Augmented Reality & Business: Bridging Virtual & Physical Gaps

By blending the physical and digital worlds, augmented reality allows us to participate in and benefit from both.

January 2018

DIGITAL BUSINESS

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EXECUTIVE SUMMARY

Digital technology is quickly evolving – enabling businesses to continually reinvent themselves.

Heads-up displays with early forms of artificial intelligence (AI) have compelled organizations

to experiment with tools that tap into the possibilities of augmented reality (AR). By overlaying

digital information and objects “on top” of physical environments, AR has the potential to take

consumer interactions to the next level.

While augmented reality remains in the experimentation phase for most companies,

research tells us that the market is expected to grow as quickly as smartphones and tablets.

Market Watch estimates that the AR market will increase from USD 2.6 billion in 2016 to

80.8 billion by 2022.1

Although AR is typically viewed as “gee-whiz” entertainment-oriented technology, it is much

more than that. Pioneers see it as a way to significantly change how we communicate and

share information in a consumer business context. However, as with any new technology

that enables brands to connect with customers, AR must remain relevant to consumers’

needs and interests while anticipating and keeping pace with new developments.

Despite optimistic market projections, broader adoption of AR is expected to be gradual –

primarily because enterprises tend to rely on the success of technology in the consumer

market before turning their attention inward. Pokemon Go’s worldwide success can be

traced to its innovative use of augmented reality. Such achievements in the consumer space

changed how enterprises look at AR and motivated them to explore its business potential.

For example, a U.S.-based pizzeria used social marketing with AR to invite customers to

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download an app to set up a Pokemon Go zone. This initiative led to a 30% spike in food and

drink sales over typical weekends.2

In our view, augmented reality is maturing in ways that will support internal and external

experimentation. Microsoft HoloLens and Meta Vision have released developer kits for

enterprises to test the technology and gain mindshare – underscoring the need to explore

how AR evolves. So far, virtual reality is leading mass market adoption, predominantly due

to the large-scale availability of low-cost VR devices. Yet according to Gartner, the business

potential of augmented reality has increased through improvements in location services

and image recognition – enabling enterprises to use it as an internal tool to complement

and enhance business processes and workflows.3

As a result of these developments, a support infrastructure is emerging. Non-profit

organizations such as Augmented Reality for Enterprise Alliance (AREA)4 with its 1000-plus

labs are working to assist AR-enabled enterprises. To accelerate AR adoption, AREA

members write a series of blogs that share insights and tips on the emerging AR-assisted

enterprise. The company also hosts a series of domain-focused events.

We advise businesses to integrate AR into their existing processes, as well as their internal

systems environment, to realize AR’s full potential and value. At the same time, companies

should view AR as a future-focused technology, rather than an immediate solution for

closing process gaps. In this white paper, we present opportunities that enterprises can take

advantage of today. We also examine how integrating AR into an existing work environment

can enhance and unify communications, enrich learning and skills, and deepen knowledge.

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Outlining the Enterprise Opportunity AR augments the physical world with digital information, whereas virtual reality (VR) replaces it.

Applications for augmented reality are manifold. Over time, AR is expected to play a key role in a

variety of production and assembly processes; for example, providing support for those working on

individual custom products made in “mom and pop” shops or by specialized welders. At the other end

of the spectrum, augmented reality can potentially play a role in high-volume, low-mix manufacturing

in factories with automated and specialized machines.5

Innovative companies such as Ikea, Mitsubishi, Toyota, and Lego have explored various ways to

showcase the prowess of AR-based solutions. Figure 1 details how these businesses are leveraging

augmented reality for marketing purposes.6 Figure 2 on the next page lists their high-level goals.

PROBLEM• Digital catalog not

enough Incentive• Stagnant user base • Huge amounts of

media to manage

GOALS• Enhance distribu-

tion of IKEA catalog• Get new users • Increase downloads• Motivate customers to

visit store

RESULTS• 43 pieces of aug-

mented or activated content

• More than 5 million downloads

• 30% are new users• 35% more scans on

weekends• 211 million catalogs

distributed

PROBLEM• Redundant and cost-

ly market practices• Once removed from

customers through contractors

• Customers have trouble understand-ing products.

