Isolated AR applications have been around for decades, but only recently have the barriers to entry and widespread adoption been overcome. The 3D design and user interface are complicated to develop, but as technology and technical skills increase around the world, design capability is multiplied and deepened. At its base, Augmented Reality allows users to view and interact with digitally superimposed images, animations, sound, and text overlaid onto the real world. At first, these interactions happened with mobile devices, but as the technology develops it will transition to hands-free wearables such as head-mounted displays or smart glasses.

Augmented reality has great promise in the world of digital realities. Unlike Virtual Reality, where users dive into a digitally generated world with no contact with the real world, augmented reality allows users to interact with the world they see. AR enables a new information-delivery process to the human brain, fundamentally changing the way data is structured, managed, and delivered on the internet. Traditionally information is accessed by the user on a 2D flat screen forcing the human brain to translate 2D information into 3D for use in the real world. This isn’t always an easy task to complete, but with the help of augmented reality, it becomes increasingly easier. By superimposing digital information onto real objects and environments, AR allows users to process both the physical and digital worlds simultaneously. This eliminates the need to mentally bridge the two. The result of this crossover between the real and digital world allows users to rapidly and accurately absorb information, make decisions, and execute required actions quickly and efficiently.

AR Key Capabilities

As technology becomes increasingly smart and connected throughout all sectors, both consumers and businesses can “monitor product operations and conditions in real-time, control and customize product operations remotely, and optimize product performance using real-time data” (Porter & Heppelmann, 2020). AR increases the value created by smart/connected devices, by allowing users to visualize and access all new incoming data, changing how they receive and execute instructions as well as guidance. The combination of new data and AR’s capabilities open the door for users to interact with products and systems in a revolutionary way.

Analytics & Visualization

The visual element of AR is indispensable when interacting with complex products or equipment. AR allows users to have an x-ray vision, revealing internal features that would be impossible to see otherwise. The US Army employs AR technology with an eyepiece called “Tactical Augmented Reality” which allows soldiers to locate the positions of their squad members, as well as enemy positions. The information provided by the TAR is essential to reduce friendly fire and casualties on any battlefield. The TAR also allows US soldiers to see how far a target is located and is expected to replace night vision goggles along with handheld GPS systems.

Figure 1: The United States Army AR Technology (Accessible in PDF Version) 

Instruction & Guidance

The instructive element to AR is where most businesses can extract the most value from the technology. Instruction, training, and coaching are critical functions to workplace productivity, yet are inherently costly and labor-intensive. Written instructions can be hard to interpret and time-consuming to finish. Instructional videos aren’t interactive and can’t adapt to individual learning needs and styles. In-person training is expensive and requires both teacher and student to be at the same location multiple times.

The traditional learning environment for businesses is slow and time-consuming, but these parameters change drastically with the introduction of guided augmented reality. AR addresses those issues by providing real-time, on-site, step-by-step visual guidance on tasks such as product assembly, machine operation, and warehouse picking. A Complex 2D schematic of a procedure becomes an interactive 3D hologram that walks the user through the necessary steps and procedures.

Boeing implemented AR in a case study to understand how effective it was as a tool to improve quality and productivity in complex aircraft manufacturing. AR was used to guide trainees through a 50 step process to assemble an aircraft wing section involving 30 parts. With the use of AR, trainees completed the assembly in 35% less time than trainees using traditional 2D drawings and documentation. The number of trainees with little to no experience that could perform the assembly correctly on the first try increased by 90%.

Figure 2: AR Goggles (Accessible in PDF Version) 

Improve Human Decision Making

AR has the unique capability to communicate specific details about the look and feel of a product that traditional photos cannot match.

Customers are better equipped to make more confident buying decisions, leading to increased satisfaction and stronger customer loyalty. 71% of customers say they would shop more often if AR was involved in the decision-making process. 40% of customers say they would pay more for a product if they could customize it through AR, as customers cannot see, touch, and feel the product from an online store. By using AR, the online store experience is drastically improved, leading to customers spending more on products that fit their needs and desires. AR allows customers to visualize 3D complex models of the products they’re interested in, increasing their total understanding of the product and how it works.

This is key as 39% of AR retailers use visualization for the consideration phase of the purchase-making process, leading to a 73% increased consumer satisfaction level.

