April 6, 201810 min read
Authors: Emil Waszkowski - Head of Digital Consulting
Augmented Reality is, along with Artificial Intelligence, a technology bound to influence business the most in the coming years. Involvement of major companies, including FAMGA (Facebook, Apple, Microsoft, Google, Amazon), large amount of smartphones supporting AR and intensive work on new Augmented Reality devices to come — all those phenomena indicate that this technology is soon to reach mass business adaptation phase, which will mean tangible commercial benefits. Tim Cook, CEO of Apple probably gave the best summary, by saying: “I regard it as a big idea like the smartphone. I think AR is that big, it’s huge.”
This entry will allow you to learn about the current state of the AR market, about its potential, what businesses will be influenced by it the most, and discover solutions that will help bring great value added to your enterprise.
Disclaimer — this entry will not concern Virtual Reality (VR), because, Augmented Reality provides more value and practical applications. Furthermore, to simplify matters, we'll refer to Mixed Reality (MR) as AR, using the latter as a broader term.
Even though this article concerns Augmented Reality, we'll begin with a brief explanation of differences between AR and various related technologies:
If you want to learn more about differences between above technologies, we recommend reading this Quora article.
Augmented Reality technology is about to alter the market the most in the coming years. AR market development analyses confirm it, pointing to its dynamic progress. Zion Market Research predicts that AR's value will reach 133 billion dollars in 2023 with average growth rate of 85,2% during 2016 – 2023.
Current state of AR technology can be best described as so called “bridge product”. As Ben Evans from Andreessen Horowitz Fund explains — "A bridge product says 'of course x is the right way to do this, but the technology or market environment to deliver x is not available yet, or is too expensive, and so here is something that gives some of the same benefits but works now'."
Mobile AR exactly fits the bridge product category. It involves placing digital objects on real surroundings using a smartphone. Right now it's the most available and common application of AR technology, employed everyday in a form of filters by Instagram, Messenger or Snapchat users.
Support of major technological giants plays a large role in AR's popularisation. Apple and Google introduced developer toolkits that allow programmers to easily create Augmented Reality apps (Apple's ARKit and Google's ARCore). Let us not forget that AR can be also perceived by Google and Apple as yet another technology that increases app store downloads. Other companies may see it as a way of reaching 300 million users having ARKit and ARCore supporting smartphones in their possession.
OK, but what is the aforementioned “product x”? It doesn't exist yet. Prototypes like Microsoft HoloLens and other upcoming devices, like Magic Leap, are showing the way. Nonetheless, those aren't the machines we are waiting for. Final product is best described by Michael Abrash, chief scientist at Oculus: “We know what we really want: AR glasses (...) Instead of carrying stylish smartphones everywhere, we’ll be wearing stylish glasses (…) These glasses will offer AR, VR, and everything in between, and we’ll wear them all day and we’ll use them in every aspect of our lives.”
When will this product arrive? Internet giants representatives treat AR as a Fourth Platform (after PC, Internet and mobile). Until now dominant platform tended to change every 15 years. First iPhone premiered in 2007. If shift frequency will remain constant the device described by Michael Abrash should appear no sooner than 2022.
Because mobile AR solutions already bring value added to various businesses, let's return to the present. Based on market analysis we've chosen 9 lines of business that will profit the most from introducing AR apps. We've prepared existing or future use cases for every one of this business types, each clearly showing how a certain industry can be aided or how a user issue can be solved.
The first application of Augmented Reality in business was the promotion of FMCG products by the Coca-Cola and Heinz brands. In these cases, the purpose of AR application was to promote products by using innovative technology. However, early technology development phase and low value for users meant that these solutions did not achieve their goals.
AR made a big comeback with the launch of Pokemon Go, which helped prove that people can adapt to this technology on a massive scale. The app became highly popular among smartphone users. However, businesses value was yet to be found.
