Real Business Value from Virtual Reality
The long road to virtual reality
Virtual reality (VR) creates a virtual environment in which a user can interact with objects similar to those in the real world, providing a fully-immersive experience. In today’s parlance, VR generally refers to a device that wraps around your head, completely blocking out your audio and visual fields, and projecting a computer-generated reality onto your eyes and ears (e.g., Oculus, HTC Vive, etc.), but there are varying ‘degrees’ of VR, such as augmented reality (AR) and mixed reality (MR). AR provides a view of a physical, real-world environment with elements that are augmented, typically using a mobile device (smartphone, tablet, etc.). MR is the merging of real and virtual worlds to produce new environments and visualizations where physical and digital objects co-exist and interact in real time.
VR has been around for a long time — from Sensorama in the ‘60s to computerized flight simulators in the ‘70s, to VR arcades in the ‘90s, to the plethora of virtual reality devices and games available today. While games continue to be the biggest revenue driver for virtual reality today, the enterprise market for VR (in its many guises) is rapidly growing.
Recent trends—including declining costs of headsets, improving bandwidth, and cloud computing—are converging to make it feasible for organizations across industries to create and deliver immersive digital experiences that solve real-world problems. Today, virtually every industry (no pun intended) is investing in VR, including ecommerce, healthcare, travel, manufacturing, and real estate, to name a few.
Much like Digital Transformation writ large, virtual reality is a confluence of myriad, advanced hardware/software technologies — head-mounted displays (HMDs), gesture-tracking devices, video/display walls, projectors, etc. Advances across these technologies have taken VR mainstream.
VR on the rise
Given the degrees of VR and the multiple technologies involved, it is difficult to achieve a consensus on the overall VR market size, but the following pundit predictions certainly paint a bright future:
- The research company SuperData Research reports that annual VR revenues in 2018 reached a higher-than-expected $3.6 billion, representing a 30% year-over-year increase. For 2019, SuperData predicts revenue will reach $11.5B for the virtual, augmented, and mixed reality markets.
- Oracle projects VR sales are projected to grow rapidly to more than $28 billion by 2020, with VR software sales leading the way.
- According to Orbis, VR could surpass $40 Billion by 2020.
- ResearchandMarkets expects the VR market to grow from $7.9 billion in 2018 to $44.7 billion by 2024, at a CAGR of 33.47%.
- Topping the list, Zion values the global augmented and virtual reality market at around $26.7 billion in 2018 and expects it to reach approximately $814.7 billion by 2025, at a CAGR of 63.01%.
- Games account for 43% of VR’s $1.2B of software revenue, according to Business Insider, but as more businesses look to tap the technology, enterprise VR hardware and software revenue will jump 587% to $5.5 billion in 2023, up from an estimated $800 million in 2018.
- IDC predicts that the virtual and augmented reality market will dramatically expand from just over $9 billion last year to $215 billion by 2021. That incredible 118% compound annual growth rate would make VR one of the fastest-growing industries on the planet.
VR value for sales/services
In their most recent report, Customers 2020: A Progress Report, the CX experts at Walker estimate that by 2020, customer experience will be the most important differentiator between brands, overtaking both price and product.
Improving customer experience is the number one driver of IT investments, according to CIO’s State of the CIO study. It is not incidental that improving the customer experience is also the prime objective of any intelligently – conceived digital transformation initiative.
At bottom, digital transformation is about much more than wielding the latest technology. True transformation is about capitalizing on the relationship between technology and customer behavior, and leveraging disruptive technologies to close the gap between businesses and their customers. In line with this, the immersive experience of VR holds great potential for how businesses can transform customer engagement, human collaboration, and business models.
Organizations across industries are exploring, prototyping, and implementing VR technology aimed at improving customer engagement, patient outcomes, employee training, product development, risk management, and more.
Merchants have begun using VR and augmented reality to improve the online shopping experience, create deeper emotional connections, and give customers a better feel for what they’re buying in a virtual environment. Automakers are looking to VR technologies to attract buyers, improve their time at dealerships, and form a stronger emotional attachment to a product they helped create. The application of VR in the Field Service space of the Automotive industry allows remote trouble shooting in 3-D and software updates to be pushed in real time, making it very cost-effective and efficient. Home Improvement customers can design their perfect bathroom or kitchen and then, using VR, walk into the finished space and experience it as a test drive.
For B2B marketers, immersive VR applications are useful when complex products and solutions are difficult to understand in conventional experiences (such as presentations, or even touch-screen modes). Communicating a business outcome for complex products and solutions is extremely difficult to demonstrate “live” in the real world with physical products or less tangible solutions (such as cloud computing, software data flows, electric grid re-routing, or molecular reactions). Demonstrating these complex solutions within a “virtual” immersive environment – such as a hospital, laboratory, data center, manufacturing plant, or oil refinery – that is contextually relevant to the user can be a highly effective way to help customers relate to what the product or solution is, how it works, and why it will benefit them.
Real estate is a great example of how VR is transforming an entire industry. Agents, investors, builders, and buyers alike are taking advantage of amazing VR tools. Developers are using VR to help buyers personalize and visualize un-built spaces, customizing layouts, color palettes, materials, furnishings, and lighting conditions. Using interactive 3-D walkthroughs of model homes, agents can market properties to geographically dispersed customers, or even start selling before a shovel hits the dirt. Potential buyers can quickly and conveniently virtually tour multiple properties and visualize how they might personally decorate any room or space. Everyone in real estate will soon be tapping VR technologies to ensure properties sell as quickly as possible for the best possible price.
Beyond the ‘gee-wiz’ factor and novelty buzz, VR provides an engagement-building, sensory rich experience for customers. The potential use cases for VR in business are virtually limitless. Virtual reality is about to become mainstream in business. That isn’t surprising given the new and exciting possibilities for engaging customers. Just about any process that can be carried out in the physical world and in business – from customer services to marketing, finance, HR, and production – can be simulated in VR. So, pick your real-world problem and put VR to the test!
Contact AST today learn how your organization can score real business value from virtual reality.