Interactions

Traditionally physical buttons or interactive touch screens are used to interact with products and complex machinery. As most products become smart and integrated through the internet, mobile devices have become essential to control machinery remotely. Augmented Reality allows businesses to use virtual control panels directly superimposed onto the product and operate it using the AR headset. Hand gestures and voice commands are used to engage with the control panel without having to physically interact with the product. Improvements in movement and voice recognition are still being made, yet implementation can be seen across multiple industries. GE tested voice recognition software in factory workers performing complex wiring procedures in wind turbines, and they reached a 34% increase in employee productivity during this specific task.

Augmented Reality Across Industries

a. Award-Winning Airport App: The Gatwick Airport passenger application uses over 2000 beacons across Gatwick Airport to aid passengers through a 3D map of the airport including all retail service locations, information desks, bathrooms, and gate/terminal information. The application also serves as a data repository for incoming and departing flight information.

b. Ikea Place App: The Gatwick Airport passenger application uses over 2000 beacons across Gatwick Airport to aid passengers through a 3D map of the airport including all retail service locations, information desks, bathrooms, and gate/terminal information. The application also serves as a data repository for incoming and departing flight information. The Ikea Place app allows customers to scan their rooms and design the space by placing Ikea objects to create a new digital environment. This allows customers to understand which Ikea furniture fits in their room according to specific dimensions, as well as getting a visual understanding of what their room would look like using specific items. Customers can rearrange and select/drop items from Ikea’s vast catalog creating the opportunity for limitless variation.

c. Rolex: Rolex developed a virtual try-on technology that allows customers to see how a specific timepiece would look on their wrist without having to go in-store to try it on. This allows customers to try on the entire Rolex catalog, increasing the visibility of certain watches that aren’t as well known as their best-selling items.

d. Accuvein: AccuVein uses AR’s technology capabilities to convert patient heat signatures of a patient’s vein into a superimposed image on the patient’s skin. This makes veins easier for doctors and nurses to effectively locate patient’s veins and improves drawing blood and other vascular procedures. Using AR triples the likelihood of a successful needle stick on the first try and reduces the need for “escalation” by 45% (calling for assistance).

Future of Augmented Reality

The Augmented and Virtual Reality market size across the globe is expected to increase at an exponential rate for the next three years. As worldwide lockdowns continue and in-store experiences are limited, consumers will opt for AR experiences to increase their understanding of the products they’re interested in. Currently, China leads the way in AR development and spending followed closely by the United States. Both countries outspend the rest of the world combined and will be the major players in capturing market share.

Figure 3: Forecasted Spending Globally (Accessible in PDF Version) 

Worldwide spending on AR is forecast to be $18.8 billion in 2020, an increase of 78.5% from $10.5 billion in 2019. The latest update to IDC’s Worldwide Augmented and Virtual Reality Spending Guide shows that worldwide spending on AR/VR products and services will grow continuously throughout the 2019-2024 forecast period, achieving a five-year compound annual growth rate (CAGR) of 77.0% . Augmented reality is expected to grow significantly in the years to come, creating opportunities to invest and grow as a business.

Figure 4: Worldwide Market Size (Accessible in PDF Version) 

Worldwide spending on AR/VR solutions is led by the commercial sectors which will grow from less than 50% in 2020 to 68.8% in 2023. The commercial industries are expected to outspend all other industries, with retail spending the most at $1.5 billion followed by manufacturing at $1.4 billion. Commercial use will account for nearly half of all AR/VR spending in 2020, led by training ($2.6 billion) and industrial maintenance ($914 million). Consumer spending is led by two large use cases: VR Games ($3.3 billion) and VR feature viewing ($1.4 billion).

Figure 5: 2020 Market Share (Accessible in PDF Version) 

Opportunities

Augmented reality has multiple applications and uses cases that improve both the consumer and business experience. Whether it be animating new 3D landscapes for consumers to understand products better or allowing company employees to better interact with their products and machinery. Businesses focused on retail sales have much to gain from employing augmented reality in their business processes, as e-commerce increases worldwide, being able to showcase your product catalog in 3-D greatly benefits both the consumer experience and the business sales growth. Users can spend more time with the product and interact with it from the comfort of their homes. Companies using complex machinery can take advantage of augmented reality’s ability to instruct and guide employees through laborious procedures and intricate assembly. A 3D interaction with machinery builds clearly shows employee’s mechanical inner workings and cable connections. The power to teach and tutor employees more effectively than traditional methods of learning is critical to business development. Universities can employ AR technology to further their students’ understanding and make learning more interactive in the sciences. Countless opportunities that bring competitive advantages are created for businesses as the technology matures, offering more customization on how to apply augmented reality into their business processes to create valuable change.