XR's Next Big Leap: How Brands Can Evolve to Meet Their Customers in a New Reality
Within a decade, we will see tremendous shifts to the way in which consumers perceive and interact with the world around us. The imminent upsurge in the extended reality (XR) market is upon us, and what our day-to-day realities will look like by 2030 is up to the collective ability of our imaginations.
Yet the lack of retailers experimenting with (and generally using) XR is perplexing. There were 1 billion people in 2020 who used augmented reality (AR) in some way, which led to 94 percent higher conversion rates for products that came with AR experiences. Still, as 2022 unfolds, only 1 percent of retailers are using AR in some fashion. Projections show that the global XR market is projected to grow at a compound annual growth rate of 45 percent between now and 2030, with a valuation expected to exceed $1.1 trillion (yes, with a "t") in that time.
So why the dramatic disconnect? Despite Meta (formerly Facebook) and Microsoft charging forward with their solutions, and big names like Wayfair, Ikea, and now Nike experimenting with interesting applications of emerging technology, most brands are simply unsure where to begin and are unprepared for what’s next. They don’t have the knowledge, don't see the immediate value, or don’t have the bandwidth.
What are too many brands still focused on instead? You guessed it: social media.
Why Pivot From Social Media Spend
With 25 percent year-over-year growth in social ad spend, what was once the vanguard of digital advertising has now become a corporate security blanket. That’s not to say it’s all worthless — it’s still driving more than half of Gen Z’s impulse purchases, after all. However, Gen Z has a growing disillusionment with social media, which is an increasingly negative, isolated experience.
These days, 58 percent of Gen Z express the desire to cut back on time spent on social media. Instead, Gen Zers want to have fun in the metaverse where they can play, socialize and enter digital spaces. According to a National Research Group study, 51 percent of Gen Z identify AR as "very important for entertainment and social connections."
Reading the tea leaves, brands will realize that people want to take back control of the tech in their lives with meaningful and rewarding experiences that provide brand and customer value. That’s why companies need to start pivoting away from social media advertising. People are scrolling past as brands spend wads of cash on consumers who aren't really interested.
Social media and e-commerce strategies may be working for now, but make no mistake: Oversaturation will soon bog down e-commerce just like social media. Brands need more differentiation than that.
Why Pivot Toward Immersive AR and VR
The good news is that with the correct planning, immersive AR and virtual reality (VR) technology can exceed expectations.
Ahead of Paris Fashion Week in 2019, for example, LEGO Wear and Snapchat launched a virtual clothing store to promote the toy brand's first limited-edition clothing line for adults. Though the AR pop-up store was physically empty of everything but a plinth-posted Snapcode (aka, the company's in-app QR code), the Snap-triggered portal allowed shoppers to enter a virtual shop with an interactive DJ booth, LEGO bouncer, arcade machine, and, most important, exclusive products for purchase, according to Forbes.
Other brands that are taking the plunge into XR experiences include L’Oreal and Sephora, which both utilize AR to enable XR customers to virtually try on beauty products. Ikea uses the technology to allow customers to daydream exactly what certain items will look like in their living spaces. These types of dynamic experiences will only increase in ubiquity and quality.
Now's the Time
Moving forward, future-proof companies will need real XR strategies to shape their brand image and build awareness around their products, brand ethos and values; to not do so will inevitably cause detriments as small as lost opportunities and as large as shutting down entirely. And that’s what’s most exciting, isn't it? The convergence of these trends to forge new dynamics with social spatial experiences and commerce.
The next industrial revolution doesn’t have to happen overnight, but brands can start with some easy, bite-sized tactics to gain a competitive edge — from evolving their approaches to marketing and digital asset creation to 3D asset development and a spatial strategy.
If a brand hasn’t integrated basic XR elements into their e-commerce or marketing experiences, now’s the time. By starting to build equity in the space, companies can begin earning the trust of the next generation while learning their own organizational lessons about which paths may or may not work for them.
Huge opportunities lay dormant within this new frontier. And that’s why brands must take note. You can make a stronger impact than ever before and help customers, employees and users worldwide make better-informed purchases and decisions — all while having a better time doing it.
Lucky Lance Gobindram is the general manager of CemtrexLabs, a full-stack, creative technology lab specializing in web and mobile development, user experience design and innovative engineering services.