GOALS• Increase market share• Equip contractors with

sustainable marketing and sales tools

RESULTS• 500 contractors

registered• Eliiminates marketing/

sales redundancies • $50 mm sales

increase• Reduced printing cost

by millions

PROBLEM• Toyota shopping tool

nonexistant• Corolla sales low among

young car buyers• Disinterested

demographic • Toyota not seen as a

digital brand

GOALS• Drive sales leads to

Toyota Dealerships• Engage young

demographic• Drive website traffic and

app downloads

RESULTS• 60O% lncrease TST

app downloads• Corolla leads jumped

by 30% • Traffic to Carolla Miku

website increase by 167%

PROBLEM• Sluggish toy market• Recovering consumer

economy• Traditional analog

brand

GOALS• Enhance branded

shopping experience• lncrease sales in

branded stores • Actiivate community

and brand advocates

RESULTS• Sales increased 17%

in 2011• Positively influenced

purchase decisions (according to statistical analysis)

• Insipred countless user-generated videos and photos and other WOM media

2013 IKEA CATALOG APP

MITSUBISHI ELECTRIC

TOYOTA SHOPPING TOOL

LEGO DIGITAL BOX

Figure 1

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Figure 2

ENHANCING DISTRIBUTION

ACQUIRING NEW USERS

MOTIVATING CUSTOMERS

INCREASING MARKET SHARE

EQUIPPING WITH

MARKETING AND SALES

TOOLSDRIVING SALES LEADS

ENGAGING THE

AUDIENCE

DRIVING WEBSITE TRAFFIC AND APP

DOWNLOADS

ENHANCING BRANDED SHOPPING

EXPERIENCE

INCREASING SALES

ACTIVATING COMMUNITY

& BRAND ADVOCATES

GOALS

THE MANY FORMS OF AUGMENTED REALITY

MAR (mobile augmented reality) solutions are designed for mobile devices, such as smartphones, as

well as for tablets and/or wearables.

A rudimentary form of AR are heads-up displays, or HUDs, such as Google Glass, Moverio, and Daqri AR

helmet, which simply display information on a small screen near the user’s eyes. Microsoft’s HoloLens

and Metavision’s Meta 2 are a more advanced form of AR, sometimes referred to as mixed reality, in

which the technology places digital objects into a user’s field of view where they can manipulate those

items. These objects are also called holograms. For example, in one Microsoft HoloLens demonstration,

wearers build digital Minecraft structures on a real, physical table placed in front of them.7

Setting High-Level Goals

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THE VALUE OF AUGMENTED REALITY

Market watchers have yet to quantify AR’s true enterprise value; however, that is expected to change

in the near future as consumer success stories and cheaper devices emerge. From enabling seam-

less collaboration to reducing product design iterations, augmented reality will soon be embedded in

everyday work life. As we write, we see signs of the momentum building:

• More than 150 companies in multiple industries, including 52 of the Fortune 500, are testing or

have deployed AR/VR solutions.8

• Venture Capital and corporate investments in AR/VR start-ups totaled $2.3 billion in 2016 – an

increase of 230% from the previous year.9

• New AR/VR hardware from at least five companies, including Microsoft and HTC, hit the market in

the last year, with some of these products targeting enterprise use.10

Businesses Applications

Interactive Printing

Having customers engage with a product is the key goal of any marketing plan. In the case of aug-

mented reality, its immersive capabilities are a prime selling point for consumers and enterprises

alike. Take interactive printing techniques. Companies can release promotional materials, such as

brochures, paper print ads, flyers, banners, and billboards, that can then be scanned through an app.

With a single scan, customers can unlock an entire collection of augmented products, then place and

position them in any space at any time. As such, AR helps companies connect with their customers in

entirely new ways.

Interactive printing techniques can be used to:

• Give customers more buying power by simulating products before the purchase.

• Present/pitch concepts for complex projects.

• Generate leads.

Empowering Sales Personnel

Demonstrating products and ideas will be easier with AR. Imagine a sales representative asking a

vendor to stock his company’s energy bars. Augmented reality can help the sales rep showcase the

Augmented reality will influence health care in many ways – from how medical students learn about the human body, to consults with doctors in remote places...

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nutritional values of the product, check available inventory, and refer to real-time sales data – all relayed

as information and intelligence to the vendor while helping the salesperson close the deal faster.

Another case in point: A sales representative wants to help a customer set up their store. Using an AR

solution, the sales rep helps the customer to visualize how merchandise displays can be positioned

in the store – enabling the vendor to better assist customers regarding product placement, and make

maximum use of space and visibility.

Domain Based Digital Data Applications

Healthcare

Augmented reality will influence health care in many ways – from how medical students learn about the

human body, to consults with doctors in remote places via conference chat, to less-invasive surgeries

that enable physicians to “look” into a patient without making an incision. AR/VR applications are also

a good fit for therapies that counsel patients on how to cope with conditions such as post-traumatic

stress disorder (PTSD), pain management, and engage in rehabilitation.11

Design/Architecture

One of the key challenges for designers and architects is finding a way to experience the physical

spaces, structures, and objects they create. Today, most create 3-D objects on 2-D screens. AR will

allow designers to visualize 3-D content while they design it in 2-D and, just as important, display their

work to prospects and clients in a comprehensive way.

