Augmented Reality – How businesses can make the most out of this opportunity.

From Terminator to Iron Man, movies have kindled our interest in technologies like Augmented Reality for many years. While storytellers have used their imagination to show us an augmented world-view and implications of such technologies, many of that imaginary stuff which may have looked too advanced for the real world, have today become a reality.For instance, in the movie Avatar, a big virtual map that shows the Na’vi’s tree, can be an extended version of how industries like retail or airlines are augmenting customers’ view while helping them navigating in a store or airport, or banks using the technology to give information about nearby ATMs, so on and so forth.

The combined market of AR and VR is expected to reach $108 billion by 2020 and AR will contribute almost 75 percent to this value. In fact, by 2022 the AR market is projected to reach $117 billion. One of the primary reasons for these bullish projections is the ease with which businesses can implement this technology. While Virtual Reality (VR) requires a hardware device to create a virtual world for the user, Augmented Reality (AR) can augment the users’ real world view by overlaying virtual elements in real-world scenario through a smartphone. To implement AR, all that businesses need is an engaging story which can be communicated through an AR-based app.

Why Augmented Reality is an opportunity businesses should not miss?

Here are few reasons why businesses must consider including AR in their digital strategies:

• The era of communication which aimed at ‘talking at’ customer has changed to ‘talking to’ them. The significant spenders – the Millenials and the Gen-Z are no longer interested in a monologue from brands; they are interested in conversational stories. Augmented Reality opens the door for such conversations.

• Today’s consumer is short of attention and time. Most of the information that a human brain gets is through the visual medium. AR helps brands catch their attention in the shortest possible time, in the smartest possible way – that is visual.

• Social media apps like Snapchat, Instagram etc. have already accustomed today’s customers with the concept of AR through various filters. Thus the initial inertia towards trying out the technology is minimal. Also, the interest today’s consumers have shown in the AR-based features serve as an already established successful proof of concept for businesses, if used judicially.

The growing interest of consumers in the technology and implications of businesses can be gauged by this study that found that – 55% of customers believe that if an app or retail store has augmented or virtual reality features, it will influence their buying decision in a positive manner

The progression of Augmented Reality from a hype, to a technology that drives business:

Brands have been excited about the immense opportunities that technologies like AR and VR present for quite a few years now. However, Augmented Reality has gained much of the interest and investments of businesses in the last few years. Precisely why, this year’s CES saw brands showcasing AR, not merely as a vanity technology, but as a technology that can drive results, with minimum budgets. In fact, one of the products showcased in this year’s CES was a flat-pack kit that promises to deliver a taste of AR at a budget price.

In the coming year, it is expected that AR will become a part of people’s daily lives way more than it is now. This probably is the reason that technology giants are developing tools to make the development of AR-based apps easier for businesses. Apple’s new iOS 11 mobile operating system with the ARKit toolkit for AR app developers, as well as Google’s new ARCore; are indications of the growing attention of the industry towards AR.

An important factor that has to lead to this shift can be attributed to the enormous success of Pokémon Go in 2016.

The AR-based game, opened up the vast horizon of the technology for businesses to connect with their customers. The success of the game was phenomenal, unlike any other technology has witnessed. For instance: within a week after it launched, the game had 28.5 million daily unique users in the U.S. alone. It commanded 33 minutes and 25 seconds of a users’ time, surpassing the time spent by them on Facebook (22 minutes), Snapchat (18 minutes) or Twitter (17 minutes). The game also generated $1.6 million of daily revenue.

According to Peter Warman, CEO of the market intelligence firm Newzoo,

“Pokémon Go has opened our eyes in many ways; it has proven beyond a doubt that AR can be applied in ways that appeal to a mass audience. Equally important from a business perspective, it has given Niantic investor Google enormous insight and data that it can incorporate into its location-based advertising and services strategy.”

The game not only generated massive user engagement, but it also opened the doors for businesses to use AR in innovative ways. E.g. retail stores were the first ones to tap into this opportunity. Customers who went inside to spot a Pokémon were turned from casual shoppers to customers; with offers and discounts visible on the app where the Pokémon was spotted. Further, it also led to the emergence of smart retail and a new set of technology players in the retail industry like onthespot who can maximise technological interaction, applying different products and services to digitize physical spaces.

‘’The app’s success has turbocharged attention on AR and may give CIOs and business leaders cause to explore its potential for business purposes.’’ Brian Blau, Research Vice President at Gartner.

Today, industries across the globe are applying AR in far more consequential ways in both consumer and business-to-business settings. For example:

• AR “heads-up” displays that put navigation, collision warning and other information directly in drivers’ line of sight are now available in a lot of car models.

