What it means
Augmented reality technologies stream relevant data to users to increase their awareness and knowledge of their surroundings. While relatively new to marketing, augmented reality has existed for decades. Fighter jets have employed heads-up displays in cockpits since the Cold War. A Boeing researcher coined the term in the early 1990s to describe a system that assisted workers who were assembling jumbo jets. These days, it’s nearly impossible to watch a televised sporting event without witnessing some type of augmented reality, from the yellow first-down line on NFL broadcasts to trajectory trackers in golf and baseball. Augmented reality applications are being developed and used in shopping, education, healthcare, machine repair, advanced navigation and more.
Why it’s important
Smartphones have ushered in a new era for augmented reality. Now in the hands of more than 1 billion people around the globe, these handheld computers feature GPS, accelerometers, compasses, gyroscopes and HD cameras that enable users to film their surroundings while communicating exact location and orientation. From there, it’s a relatively simple matter to enhance the display with contextual information. Early attempts to use augmented reality on mobile devices have ranged from the purely entertaining to the highly informative. In the first category, a Johnson & Johnson app triggers a video of Kermit playing the banjo when a smartphone is pointed at a box of Muppet-themed Magic Vision Band-Aids.1 Yelp’s augmented reality app, Monocle, on the other hand, presents users with reviews when they aim their phones at a nearby restaurant or storefront—no typing required. IBM has created an experimental shopping app2 that can scan store shelves and quickly identify products that fit a customer’s preferences, for example, which brands of sunblock are hypoallergenic, against animal testing and on sale. Juniper Research foresees a bright future for mobile augmented reality, predicting that more than 2.5 billion augmented reality apps will be downloaded by 2017.3
Businesses have a lot to gain, too. To gain, or even maintain, market share, companies need to connect with customers and potential customers in a way that will make their products or services a valuable part of people’s lives, rather than just a one-time purchase or use. By adding a digital context to physical world experiences, augmented reality allows companies to collect the customer data they need to know these people as individuals, and in turn, to know what they can do to capture a person’s attention and loyalty. Augmented reality can help a company develop that system of engagement that keeps someone coming back over and over, and sharing their positive experiences with their friends and family.
What will change
Currently, augmented reality primarily provides information and entertains early adopters. But it’s already demonstrating the power to disrupt business. Because it merges the physical and digital, augmented reality transcends any older notions we had of them as distinct channels. And whether it is in the retail store, vendor conference or during supplier negotiations, it’s getting more and more difficult to orchestrate a captive experience because . customers and business partners are bringing all of their data and social networks from the digital world into the physical to help them make decisions. For instance, online retailing giant Amazon.com uses augmented reality to grab customers from offline competitors. Its Price Check app enables consumers to snap a photo of a product in a brick and mortar store and quickly buy it at a lower price online. Creative retailers can likewise use augmented reality apps to accentuate their own advantages and fight back. How many times have you entered a store wishing it were as navigable and transparent as an online shopping experience? What if you stopped to look at a menu outside of a restaurant and your eyeglasses automatically displayed a list of times there were tables available over the next few hours? A few years ago, this would have sounded like science fiction, but not anymore. Already, social media companies such as Foursquare or Groupon4 are experimenting with sending offers to consumers based upon their location and Google is introducing Google Glass, augmented reality-enhanced eyewear. Soon, seamless, location-based marketing, informed by all manner of contextual data, will be possible.
There are one billion smartphones in use around the world now. Another 2.3 billion will be sold by 2018, according to Swedish mobile equipment-maker Ericsson.5 The widespread adoption of such powerful, mobile devices represents an incredible opportunity for creative marketers and advertisers to offer augmented reality-enhanced apps, games, catalogs and advertising. Augmented reality is already helping bridge the digital and the physical realms and promises to have an increasingly profound effect on how people shop, learn, travel and experience the world.
Key questions to ask
- How could augmented reality improve our existing product offerings and/or increase customer engagement?
- What new promotions or services are possible with augmented reality?
- Do we have the skills in house to carry out an augmented reality project?
- What will our existing customers do if we do not create our own augmented reality application?
- What could our competitors do with augmented reality?
- Could new competitors emerge based on an augmented reality play?
1Muppet-themed Magic Vision Band-Aids
2How to Save Brick and Mortar Retailing (A Smarter Planet Blog)
3Over 2.5 billion Mobile Augmented Reality Apps to Be Installed Per Annum by 2017 (Juniper Research)
4Groupon Now to Offer Location-Based Deals (Daily Finance)
5Ericsson Mobility Report on the Pulse of the Networked Society