The U.S. economy is facing a paradox. At the same time as the stock market is setting new record highs, many traditional business sectors are being radically disrupted by technology. The S&P 500’s record-setting gains mask the challenges faced by the automotive, retail, and healthcare sectors. With three months still remaining in 2017, we’ve already seen seven straight months of year-over-year auto sales declines and over 6,300 retail chain stores shuttered. Rising healthcare costs are squeezing American employers’ profits while 43 million Americans struggle with unpaid medical bills. The good news is that some of the same technology companies that exacerbated the disruption are now rolling out tools that could help with these troubled sectors’ financial resurrection: Augmented Reality (AR).
No industry has seen more technological assaults on the status quo than automotive. At the same time the popularity of ride-hailing companies like Uber call into question car ownership, autonomous electric vehicles alter the very design, function, and use of automobiles. Technology-centric newcomers such as Tesla are even challenging the convention of releasing new vehicle models annually.
Several major automakers are facing these obstacles head-on through cost-savings from augmented and virtual reality glasses for design and marketing. Digital reality headsets enable design and engineering teams to remotely collaborate in ways that they can with clay models. Teams around the globe can test interiors in various lighting conditions while engineers can seamlessly update their models. More iterations can be explored, shared, and developed while saving millions of dollars, increasing product quality, and speeding new products to market. As AR glasses gain mass adoption, automakers will be able to capitalize on their investments in digital reality and models by letting prospective buyers customize and virtually test drive cars before stepping onto the dealer’s showroom floor. For a new generation of consumers that has grown use to online personalization, AR holds the potential for car shoppers to buy more customized cars in the not-too-distant future.
A century ago, the key to being a successful retailer was literally knowing your customer. Smart shopkeepers not only knew their best customers’ names, but also remembered their tastes and what they bought previously. As mass merchants started dominate the brick-and-mortar landscape, the personal relationship with consumers dissipated, allowing online retailers with customer-tracking and ad-targeting software to take personalization to a new level of accuracy and efficiency. Unable to fully take advantage of customers’ online profiles when those same shoppers arrive physically in their store, many chains have been forced to cut back on their retail footprint.
With 24 million AR headsets expected to be sold next year, brick-and-mortar retailers now have the opportunity to leapfrog the online shopping experience. AR filters will help retailers customize the in-store experience for shoppers by providing a level of service and engagement that is not possible online. Mixed reality mannequins with your exact body type will be adorned with the latest clothing styles that are consistent with past purchases (or even show you how to mix and match what you already have at home). Such shopping experiences hold the potential to bring a “wow factor” to merchandizing and make retailers major destinations again.
While technological advancements in medications and surgery are helping people to live longer, much of the managerial and regulatory work of providing quality healthcare has been mired in costly, inefficient processes of the past. Again, digital reality paired with other technologies is helping improve productivity and efficiency in patient care. For many doctors, a full day of making the rounds with patients is followed by several hours of adding notes into a computer. But doctors can now use AR glasses to save time by having low-cost clerical staff simultaneously transcribe all of the doctor-patient interactions. The time and cost savings are substantial, with many doctors reducing electronic healthcare reporting by two to three hours a day.
Key takeaway: AR can reinvigorate industries
Augmented reality isn’t a cure-all for the challenges facing healthcare, retail, and automotive sectors. But just as the personal computer, the Internet, and the smartphone transformed our economy in ways unimagined at their onset, AR will change how industries and our economy functions. With an expected $2 trillion impact, augmented and virtually reality are quickly becoming an economic reality.
Jay Samit is independent vice chairman of Deloitte’s Digital Reality practice and author of the bestselling book “Disrupt You!” This post was first published in Fortune on September 21, 2017.