Augmented Reality's Impact on Business
AR is fairly new to the business world, its benefits and success rate are still not well known mainly because it is such a versatile technology for example, Ikea -- among other furniture companies, has taken advantage of this technology. For as long as Ikea has been producing assemble-yourself furniture to the masses they have been well in touch with the latest technology trends. They have pioneered in smart furniture designs that include Wi-Fi enabled lighting, wireless charging built into nightstands and as early as 2012, Ikea began experimenting with the then-new AR. At the time, AR was in its early development stages but Ikea saw an opportunity to bring its modern furniture design to people’s homes. Fast forward 5 years to September 2017, that very same idea got a make-over and was executed successfully to reach millions of smartphone owners through an app called “Ikea Place”. This app lets users sift through thousands of Ikea’s products and digitally place them in any room of the user's house, at scale. The usual process someone goes through when they want to buy a new furniture piece is going to the local store, getting the tape measure, a pencil, some paper, and a camera then making a decision if they don’t want to go back to see how the pictures they took compare with their house layout. Ikea knows this, and so they allow customers to shop in the comfort of their own home through its AR app. All the user has to do is place an Ikea catalog on the floor wherever they want to see furniture appear, pick a piece of furniture from the apps list of over 90 products and watch as it magically appears before their very screen. This may seem like a trivial offering on behalf of Ikea, but this is a big deal and a true indicator of one of the things that AR can do for businesses. For every organization, building engagement with customers is key in order to develop long-lasting relationships that translates to consistent profitable performance. By adopting the AR technology, Ikea was able to successfully tap into a major factor for engaging with customers—“Multi-sensory Engagement.” This involves getting customers involved in learning about and using an offered product in a way that is active including sight, touch, audio, and even smells. Studies have shown the more an organization appeals to the consumer in this manner the more likely the consumer is likely to consume. Ikea is able to do this by turning the potential customer’s own home or apartment and turn it into a virtual showroom and filling it with “what-if” furniture. This solves a major hurdle faced by many shoppers who wonder if that lamp they saw on a shelf at some box store will go well with their décor, etcetera. As these solutions continue to become mainstream, they start becoming expected by consumers and B2B buyers alike in their interactions with companies.
While many companies have already recognized the potential Augmented Reality can have on their business by luring more customers in through engagement, other companies that don’t rely on the sale of tangible goods have found another way leverage consumers’ quick embrace of augmented reality. Tech giant, Snapchat, has been widely known worldwide for several years offering a new social media platform in which communication is primarily done through the lens of their smartphones by sending both photos and videos that are supposed to live on the receivers’ Snapchat application originally for a limited amount of time. As this app became widely popular, mostly amongst teens and young adults, they began experimenting with AR. After establishing face filters through their smart lens that proved to be wildly popular for years, Snapchat unveiled the dancing hot dog. The dancing hotdog was Snapchat’s first Augmented Reality World Filter, it immediately rose to internet fame being featured in countless Snapchat videos sent by users along with videos posted on other platforms saved from Snapchat that show the processed meat dancing in funny and creative real-life areas. Promptly following the success of this AR filter, Snapchat announced that those engaging 3D AR filters that have proven to be popular can be used as ads. Warner Brothers and Bud Light were quick to recognize the potential and were the first two advertisers on this platform, and again it proved to be successful. These ads take the same form as Snapchat’s own AR filters, often featuring fun and wacky animations that are seen by millions. According to data provided by Nielsen, the average sponsored AR lens Snapchat ad increased advertisement awareness by almost 20 points and lifts brand awareness as a whole by 6.4 points. By offering this immersive ad format, Snapchat hopes to pull itself from missing revenue expectations and it seems to be working as more companies are being lured to advertise on Snapchat’s filters because in this scenario, consumers choose to engage with the company’s ad rather than seeing it as an obtrusion as has historically been the case for advertisements.
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