CX Spotlight by Fifth Quadrant

Are AR and CX delivering on the hype?

I regard it as a big idea, like the smartphone. The smartphone is for everyone, we don't have to think the iPhone is about a certain demographic, or country or vertical market: it’s for everyone. I think AR is that big, it’s huge. I get excited because of the things that could be done that could improve a lot of lives. And be entertaining. - Apple CEO Tim Cook, February 2017

Over the last few years, we've heard that some combination of Virtual Reality (VR), Augmented Reality (AR) of Mixed Reality (MR) will change the way we do everything – from shopping, to communicating, to working. Like many technology predictions, it's happening slower than anticipated. But there are strong indications that we are truly close to the tipping point, particularly for AR, which is benefitting from its greater accessibility and real-world applications.

First, a word on terminology. In its current form, VR requires wearing a full headset in order to enter a fully computer-generated (CG) world. But there is some murkiness surrounding AR/MR terminology. Technically speaking, AR is the overlay of CG content onto the real world and MR is the same thing but done in a way that the CG is more blended with the real world and interacts with it. Clearly, there is some crossover here, and, at present, people are more often using AR to cover both AR and MR experiences. Here, I'll use AR as a catchall that includes MR.

When it comes to their applications, AR seems better suited to the real world and VR, to gaming. Playing a game, even with people online, is largely a solo pursuit. Yes, you may be talking and interacting with others, but in truth, you are still most likely alone in a room (this sounds sadder than it is). Wearing a full headset in this context makes sense; there is no one in your physical space to interact with and, furthermore, gaming is something the benefits from full immersion.

Pokémon? No

pokemon ARThis may seem a little off target, considering that the AR experience everyone knows about was a game, but it's becoming clear that Pokémon Go was the exception, not the rule. There hasn't been another AR game to catch fire in the same way, and the population of Pokémon Go players has dwindled. The hottest game to emerge recently is Fortnite, a massive multiplayer battle royale with no AR or VR features. So why no killer AR/VR game? The tech is good enough, so it must be a content issue. The central problem seems to be this: AR/VR games still feel like a tech demo in which the game serves the tech, when the reverse should be true.

Does this mean VR will never be used in retail? Not necessarily. It's conceivable that VR will greatly extend the online shopping experience. Imagine putting on your headset and virtually visiting any store in the world and making purchases. The only catch would be that you'd still have to wait for shipping. Perhaps if 3D printing becomes good enough we can solve that problem too. In the meantime, AR is better positioned to have an impact on CX than VR.

Also check out: Aug-mental Reality: Pokémon and the AR Retail Conundrum

Major tech companies dive in

Google was a pioneer of AR with the release of Google Glass in 2013. But Google Glass suffered from cost, availability, and the perception issue that came with wearing them (people called wearers "glassholes" and worried about the privacy issues that came with their recording capabilities). In 2015, Google Glass axed the commercial version of the specs and last year, an upgraded version was released for enterprise use. Today Google Glass is being used in factories worldwide, and Forrester Research predicts that over 14 million US workers will use smart glasses by 2025. Using VR in a factory setting wouldn't be very practical. It's possible that AR is better suited to physical work and VR will be used in more creative pursuits such as graphic or software design.

Microsoft, Facebook and Apple have also seen the massive potential in VR/AR technology, and are making significant investments into the space. Microsoft has the HoloLens (they call it MR; everyone else sees it as AR), Facebook has Oculus (VR) and Apple recently launched its ARKit. Apple CEO Tim Cook is particularly bullish on AR, telling The Independent in the quote above he sees it is as important an innovation as the smartphone.

One of the great things about AR is its accessibility. Unlike VR, which - for now at least - requires a pretty cumbersome headset, AR can be experienced with just a smartphone or tablet – any screen essentially. With that lower barrier to entry and user-friendliness (AR doesn't remove you from the world, it augments it), it makes sense that AR will take off first. As noted by The Verge, AR is starting to deliver on the hype promised by VR. Let's look at some of the ways companies have used - or are planning to use -  AR to improve CX.