Logistics

Improving efficiencies and safety for workers is a key requirement for running warehouses. An AR

application can lead a warehouse worker safely and quickly to the exact location of an item and

remove it for shipping. The warehouse system removes the item from inventory then sends it to a

designated location for packing and shipment. GE has experienced productivity gains across seven

of its business units by employing AR-based technology. Warehouse order fulfillment tasks were

completed 46% faster, since workers did not have to refer to a workstation. They simply pulled up

inventory information on their smart glasses.12

Manufacturing

Imagine a company with multiple factories in different locations, but just a few mechanical engineers

to keep the lines running inside those plants. With AR, the company could equip technicians in each

plant with AR technology – allowing remotely located mechanical engineers to view and interact with

the machinery from wherever they happen to be. AR headsets can also serve up blueprints, instruc-

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tions, and real-time data – freeing workers to perform tasks hands-free.

Aerospace

Industrial AR applications can increase agility and drive competitive differentiation. A recent example

is Boeing, which uses AR glasses to guide technicians as they wire hundreds of planes each year. As a

result, the company reduced production time by 25% and lowered error rates to nearly zero.13

Services

Services are the most likely area for consumers to have their first exposure to high-end AR tech-

nology. Imagine a situation where you can rent both the tools for completing a home-improvement

project, as well as the AR equipment that allows you to access an expert who can walk you through

the more complicated steps.

Consumer Applications

Sampling Products

Augmented reality is a great proposition for commercial and retail players, since differentiating the

shopping experience is more important than ever. Many companies, such as Nike, Converse, GAP, and

Ikea14, offer AR-based solutions via mobile apps that enable consumers to visualize products in realistic

3-D. They can visualize items in the physical store online, from wherever they are. For example, a shop-

per planning to buy a coffee table or sofa can see the lifelike 3-D projection of the merchandise, and

move around the space to view the product from various angles. This experience is a game changer for

consumers since it gives them more convenience and more control over their shopping choices.

Enhancing the Customer Experience

Imagine walking into an unfamiliar environment, such as a museum. Using the museum’s AR-based

navigation system, you can receive a guided tour of various areas of the museum and access infor-

mation about its exhibits – adding another dimension to virtual interactivity and enhancing your

experience in the museum.

Brick and mortar stores can also combine technologies to create a unique in-store experience and

opportunities for direct marketing. For example, retail enterprises are working to enable a seamless

shopping journey by connecting with their customers at different touchpoints. A customer looking to

purchase a couch can visualize the 3-D augmented version of the item in their home using a smart-

phone. Through the smartphone’s location services, the shopper can find out where the product is

available and how to get in touch with the retailer. When the customer walks into the physical store,

sales personnel are already aware of what the customer wants to purchase. Meanwhile, the smart-

Integrating AR with technologies such as beacons and RFID can help brands personalize and distinguish their services.

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phone app uses indoor navigation technology to guide the customer to the area inside the store

where the couch is located. In large retail stores, where finding a product can consume a lot of time,

a seamless transition from home to store is a welcome change.

LOOKING AHEAD: AR’S PATH FORWARD

The quickly evolving technologies of AR, VR, AI, predictive analytics, and robotics promise to dramati-

cally alter the business landscape. These technologies – once the stuff of science fiction – have earned

acceptance and a seat at the table in enterprise environments through their validated business impact.

We believe that for businesses adopting augmented reality, the technology must deliver credible busi-

ness value to users. It cannot be force-fed. Many existing point solutions do not contain any redeeming

business value, nor give users enough reason to buy or try again – defeating the purpose of adopting

AR technology in the first place.

The impact of the technology must be a few bars above the traditional forms of brand engagement

practices. Google Tango is a good example. It captures the depth of information, senses physical motion,

contextually maps the physical space around it, and stores the information so it can be easily recognized

later. This capability elevates the concept of experiencing augmented reality and enhances its value

proposition. There are limitless applications for augmented reality. For the purposes of this paper, we dis-

cussed only a few. AR can fit seamlessly into existing applications and platforms, including gamification

for customer engagement, AR applications, social media-based marketing, and enterprise collaboration

for unified workplace communications (e.g., Microsoft HoloLens for assessing insurance risks).

We believe that the future of shopping is highly dependent upon customers leading the way on the

path of their choice. Integrating AR with technologies such as beacons and RFID can help brands per-

sonalize and distinguish their services.

Businesses are always looking to bring more value to the table. Augmented reality can bridge the gap

between customer expectations and business products and services. Although this is an over-simpli-

fied way of viewing the AR roadmap, it is nonetheless imperative that companies combine the best

aspects of the virtual and physical worlds to generate new, engaging, interactive, and personalized

experiences that benefit both customers and the business.

We believe that the future of shopping is highly dependent upon customers leading the way on the path of their choice.

