Market Guide for Augmented Reality: 10 Industries, 30 Cases, 5 Key Findings

5 Key Findings

• Augmented Reality (AR) is the perfect tool for transmitting information. AR doesn’t change the information in any sense. AR enhances the reality making the information more comprehensible and more accessible to recipients. AR doesn’t create illusions, on the contrary, it explains the reality in a crystal clear way.
• Tech giants, such as Google, HTC, Microsoft, Facebook, Lenovo, Samsung are investing in AR software and hardware intensively making AR more and more accessible to common users.
• Dynamic CAGR of AR market is inevitable: analytics at IDC claim that it will reach up to 100% starting from 2017, analysts at BIS Research predict AR market growth at 65,1% CAGR from 2018. ORBIS Research specialists claim that AR market will grow at a GAGR 77,76% each year starting from 2017.
• The access to AR is also growing. First of all, according to VRARA, by 2020 4.2 bln devices will be compatible with augmented reality. More than that, soon AR will be accessible through web browsers, mail, and even social media. New formats for the files in AR will let users share and create 3D objects and animations as easily as they chat in messengers today.
• Consumer enthusiasm to AR will push its implementation in such spheres as education, healthcare, retail, media, e-commerce, business, manufacture, logistics, military, real estate, and marketing for sure. That’s why augmented reality consulting can be a very prospective sphere for the companies that create AR apps.

DEFINITION OF AUGMENTED REALITY (AR)

The word “augmented” is the the synonym to the words “improved” or “enhanced.” But how exactly can we improve everyday life with the help of augmented reality solutions? By displaying digital information over physical environment AR gives us the possibility to show more, to tell more, and to explain complex, sometimes even puzzling information in a more comprehensible way. Augmented reality potential can be best summarized with the following definitions: data visualization, try before you buy option, processes, space, and costs optimization, virtual shopping.

Augmented reality allows overlaying digital elements, such as computer graphics, sound, haptics or GPS data over physical environment smoothly and naturally. And augmented reality is accessible for the majority of people today because the number of the devices compatible with AR is predicted to reach 4.2 bln models by 2020 according to VRARA.

It means that almost half of the population of the world will be able to use augmented reality on their smartphones, tablets, and on their personal computers as well. No need to read all Gartner digital transformation market guides to understand that the demand for augmented reality is rising.

AR APPLICATIONS FOR BUSINESSES AND USERS

User-based applications of AR. Though AR is still associated mainly with the entertainment (after the success of Pokemon Go, of course). Yet AR applications are supposed to make a mundane life of common users more comfortable and less stressful. For instance, such a simple tool as AR app for measuring objects' parameters can enhance our life incredibly. AR guidelines for car repair or playing pool enhance the process of education immensely and deliver a solution to almost any problem.

Business applications of AR. The number of business applications of AR is literally unlimited. As AR is the synonym to the words "optimization, innovative solutions, and visualization", it’s easy to find applications of AR in almost any business sphere. Businesses can use AR for such purposes as visualization of complex multi-structural information, heavy equipment, interactive guidelines, analytics. Augmented reality in marketing and sales gives the possibility for brands to connect to customers in a more emotional and engaging way. It is difficult to find the sphere which cannot be enhanced with the help of AR.

INDUSTRIES THAT AR WILL TRANSFORM

The analysis of cases shows that the spheres which will be transformed by AR the most are the following: retail, e-commerce, manufacture, car industry, real estate & architecture, entertainment, marketing, education, and medicine & pharmaceuticals.

1. Retail

Modern retailers feel threatened by the increasing popularity of the e-commerce sector: people choose online shopping to traditional shopping more often. The number of consumers who will buy online is supposed to reach 2.14 bln by 2021 according to Statista. Retailers still can compete with online stores if they enhance the in-store experience.

GAP is using AR for virtual reality dressing rooms where customers can try on clothes without getting out of their house. No need to visit GAP stores at all.

Timberland used AR to seduce customers inside the stores. As customers often feel reluctant to step into the stores and try clothes, Timberland used augmented reality screens to stimulate customers’ interest.

Allo opened a virtual reality store to offer customers a bigger choice of product line and to impress them as well. As a result, customers who downloaded the application can open the door to the virtual store from any place of the world and choose among an unlimited number of goods.

2. E-commerce

The majority of online stores will soon offer clients one more possibility of trying new products before buying them. That’s how e-commerce stores will be able to reduce buyer’s remorse and provide customers with extra comfort.

Ebay  created a new AR-powered feature that makes it’s easier for sellers to pick up the right box to send goods to buyers.

Lowe’s AR application gives customers the possibility to preview and scale all the pieces of furniture at any location.