Current technology is accessible and users can understand it. Constantly improving toolkits encourage more and more companies to develop their own apps. Let's find out then how Augmented Reality can help your business.
The biggest problem for the fashion industry, when it comes to e-commerce, are returns, which result in heavy costs. Customers order 2 or 3 sizes of each product because they aren't sure, which size will fit best. That is why fashion brands and multi-brand e-commerce shops are designing a way to match user silhouette, allowing customers to check how a product fits before buying it.
It seems that the one closest to working in this model is... yes, when we mention “e-commerce” Amazon is bound to appear. This Internet giant acquired BodyLabs start-up that develops 3D silhouette modelling based on a single photo.
Thanks to this solution, e-commerce retailers will be able to recommend appropriate size and offer a virtual fitting room. This will not only reduce costs but also increase conversion rates, thanks to the fact that customers will be able to see how they'll look in certain clothes (e.g. if a jacket matches a shirt) before buying something.
Direct to customer companies face similar challenges to those troubling fashion retailers, even though in the last years they managed to succeed, disturbing many traditional industries. Thanks to simplifying their stock and removing all middlemen this start-ups were able to offer quality products in a reasonable price. Just like fashion e-commerce companies, they need to reduce return costs to increase profits and should also simplify choosing the right product due to selling mostly online. One of the most known examples is Warby Parker, a spectacles brand, which enables their customers to order up to five frames to try on and decide which is best. When iPhone X appeared Warby Parker introduced face-scanning to help choose frames using a mobile app. It would be great to improve this functionality by adding a virtual fitting room for glasses.
At this moment we see at least 3 use cases, in which AR can help logistics companies. First application is shipping centre order completion optimisation. Employees using smart glasses (Google Smart Glass are currently the best choice) receive info about ordered items in real-time, scan barcodes and navigate through the centre without using their hands.
Thanks to contextual info display AR devices improve learning process during work. It's especially important for shipping companies during the Christmas season when they need to train many temporary employees in a short period of time.
Third application concerns customers that often aren't sure if their package is the right size. Courier companies may assist them by using an app that will check if the package meets the size requirements. Our company worked on developing one of the first technological solutions of that kind: check out Packhelp case study.
One of the best AR technology application examples is IKEA Place. Thanks to their mobile app we can check out how a furniture piece will look in our home.
Polish start-up tylko went much further. Thanks to a mobile app users can design a furniture piece, check out how will it look in their apartment and order it.
Adam Pickard has a very interesting idea in regard of IKEA. To buy the right furniture is no easy task, but the real problems may begin when it comes to assembling it. That is why Pickard came up with the AssembleAR application software that provides an interactive AR furniture assembly manual. Every time we don't know what to do next we can consult the app. See for yourself. This method allows us to digitise various manuals for devices that require assembly or configuration before they can be used.
How will the broadly defined interior design industry utilise AR in the future? I imagine software that will combine Artificial Intelligence and Augmented Reality. We simply tell it how we want to furnish our home, the AI searches for appropriate items and the AR allows us to see how the interiors will look after our redesign. I'm curious what solutions will the companies come up with, especially in Poland, where the furniture industry is particularly strong.
Right until now AR in the cosmetic industry was only associated with customers using it for trying up different make-up shades. Companies like Loreal are currently introducing software that allows users to see how would they look in various hair colours or eyebrow shapes before going to the hair or beauty parlour. Apart from that their software contains tutorials that help users choose the right products. Beauty brands are really betting on AR as we can see by the example of Loreal acquiring one the major AR technology providers — ModiFace.
Assisting the customers is not the only way to utilise AR in the cosmetic industry. Thanks to all the collected data regarding user behaviour and preferences, companies can better personalise their offer and increase customer loyalty.
Current use cases show that car sales are increasing thanks to the improved car accessories presentation and data visualisation during car travel.