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ABOUT COGNIZANT DIGITAL TECHNOLOGY LABS

Cognizant Digital Technology Labs is a technology-driven unit focused on delivering digital experi-

ences to customers. Here, we enable new and interactive experiences that draw strengths from the

Internet of Things (IoT). We aim is to build capabilities for leveraging the endless opportunities in the

digital space and its impact in the future in faster, better, and more innovative ways. We explore and

create new experiences using connected things, sensors, wearables, emerging tactile interfaces, and

more.

Our lab experiments traverse internal and external stakeholder experiences. We build solutions that

use existing digital data and bring them into an experiential review state. We also build concepts

”from scratch” to create an immersive virtual world that allows users to interact in the most natural

way possible.

Our strategic initiatives are designed to:

• Explore and prepare for technologies of the future.

• Power technology-driven transformations.

• Establish a technology culture.

• Accelerate adoption of technologies and competencies.

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FOOTNOTES

1 “Augmented Reality Market: IoT AR to Reach $7 Trillion by 2027.” http://www.marketwatch.com/story/augmented-reality-

market-iot-ar-to-reach-7-trillion-by-2027-2016-10-03-82033156

2 Your small business can benefit from the Pokémania. https://www.jefferson-bank.com/your-small-business-can-benefit-from-

the-pok%C3%A9mania/

3 Gartner Says Augmented Reality Will Become an Important Workplace Tool. http://www.gartner.com/newsroom/id/2649315.

4 AREA. http://thearea.org/

5 NEW AUGMENTED REALITY CASE STUDIES SUGGEST PRODUCTIVITY IMPROVEMENT. http://thearea.org/new-augment-

ed-reality-case-studies-suggest-productivity-improvement/

6 Augmented Reality Marketing. https://dev.metaio.com/fileadmin/user_upload/19-_Marketing_7.18.pdf

7 Augmented-Reality Enterprise Opportunity. http://recode.net/2016/02/01/the-augmented-reality-enterprise-opportunity/

8 4 enterprise IT trends for the second half of 2017. http://www.ciodive.com/news/4-enterprise-it-trends-for-the-second-

half-of-2017/446539/

9 “Record $2.3 billion VR/AR investment in 2016.” http://www.digi-capital.com/news/2017/02/record-2-3-billion-vrar-invest-

ment-in-2016/#.WQCB3M-GP4Y

10 “HTC Vive ‘Business Edition’ targets enterprise with $1200 VR kit.” http://www.techrepublic.com/article/htc-vive-business-

edition-targets-enterprise-with-1200-vr-kit/

11 Augmented-Reality Enterprise Opportunity. http://recode.net/2016/02/01/the-augmented-reality-enterprise-opportunity/

12 “Industrial AR Developer Upskill Secures Funding to Improve Workforce Efficiency.” https://augmented.reality.news/news/

industrial-ar-developer-upskill-secures-funding-improve-workforce-efficiency-0176952/

13 “Upskill and Boeing.” https://upskill.io/landing/upskill-and-boeing/

14 Top Ten AR Apps in the History of Mobile. https://www.intellectsoft.net/blog/top-ten-ar-apps-history-mobile

ACKNOWLEDGMENTS

Special thanks to Cognizant Global Technology Office’s Vijay Venkataraman and Joseph Tobolski for their invaluable feedback

during the writing of this paper.

MaheshVenkatasubramanianSenior Business Analyst

Mahesh Venkatasubramanian is a Senior Business Analyst in the

Digital Technology Labs’ portion of Cognizant’s Global Technology

Office. He works on consulting projects in the immersive space

across industries. He has 10-plus years of progressive experience

in business development and account management, and received

an MBA, with specialization in marketing, from XIME, Bangalore. He

can be reached at Mahesh.Venkatasubramanian@cognizant.com.

LinkedIn: https://www.linkedin.com/in/maheshvs/

ABOUT THE AUTHORS

COGNIZANT BUSINESS CONSULTING

With over 5,500 consultants worldwide, Cognizant Business Consulting offers high-value digital business and IT consulting services that improve business performance and operational productivity while lowering operational costs. Clients leverage our deep industry experience, strategy and transformation capabilities, and analytical insights to help improve productivity, drive business transformation and increase shareholder value across the enterprise. To learn more, please visit www.cognizant.com/consulting or email us at inquiry@cognizant.com.

ABOUT COGNIZANT

Cognizant (NASDAQ-100: CTSH) is one of the world’s leading professional services companies, transforming clients’ business, operating and technology models for the digital era. Our unique industry-based, consultative approach helps clients envision, build and run more innova-tive and efficient businesses. Headquartered in the U.S., Cognizant is ranked 205 on the Fortune 500 and is consistently listed among the most admired companies in the world. Learn how Cognizant helps clients lead with digital at www.cognizant.com or follow us @Cognizant.

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