A New Retail Experience
Using AR in clothes retail can make the shopping experience more effective by customers to select products and instantly see them overlaid wherever they point their phone. This technology exists today on smartphones through applications and even through “smart mirrors” in the changing rooms of large chains like Ralph Lauren and H&M.
Augmented Reality has also found a huge use case in furniture sales. IKEA released the IKEA Place app, allowing users to visualize the furniture in their homes before the items. Giving that power to buyers not only increased their confidence by 71% according to a report published by Mobile Marketer, it also decreased returns, customer disappointment, and decreased logistics costs.
Regionally, we have seen a high penetration of AR through the use of Snapchat amongst retailers that have begun to integrate more technology into their campaigns. AR use can especially be seen during seasonal campaigns and holiday periods. In Saudi Arabia, the holy month of Ramadan sees retailers increasing their use of AR technology, especially Snap Inc.’s AR Lens. Snapchat’s Snap Consumer AR: Global Report released in 2022 stated that using the AR Lens on Snapchat multiplied the average purchase quantity by 4.3.
Despite these numbers, an approximate of only 1% of retailers are currently using AR and VR. Virtual Reality is an even less adopted technology that uses expensive headsets to create simulated environments that can be explored in 360 degrees. But while retail is the most intuitive application for AR, there are huge strides made in other industries as well.
Exploring Sites of Tourism and Heritage
There are many proactive applications of VR that can be seen across many spheres. Locally, Snapchat collaborated with Saudi Arabia’s Royal Commission of AlUla to bring the UNESCO world heritage site Lihyan Bin Kuza Al-Farid (The Tomb of Lihyan son of Kuza) to life. As part of Saudi’s National Day, the initiative aims to give people who have not visited the historical sites the ability to experience their uniqueness. Bringing to light these previously hidden heritage sites will bolster touristic excursions to these hidden gems.
With the expectation that the use of AR will continue to rise, the application of this technology to heritage sites will allow users to not only explore the areas, but also learn about the significance of these places historically. These areas will not only become sites of tourism, but also of learning.
Educating the Next Generation
In education, augmented reality has given students the unprecedented ability of inspecting subjects of study as 3D holograms from a variety of angles in a new “experiential learning experience.” For reference, earlier generations only had 2D models in textbooks as a basis for understanding molecule structures. Now, students can interact with virtual objects in space, run simulations, and check results from every angle in this more memorable and understandable method of learning.
Augmented Reality has been used to perform medical simulations of certain procedures. More impressively, new devices embracing augmented reality in the operating room have shown to increase efficiency and accuracy in surgeries. For instance, digitally enhanced images in the visor of the surgeon allows them to review patient vitals during a medical procedure without juggling multiple displays. Other experimental devices also built into a surgeon’s visor are said to give the surgeon real “x-ray vision.”
The Automotive Revolution
After this overview, the ultimate question comes in: where is AR going and who is spending big on it? The technology is still in the early adoption space and many industries are piloting use cases with it. However, the strongest applicant is the automotive industry. The industry is using AR at multiple stages of the car’s life cycle, starting with the R&D. Here, engineers are prototyping designs and displaying incorporated changes to customers as a new way of interacting with the car itself through the use of Head-Up-Display (HUD) augmented reality features. BMW and Accenture have even designed an app that allows you to experience a new car in your driveway without having to go to the showroom.
The most interesting aspect is how automotive industries tend to monetize this technology through the customer. Manufacturers are increasingly pushing for subscription services in their cars. General Motors said it expected that their in-car subscription services generated $2 billion in revenue last year, with the potential to make as much as $25 billion by 2030. To put it into perspective, Netflix’s revenue in 2020 was close to $25 billion. With such potential, it might not be far where we see car manufacturers push the pedal to the metal and drive this interactive and immersive technology to include subscription models.
What’s Next?
Our future consumers will see an increased number originating from Gen Z’s populace, with AR adoption is set to become a global phenomenon. Within Saudi alone, 92% of communication was traced back to AR based platforms such as Snapchat. Other industries that target this generation have also seen a significant rise in users. Considering Saudi Arabia holds the highest smartphone penetration regionally, it is expected that Saudi will establish its market as a global leader. Brands should begin piloting their campaigns to integrate AR or risk falling behind.