• Wearable AR devices for factory workers that superimpose production-assembly or service instructions are being used in industries like construction and manufacturing.

• For industrial facilities, manufacturing managers can use AR apps to see how a new piece of equipment might fit into their workflow: the new assembly or manufacturing process can also be visualized through the camera of a phone or tablet while the manager walks through the existing plant.

• GE has already tested the use of voice commands in AR experiences that enables factory workers to perform complex wiring processes in wind turbines—and has achieved a 34% increase in productivity.

Augmented Reality is also helping in augmenting customer experiences across industries. Some of the interesting ways brands are doing that are:

• Ford and Audi are allowing users to preview cars with AR apps, without having to wait for an actual test ride.

• Retail stores like House of Fraser are using AR tech to let consumers scan shoppable windows.

• Brands like IKEA and WayfairView, use AR to help prospective buyers to visualize how their homes will look with a variety of different furniture pieces before they make a purchase decision.

• Many banks are helping customers locate the nearest ATMs from their location using an AR-based app.

In our earlier article, we have detailed out how AR is being used across various industries like Healthcare, Retail, Education etc. Read it here.

How businesses can prepare for the Augmented Reality opportunity:

While the scope for businesses to leverage AR seems promising, how the technology finally impacts businesses and how much of it will consumers accept depends on the confluence of a lot of factors. Some such factors are the reliance of the technology on advancing smartphones with depth-sensing cameras, the kind of AR content that is being offered and eventually where the technology lies in the adoption cycle for the brands’ consumers.

Another major factor which impacts the AR industry right now is the shift of the industry from a marker-based to a marker-less technology. Marker-based AR utilizes a visual cue or marker to track the visuals around them. Whereas markerless AR that is based on GPS location and often on the smartphones’ velocity meter, digital compass, and accelerometer when displaying content.

Industry experts believe that transition to more marker-less AR and less marker-based AR would be better for the overall user experience and reputation of AR. Though marker-less AR often has a downside when it comes to accurate representation of space. However, as the smartphones advance with better depth-sensing capabilities, this drawback of the technology will also be taken care of.

Like any other technology, it will require a well-thought-of strategy for businesses to leverage the AR opportunity. Here are few questions that business leaders should answer while defining a roadmap for their AR strategy:

1) Is the industry they operate in ready for the AR technology, more importantly, does the consumer need it?

Many businesses are jumping into the AR boat responding to the hype. However, it is important that they carefully think through the value it will bring to their business and most importantly to their customers. Of course, innovators will experiment with the technology, and will also benefit from the competitive advantage. But is an enterprise ready to take the plunge or wait and see the market adoption and ROI will depend on their business objectives.

2) How will AR help the business in creating differentiation?

Enterprises aiming to leverage the AR opportunity will have to define in which area of their business do they want to implement it. Also, how will it give them an advantage; whether in increasing operational efficiencies, creating valuable product experiences or engaging brand communication? So far businesses have forayed mainly into the technology with a lens of advertising. AR helps brands progress from conversational brand communication to experiential brand conversations. However, business across segments have used AR in innovative ways beyond that. It becomes important to define where AR fits and how it can help in gaining competitive advantage.

3) Should they build organisational AR capabilities or outsource?

There are three aspects of building an engaging AR experience:

-Presenting 3-D digital information in a manner that is easy for consumers to absorb.
-Creating the right content.
-Digital modelling capabilities and the know-how of implementing that in AR applications.

The AR technology is at a nascent stage and the talent pool skilled in all of the above is short in supply. That leaves businesses with a question whether they should outsource their AR capabilities? In the early years of the technology a lot of organisations build their own AR capabilities, but given the prolific growth of the industry, best-of-breed AR vendors have emerged.

However, a lot of companies are also trying to build AR capabilities as a strategic asset. Concluding whether to outsource or build capabilities internally will depend on a lot of factors like the competitive landscape, time and cost investments etc.

How businesses can build an Augmented Reality implementation roadmap:

Once the enterprises have definitive answers to the questions mentioned above, they will have to devise a plan that will not just meet their short-term goals of leveraging AR but also help them build capabilities for the future. While doing so, it will be critical for them to consider both organisational and technical challenges.

Here is how enterprises can work towards building a future-proof AR implementation plan:

1) Defining the development capabilities they would require

AR applications can be divided into three categories based on its functions, and that would determine the nature of the complexity that will be required to build the apps.