 Placing virtual objects in the real world

IKEA saw the potential for AR and its products early on, releasing a catalogue in 2014 that allowed select pages to be scanned to produce AR demos. IKEA has since built and launched an app called IKEA place using Apple's ARKit. IKEA Place allows users to virtually any IKEA product without the use of the catalogue.



Closer to home, an Australian startup has launched an ARkit-powered app called Realar Places that gives builders the ability to place a virtual house into a real space for buyers to walk through and experience. Realar allows users to view the layout of a house, walk through the rooms and the view out the windows. Tech entrepreneur and co-creator Dr David Swan says that until recently most AR apps are largely for entertainment or gimmicks with little real-world practicality. “We were excited by the commercial opportunities augmented reality presents now that it is becoming more commonplace on consumer devices but also wanted to create something that would add real value for its users,” he said.

Augmenting the physical store experience

Fashion retail is another area that is adopting AR. Zara recently revealed that it will be temporarily getting rid of its mannequins in 120 of its flagship stores worldwide. Customers inside and outside stores can view AR content through the Zara AR app for iOS and Android. When users scan store windows, in-store podiums or shipping packages from online orders, the app displays AR content featuring models posing in various outfits. Users are also able to "shop the look" and purchase the outfits worn.



Trendy US fast-food chain Bareburger says that it will one day replace all paper menus with 3D AR models of its menu. For now, Bareburger has rolled out that feature to limited items. Users can use Snapchat to scan Snapcodes and view AR products before ordering them. Bareburger is also experimenting with AR for rewards, giving 100 random guests in each of its 35 US locations and single Dubai location a "gold snapcode" with their takeaway or delivery orders. Winners scan the gold snapcode to reveal what they have won in AR, but don't worry, the prizes are real food. Sometimes real is still good.




Improving service

Air New Zealand is looking at how AR might improve customer service. Last year Air New Zealand announced that it is working with Dimension Data on software for the HoloLens that could support cabin crew. The HoloLens does this by aggregating and displaying key customer data – including customer emotions - while the cabin crew perform their duties. This almost looks like one of those goofy April Fool's ads, but it is apparently real:



So, when will it be everywhere?

AR still has a few headwinds to face before it becomes ubiquitous in the retail environment. The biggest one is probably cost. Developing a quality AR app still isn't cheap, and there is little data to support the idea that it will actually improve sales. In other words, at these early stages, it's still a bit of a gamble.

Brabant Development Agency (BOM) recently surveyed 613 developers of VR/AR to find out which part of hype cycle we are in. BOM found that the current state of VR/AR is comparable to where the internet was in 1995. "Just like in '95, growth is hampered by a chicken and egg problem across the value chain," BOM noted. "Infrastructure is still too expensive and the audience is limited. As a consequence, it's hard to make a business case for developing new content and there are no tools and platforms available for users to do it themselves."

But BOM is also optimistic about where VR/AR is heading, with over a quarter of participants (26%) indicating that they are planning on starting with VR/AR within one year. "We see plenty of signs in our research that VR/AR is evolving beyond hype towards serious business: more realistic budget expectations, increased deployment in operations (which indicates traction in the AR market) and more active users."

It's still early days for both VR and AR. However, with AR's greater accessibility, lower barrier to entry, and burgeoning real-world applications, it appears that AR is the one that's poised to more greatly affect our lives in the near future. BOM's research predicts that both technologies will see increased uptake within the next five to ten years. If that sounds ambitious, listen to the these folks talk about the internet in 1995, and then remember where that tech was a decade later.



 Ready to talk CX?

Stefan Kostarelis

Written by Stefan Kostarelis

Stefan is the Content Manager at a Sydney-based investor relations firm, and a freelance writer whose work has appeared in Techly, Paste Magazine, Lost at E Minor and Tech Invest.

Topics: augmented reality CX Articles & Insights

You might also enjoy reading...