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Augmented reality: Is this the real life?

by Jack Millership , 09.12.2015

Virtual and real worlds are moving closer together. Augmented reality (AR) is expected to be used by brands embracing the technology more in their advertising campaigns, as well as beyond onto the high street. Increased interactivity and customer engagement are just two of the rewards for the investment. There are endless opportunities to inject virtual objects into physical reality, as well as to harness the data generated by this virtual layer to meet emerging consumer needs.

So what is possible? Two recent AR advertising campaigns show how this pioneering technology can engage consumers. Skoda employed AR to enable people to design its new Fabia at London’s Waterloo station. Designed as a video game, choices ranged from 14 colors, three concepts and five interiors, producing almost 100 possibilities. The cars could be customized and were then projected on the station’s enormous digital screen. In an outdoor ad, Pepsi Max created the Unbelievable Bus Shelter in London. This approach was all about engagement – using creative video execution to surprise, shock and delight people waiting for a bus. Once word had got out that the bus stop was not all it seemed, small crowds of people waited to see explosions or tentacles creeping out of drains and wrapping themselves around commuters. People queuing up to experience advertising certainly underlines how AR can achieve cut-through.

For now, AR benefits from the novelty factor, which generates viral marketing via consumer generated social media. The challenge is to incorporate AR and shift beyond novelty and into the mainstream, while retaining its ability to get a message across in today’s crowded media landscape.

AR in the in-store environment

Retailers are already using AR technology to help consumers make up their minds by visualizing virtual objects in their real worlds. By replicating their homes using a camera and screen from a mobile device, IKEA’s AR app allows people to place items from the retailer’s catalogue into their own living rooms. Online clothing retailer ASOS’s Fashion Finder allows shoppers to upload their photos to try on different styles in a virtual fitting room. L’Oréal Makeup Genius allows the user to virtually sample make-up and Topshop’s Kinect Dressing rooms let customers try items on quickly and easily. One advantage of this for retailers is introducing ‘reverse showrooming’. We know showrooming, where consumers try out products in a physical store and then buy them online, is a costly problem for many brick-and-mortar retailers. Location-based AR marketing may allow retailers to fight back by targeting consumers who have been frequently searching online for an item to come and see it in-store, using an incentive to encourage them to buy then and there.

But a word of caution. Although in its infancy, several of the first AR apps have seen poor user reviews in the App Store. Today’s consumers are tech savvy, and they have high expectations – a bad experience with AR now could put them off for the long term.

What 18- to 21-year-olds expect from tomorrow’s in-store experience

As part of our Young Shopper Study, carried out at the end of 2014, 18- to 21-year-olds in ten markets (Brazil, China, Germany, India, Italy, Russia, South Africa, South Korea, the UK and USA) were questioned about how they shop now, and how they expect to do it in the future. The survey revealed a strong appetite for a personalized, tailored shopping experience in the future, and this is where AR could have a role. Furthermore, young shoppers are willing to trade their personal information where they see a direct benefit to them. For example, 49 per cent of 16- to 21-year-old in Brazil want to buy products unique to them, and 51 per cent want the store to ‘talk’ to their mobile phone to tell them about products that match their needs. This is why beacon technology is gaining more traction around the world, most notably in the US. We anticipate continued appetite for increasing personalization from young shoppers and a willingness to embrace technologies that help facilitate a more tailored shopping experience. But this desire isn’t unique to just young people. In our research carried out in the UK, people are happy to share their data if there is a benefit: 71 per cent if it helps them save money, and 63 per cent if it helps them save time.

Taking AR to the next level: wearables and personalization

As more devices come online and the Internet of Things becomes a reality, companies will have the opportunity to leverage real-time big data analytics to provide consumers a more useful and engaging AR experience. This is when AR will have a real chance to reach its potential. Quite simply, AR takes on a new meaning with big data.

Although sophisticated location-based technology is in its infancy, retail spaces such as London’s Regent Street have started to deploy Apple’s iBeacon to more accurately locate consumers and provide them with relevant marketing and promotions. Its success is reliant upon the accuracy of the technology used and shoppers would be able to select if they are willing to accept messages. This might be for the duration of a shopping trip, or perhaps for a specific period – say in the run up to Black Friday or Christmas. Wearables will have a key role to play here, providing a hands-free overlay of information including retailer incentives, and navigation to their stores. With AR available across mobile, tablet, browser, smartwatch, retailers can gather data on our behavior and preferences, enabling them to target consumers at the right time and place with personalised notifications. A considerable barrier to adoption is managing the volume of messages such an approach might generate, particularly if they are coming from a variety of competing sources. It will be important to manage both the quantity and quality of notifications to avoid ‘pop-up’ fatigue. A further challenge will be to ensure that personalization at this level doesn’t go too far. In another study, we identified a tipping point at which people feel brands are getting ‘too personal’, and this simply turns them off. In fact, the vast majority of people – 90 per cent – prefer to buy from companies that respect their privacy, and 86 per cent would like more control of how their data is used.

The answer will be a more sophisticated – and self-regulated – approach to opting in to receiving notifications, as well as transparent opt-out options and complete control over when to stop receiving messages. One thing is certain, we live in the real world and want to experience the physical objects that are part of any AR experience. Companies that will lead the way in AR development will not only find a way to enhance the physical experience, but will also ensure that people stay grounded in the world around them. The good news for advertisers and their agencies is that now is the time for brands to get creative and find ways to utilize the power of data to create amazing AR experiences.

The original article was featured in the launch issue of BRAD magazine.

For more information please contact Jack Millership at jack.millership@gfk.com.