Amazon created an augmented reality shopping tool that lets customers see how products will look inside any environment.

3. Car Industry

Designing, fixing, and testing car prototypes is challenging, time-consuming, and costly. It’s possible to improve and speed up these operations with the help of AR. That is why the biggest car manufacturers use AR more and more often.

Hyundai is trying to win the hearts of a younger target audience with the help of AR guidelines. A user downloads AR app and points the phone under the hood of the car to see the guidelines that help him to fix any problem.

Porsche uses augmented reality to make car repair easier for professional mechanics. In case of some serious problems, mechanics from a New York office can negotiate the problem with the colleagues from London office.

Toyota patented augmented reality windshield so it’s possible that soon the distance between your car and the nearest automobile will be displayed on your windshield in Toyota.

4. Manufacture

With the help of technological innovations companies reduce costs and the number of human errors. AR apps can be used at the stage of the concept creation, design, training, and, of course, at the QA and production. 

Lockheed is using augmented reality glasses to build fighter jets. The employees of the company use special AR glasses to inspect F-35 and F-22 fighter jets for years already. The company claims that AR helps to reduce costs and time during QA check.

Mitsubishi uses AR to assist in the maintenance of the manufacturing equipment. The car manufacturer has created the maintenance - support technology based on the 3D model that permits users to enter the results of the inspection with the help of voice.

Airbus has been using AR for QA for some time already, for this purpose the company created a special system - Smart Augmented Reality Tool (SART). This AR tool is being used daily by more than 1000 employees.

5. Entertainment

Entertainment sector is saturated with services and products today. Yet augmented reality applications can make entertainment experience more accessible, more engaging, and more interactive, of course. That is why festivals, music bands, cinema theatres are searching for the new ways to implement AR.

Coachella decided to make the festival experience even more emotional and memorable for its customers. Those who downloaded AR application could enhance the festival environment with 3D art, make photos with beautiful 3D images and animations and share them online.

Musicians enhance their videos with the help of AR making customers’ experience more versatile. Thus, Rihanna and David Guetta added some AR to their music video so that their fans could become the participants of the video.

LEGO created a tutorial in AR that helps kids and their parents to have more engaging gaming experience. Those who downloaded LEGO’s AR app could animate dragons in AR and learn how to assemble a fire station more effectively.

6. Education

The methods of modern education are archaic: it’s getting harder and harder to explain complex information that requires visualization in the engaging way. That’s the moment to implement augmented reality solutions in school curriculums as there are a lot of apps that can transform private and public education from within.

ARSchool is the application which helps pupils to understand how the Solar System is working. Those who downloaded the app get immersed in the world of space and saw planets rotating around.

Curiscope AR app gives students a chance to explore a human body from within with the help of a tablet only.

Books and Manuals with AR. This book about animals has one additional feature to attract the attention of little readers: some of the illustrations can be animated in AR.

7. Real Estate

Real estate sector will benefit from the implementation of AR the most: this technology solves the problem of the visualization oat once. With the help of AR architects demonstrate how future apartments, houses will look in 3D to their potential clients and investors.

Sotheby is using AR app to stage empty apartments. Before this app real estate agents had to order a special service of staging because selling empty apartments was a bit problematic.

Realtor.com agency built Street Peak AR application to make the choice of the house less stressful. The customers of the company can download the app and see all the information about the house of the choice uploaded directly from the website.

Airbnb is planning to use augmented reality applications to enhance the leasing experience. AR will make the navigation inside apartments in foreign more comfortable.

8. Architecture

With the help of AR architects demonstrate how future apartments or houses will look in 3D to their potential clients and investors.

Grupo Invercasa sells building projects with the help of augmented reality by demonstrating 3D models to potential customers. The company claims AR helped it to stand out among competitors.

Mortensen and McCarthy Building Companies say that engaging with clients on early stages of development with the help of augmented reality saves costs on costly fixes and keeps customers interested.

Dereham Town Center used Augment app to see the digital representation of the building on screen and experience the design as a 3D object before the construction. This app is good not only for visualization but for the interactive engagement with potential buyers.

9. Marketing

AR/VR apps have become an awesome digital marketing tool alongside SEO, SMM or e-mail marketing. The thing is AR marketing is personalized, experiential, engaging and it produces real WOW effect in customers. Many big companies use AR as a marketing tool today spicing up their campaigns.

L’Oreal famous MakeUp Genius app is the possibility to put on makeup using AR filters only. The app turned out to be a real marketing and sales success for the company! 14 mln downloads worldwide sounds like a dream of any CEO.

