we experience the world, is already being felt in multiple markets, including video gaming, live events, video entertainment, healthcare, retail, real estate, education, military services and engineering. As companies deploy AR and VR to offer customers an enhanced experience with products and services, the impact of this technology on customer purchase is significant.
Enhancing Reach, Simplifying Processes
AR / VR has an impact at various stages of the customer purchase journey. It boosts customer recall and brand awareness enormously when integrated into marketing campaigns. It enhances the evaluation experience, escalating the purchase intention into a sale. Intelligent deployment of AR / VR eases the process of purchase and future customer support, leading to increased customer loyalty.
It is estimated that by 2025, 60 percent of the usage of AR / VR will be focused on consumers, and the remaining 40 percent on enterprise and the public sector.
Some companies have begun deploying AR / VR in internal communications, training and technology development. Communication delivered through AR / VR creates a sense of excitement and is more impactful. When new employees are inducted and trained in workplace operations virtually, it creates a more collaborative experience. Complex activities in a store, manufacturing facility or warehouse are easier to explain through AR / VR. Immersive experiences offered to customers during the product design and development phase help companies glean valuable insights.
Challenges and Looking Ahead
While technology mavens and markets, inspired by the potential of AR / VR, are projecting high revenues for the industry, there is no denying that there are some roadblocks to overcome. The hardware is expensive, and currently contributes to more than 50 percent of the revenue generated by the industry, though this cost is expected to reduce as the industry matures. AR / VR compatible content is in short supply, and there is an urgent need to invest in content development. AR / VR devices are also known to cause cybersickness and physical fatigue, which calls for technological advancements that improve the experience.
Forward-looking companies are already charting out their path to growth. After evaluating the return on investment against the impact on customer experience, companies that choose to adopt AR / VR are associating with delivery partners who have both domain and technical expertise. While a company can map the customer journey and identify potential immersive experiences using AR / VR, only experts can, with the right content and hardware, offer experiences that deliver high customer satisfaction and revenue.