Augmented Reality: A New CMO Tool
For many companies in industries ranging from telecom and manufacturing to retail and consumer products, augmented reality (AR) is not a future technology—it is being used today to improve operations, employee training, marketing, and customer experience. With AR, companies can overlay contextual information on physical products to create a 3D experience, for instance, projecting nutritional information onto products in stores or displaying the internal components of a device needing repair.
“Today, users can experience AR with virtually any smartphone or tablet,” says Jay Samit, vice chairman at Deloitte Digital Reality. “As proof of AR’s popularity, 750 million people downloaded Pokémon GO, a game that brought this technology to the masses. Today, AR is used for more than just gaming. Many issues facing today’s corporations, from manufacturing and field service to HR and sales, are being solved by AR.”
In the following interview, Samit discusses some of the opportunities AR will create for marketers and the challenges still ahead.
How are companies using AR today?
Samit: One of the biggest challenges companies face today—particularly those in manufacturing and telecom—is employee training. Many baby boomers are retiring, which can leave a skills gap at organizations. Rather than relying on the old paradigm of training—in which people absorb information and must recall it later—some companies are using AR to provide real-time training and support. For example, to help solve a customer problem in telecom, a business can connect a field technician wearing AR glasses to a more experienced person at the office rather than sending out another truck and crew. One telecom company expects to save an estimated $1 billion in three years using this technology. Retail stores are using AR to train employees by simulating experiences such as crowd management when the doors open on Black Friday. Companies across all industries can use AR to become more connected, efficient, and responsive to consumer needs.
‘AR changes the paradigm of marketing and advertising from a mass medium to a highly targeted marketing and CRM tool.’
—Jay Samit, vice chairman, Deloitte Digital Reality
What are some marketing opportunities for AR?
Marketers will be able to target customers using data from online shopping and other sources to provide relevant product information, pricing, and display options with AR in real time. For example, a health-conscious shopper wearing AR glasses may see only gluten-free products displayed on store shelves, or a consumer with a newborn may be offered a half-price coupon for diapers when she walks down the baby product aisle. Manufacturers and retailers will be able to provide variable pricing at point of sale, just as airlines and hotels have done for years online. There may be a price displayed on the product, but if customers supply some personal information, they can get a discount.
Are consumers likely to do this?
It’s a tradeoff. Consumers will likely want value in return for information. For instance, some AR makeup mirrors today use facial recognition software to provide product recommendations. Imagine AR makeup mirrors in retail stores that could recognize users and, for example, detect a change in the size of an age spot and recommend a visit to the dermatologist to check it for melanoma. Consumers may be more willing to give up personal information in exchange for a tool that could possibly save their lives. AR changes the paradigm of marketing and advertising from a mass medium to a highly targeted marketing and CRM tool.
What challenges do marketers face implementing AR?
One of the biggest challenges for marketing organizations is data residing in siloes. For example, customer data from in-store sales may reside in one system while online shopping data sits in another. Marketers can benefit from integrating data from various systems before millions of AR glasses hit consumers’ hands within the next few years. That is a systemic challenge marketers will likely need to address.
What are you learning from your work with AR?
One of the biggest lessons is that AR isn’t just about adding context and overlaying data onto physical objects—it is also about “removing” objects from the physical environment. For example, with AR, grocery stores can hide products containing dairy from lactose-intolerant shoppers, and quick-service restaurants can make the cheese bin appear empty for employees assembling a hamburger without cheese. There may even be an ad-blocking AR app developed that will remove ads from outdoor billboards. About half the companies we are working with today understand the urgency and speed at which this transformation is taking place. When 750 million people have already experienced the benefits of AR, it’s not a fringe application
This interview was originally published by the Wall Street Journal on September 5, 2017.