Danone built AR application that displays scientific information about space to kids.This application helped to establish a long-term communication with customers and to engage with them in a more emotional way.

Starbucks created experiential AR app to let customers see how their coffee is made inside the roastery.

10. Medicine & Pharmaceutical Industry

Healthcare industry is evolving rapidly yet most clinics are still trying to solve the same problems of high risk for human health, low effectiveness of some procedures, and poor understanding of treatment by patients themselves.

Florida Hospital AccuVein uses AR applications to avoid human errors during injections. This app visualizes patient’s veins and the nurse has no problems performing this little manipulations.

GlaxoSmithKline used AR animation created by Polygon to visualize the treatment of the cytokines. In such a way the pharma giant aimed to show that the education of their customers is one of the top priorities of the company.

Augmedics overlays 3D scans over the patient’s spine to decrease health risks for patients and increase the effectiveness of surgeon’s work. American surgeons have already tested this application and it’s one of the AR apps that can be soon approved by FDA.

MARKET INDICATORS of AR MARKET 2018

• At the last Google presentation, the company showed the world how to enhance maps with the help of animated guides in AR. In several years people will use maps with additional visual, textual or even video information.
• Apple announced that AR is one of their main perspective directions. Today Apple can boast with the new format for AR files called USDZ which will make AR a part of everyday communication. And the company is allegedly working on wearable AR device.
• One of the most heavily funded startups in AR production, Magic Leap, showed the world its goggles at last. Investors are pouring money into AR software and hardware heavily as well. Magic Leap has raised more than $2.3 billion in funding to date.
• During this F8 Facebook announced that it’s bringing AR to Instagram. AR Studio will help users to create unique interactive AR experiences and share them online. So more than 3 bln users will soon have access to AR camera.

PERSPECTIVE SPHERES FOR AR DEVELOPMENT

WEB AR will hit the market sooner or later. Because no matter how passionate people are about mobile apps, they always try to make things even less complex. So today several companies, and Google is among them, are working to let you experience AR via browser.

AR as a Digital Marketing Tool. AR solutions will soon be added to the digital marketing menu of most of the agencies. Augmented reality gives marketers the possibility to increase brand awareness, improve engagement, and evoke WOW effect in customers. Some agencies today offer AR as a unique product along with other digital marketing tools.

AR in Social Media. Snapchat made AR one of its key features and the reasons of success. Yet, Facebook has all the chances to win the race for AR against Snapchat. The company is improving AR Studio with the goal to simplify AR experiences creation and AR sharing across Facebook services.

PROGNOSIS

Prognosis regarding AR market growth is very promising. Analysts just discuss the speed of growth of the market offering more and more inspiring numbers. According to the most humble estimates, the market will grow at 77% GADR. Mobile AR sector is just beginning to grow so it can show $50 to $100 million exits in the next 2 years.

Investments. As for the investments, according to Digi-Capital, AR/VR investment records were broken in 2017 as companies raised over $3 billion in 28 different spheres. Investors are aware of the fact that AR market is at the early stage of the development, and it will take time to scale.

VIRTUAL REALITY VS AUGMENTED REALITY SOLUTIONS

Emotional Experience. Compared to virtual reality solutions, augmented reality is more effective for businesses because it doesn’t immerse viewers into illusion, therefore, it doesn’t evoke distrust in customers. Only positive emotions such as amazement, curiosity, and awe. In the era of experiential economy, when people search for memories and insights more than services, AR becomes an effective solution for businesses.

Comfort. Augmented reality technology makes life more comfortable. AR guidelines can transform car repair into a pleasant game. AR tutorial makes makeup more less stressful for women. AR-based shopping experience transforms shopping into comfortable and exciting entertainment.

Accessibility. Augmented reality is much more accessible compared to virtual reality: the number of devices that support AR apps is growing with the incredible speed and soon the majority of people with smartphones will have them. More than that, web AR will soon make even more accessible. So with the help of augmented reality technology a common user finds reality more comprehensible and less puzzling.

RECOMMENDATIONS

• CEOs, managers, CTOs, marketers should familiarize themselves with the capabilities of AR to know how it can be implemented in operations, production, design, sales, and marketing activities.
• Most companies find it hard to see how exactly augmented reality solutions can be implemented in business operations.That is why it is most effective to consult companies building AR software to find efficient applications.
• The majority of problems modern companies are struggling to solve can be solved with the help of augmented reality today. It is possible to enhance the level of visualization of products and services for marketing and sales with the help of augmented reality. Augmented reality solutions can reduce human errors significantly in logistics and manufacture making design and architecture more effective. AR apps can be the best tool for the space, time, and costs optimization for retailers that want to expand their product line by opening virtual stores.