Stationary car dealerships are equipped with several digital solutions enabling potential customers to conjure any car model in any given colour with any chosen equipment, which proves that digital solutions can increase sales. It allowed Audi to boost their dealership sales by 70%. Most people conduct web research before buying a new car. Thanks to apps built using ARKit or ARCore toolkits motor companies can enable potential customers to set any chosen car configuration and take a look at the vehicle from every side, including the interior. These solutions will also help increase car sales, provided that the companies using them will do it right.
When it comes to data visualisation during car travel currently available technologies are able to show static data, like speed, basic navigation data and other rudimentary info, in a manner allowing drivers to check them safely, while keeping their eyes on the road. What improvements can be made in that field? Software providers work on adjusting digital elements to the environment in real-time by combining AR with AI. It would allow placing navigation info on the road, informing users about which turn or street to take as well as about traffic or points of interest. What else? Thanks to constant development of autonomous car technology AR can be employed to inform users why the vehicle performs certain actions or provide them with entertainment.
Studying by reading and memorising is ineffective. School and university students learn better if knowledge is shared with them in an interactive and engaging manner. Augmented Reality can be applied in education in several ways. It is especially useful when it comes to experiment visualisation and explaining complicated issues when teaching biology, maths, physics, geography, etc.
Three main AR use cases in education involve 3D modelling, interactive books and skill learning enhancement. 3D visualisation is especially useful when learning about anatomy. Students can see various body parts from different perspectives and adjust their transparency to delve deeper. 3D models come in handy when teaching technical subjects. Thanks to apps like JigSpace students can disassemble machines or tools to see how certain parts work and look like. Interactive books, filled with digital elements help explain scientific issues and make individual learning process more engaging. The same technology can be applied in museums or art galleries. Practising in real-like situations would also be much easier for people using AR to learn new job skills.
Curate app, introduced by Sotheby’s International Realty (world's largest luxury estate agent), is a good example of how Augmented Reality can be utilised in the real estate industry. Thanks to virtual staging their ARCore-developed software allowed to solve the problem of potential customers who were unable to imagine how a completely furnished home will look like.
Similar solutions can be introduced by other real estate agents and developers that want to increase customer engagement with interior design visualisation.
I began with e-commerce, so it's only natural to mention offline retail. AR in e-commerce does not mean that the end of traditional retailers is near. On the contrary, thanks to Augmented Reality merchants can make shopping easier, faster and therefore more pleasant for their consumers. Shopping chains can employ AR to display additional product info, contextual advertising or store navigation.
Offline Point of Sale is imperfect when it comes to advertising, due to limited display area. Retailers can only promote certain amount of brands at the same time and those ads are not personalised. AR allows to aim particular products to predefined target groups among shoppers. For example, chocolates can be offered as a way to reward yourself or as a name day gift for one's grandmother. Other promotion example can involve showing recipes for a dish that can prepared using a certain product. This helps boost sales thanks to an adjusted message and enables simultaneous cooperation with multiple brands.
Fashion brands are a type of retail business that can employ AR in other ways. Let's imagine that a fashion model from the newest ad campaign gives us a tour around the store and shows outfits that match our style. If we want to try something on and are in a hurry a 3D model of our silhouette will appear wearing chosen clothing.
Who never got lost in a store while looking for a specific product? I guess almost anybody can relate to this scenario. Soon AR apps will lead us to a store section that we need to get to and a product we are looking for.
All solutions mentioned above can provide retailers with new data, that will also help organise commercial space and design better advertising offer, which will lead to cost reduction and boost sales.
Augmented Reality increases customer engagement in sales process, enables to test a product before buying it, provides visual teaching aids that help understand complicated issues and learn new skills. Biggest technological companies bet on AR and only through their platforms technology has a real chance to gain a foothold. Therefore you should think ahead and build an AR app as soon as possible.
If you believe that your problems can be fixed by interactive visualisation or real-world data then contact us. We'll help you! If your use case isn't described in this entry, write to us and we will figure out together how to face your challenges and solve your problems.