-Applications that allow people to visualise products in a different context:

The IKEA or the Wayfair apps we mentioned earlier will fall into this category, which helps users visualise products in their home settings using a mobile app. Such apps are fairly easy to develop and also promote to consumers.

-Applications that serve as instruction manual:

Many industries like manufacturing use AR based apps to improve their operational capabilities such as providing real-time, on-site, step-by-step visual guidance on tasks such as product assembly, machine operation, and warehouse picking. One such example would be Newport News Shipbuilding, a company that designs and builds U.S. Navy aircraft carriers, which uses AR to inspect a ship. With AR, they can see the final design superimposed on the ship, which reduces inspection time by 96%—from 36 hours to just 90 minutes.

Such apps would be more complex to develop since they would need AR content that is dynamic. Further, in such cases, hardware options like head-mounted displays or smart glasses will also be required, which are still in early stages of development.

-Interactive apps:

AR apps that are built to be interactive in nature using other technologies like voice and gesture recognition are quite complex. They would require a perfect amalgamation of AR and other technologies like AI, and all of this needs to work seamlessly in tandem.

Once enterprises define the objective of their AR strategies, they would need to decide on the kind of app they would need and thus build capabilities and invest accordingly.

2) Building digital content as per their business context

Depending on the business context every AR app will need to have digital content in place. In cases of simple apps, where the apps are designed to showcase pre-existing and static content like product catalogue or an augmented menu card in the restaurant, are easier to build. However, creating a dynamic experience needs specialised expertise. For instance, building an AR app that will assist operators with machine repairs will require highly detailed product representations and also tap into real-time data streams from various sources like other enterprise software, smart-connected devices or external data sources.

To build content capabilities enterprises will need to understand the kind of content they have and how they can accentuate it through AR or do they to need to build something from scratch. They will also need to define if their content needs to merge with any other external software and then define how the system will work together. Most importantly they will have to make sure that the content developed fits well with their business context and consumers’ need.

If the AR app isn’t thought through for customers, the tool will probably be going to serve only the purpose of being a marketing gimmick, which consumers will use and then forget. Likewise, if the AR tool simply shows information at random as operators are walking through a manufacturing unit, they will soon ignore it and go back to their routine way of working.

“Based on research I have been conducting on consumer responses to AR over the past four years, I have found that designing and implementing valuable AR apps requires the following: a better idea of how consumers would use such technology; more collaboration among computer scientists, designers, and marketers; and a strategy for integrating the applications into the existing consumer journey.” Ana Javornik on Harvard Business Review

3) Understanding and planning for the physical environment the end user will interact with the AR app

It is important for the AR technology to understand the physical environment of the user to superimpose the augmented elements. Based on how the AR app is determining the physical environment the user is, the AR experiences can be differentiated into unregistered and registered AR experiences.

In unregistered experiences, the device will detect the location of the device using the GPS and show relevant information about the place. For instance, if the user is looking at a retail store, the application can show relevant information about the place. These kind of experiences are simpler to create.

In registered experiences, the application will use various objects from the users’ physical environment to augment the experience. The simpler version of such experience would be scanning of a barcode or QR code to see information about a product. In a sophisticated form, the technology will use a catalogue of the 3-D model to recognise an object by comparing them. While these are all marker-based experiences, advancements in shape-recognition technology are helping in creating more marker-less experiences.

Enterprises will have to think through the environment in which they want their consumers to interact with their AR apps, the limitations and the challenges associated with it and thus build capabilities accordingly.

4) The kind of model the AR app will be based on

AR technology has got enough spotlight only recently. Thus, most experiences that are built are quite simple and have been delivered using apps with complete content. The advantage of these apps is that they offer high-resolution experiences without the requirement of an internet connection at the users’ end. The downside is that these experiences once created can’t be modified easily; any change to the physical environment will need the complete app to be rewritten.

As the technology progresses, there are other alternatives emerging to deal with such bottlenecks. One such alternative is the use of commercial AR-publishing software to create AR apps which can be hosted in the cloud. The AR experience can then be downloaded on demand using a general-purpose app running on an AR device. This kind of model is known as a content publishing model. As AR enterprises start creating more interactive AR experiences the content publishing model will become more common.

Conclusion

The technology landscape is shifting faster than ever. Augmented Reality is going to be an important capability for enterprises to keep up with the competitive space. While today most AR experiences are delivered via smartphones, as more companies adopt the technology delivery will shift to hands-free wearables. The future of AR is wide open. As the adjoining technologies like smartphones with better depth sensors, hardware, wearables etc. evolve we will see businesses integrating AR more holistically, creating much more meaningful experiences for consumers.