Trillions at Stake: AR’s Impact on Three Major Markets
“Honey, let’s paint the living room…”
Most of us know what happens next.
The drive to the hardware store ensues. You battle traffic. You mull over paint swatches.
You get home. You hold the swatches up to the couch, up to the drapes, to the rug, but you still can’t decide.
You need to see the whole picture.
Home Design Revelations: Powered by AR
Run that scenario back and add AR tech. You enter your living room. You pull out your smartphone. You open the Dulux Paints Visualizer app.
Aim your phone’s camera and choose a color and the app “paints” the walls of the room onto a picture on your phone.
You can easily see how colors match the whole of your decor with an accurate snapshot.
Don’t like the first choice… switch to a new color in seconds.
Twenty minutes later, you have your paint picked!
This is only a snippet of the possibilities we’re seeing in home design using AR tech. But major names like Ikea, Home Depot, Dulux, Zillow and others are already investing heavily to bring apps and experiences like this to consumers globally.
The king of all home design apps, Houzz, built their entire company around an AR design app. They secured $400 million in series funding this June and are now valued at $4 billion.
These types of numbers can’t be ignored. When major organizations invest millions in a single technology, it can only mean good things for those looking to ride this trend.
But the AR revolution doesn’t stop there.
Brick-and-Mortar Retail’s Saving Grace
It’s no secret brick-and-mortar retail has struggled to keep pace with online shopping experiences.
According to Statista, “In 2016, online sales of physical goods amounted to $360.3 billion.”
Yet despite the ever-increasing footprint of e-commerce, brick-and-mortar shopping is still preferred by buyers.
People still want to feel textures, assess size and scale. They want to try things on. Feel quality.
The U.S. Department of Commerce reported online sales accounted for only 8.1% of total retail sales for the year.
Retail sales topped $5 trillion in the U.S. last year. Even a small percentage reduction means millions lost.
But AR is already helping stem the hemorrhaging.
Using AR to merge the best aspects of online and in-store shopping, physical retailers could easily bridge the gap created by the new efficiencies of online marketplaces.
Consumer-side interest is also spiking.
Rachel Arthur of Fashion & Mash notes, Google finds that “34% of users say they would use AR while shopping, and 61% say they would prefer to shop stores that offer AR.”
AR is reinvigorating consumers’ most basic desires: to shop in-store for a complete experience.
Ikea, Sephora, Walmart, Target, Home Depot. The list of retailers investing heavily in AR goes on and on.
You’ll want in too.
The One Industry No One’s Talking About
The ad industry and marketing firms have watched TV ad revenue streams slowly dry up for years.
Ad blocking software, eroding TV viewership and a general disdain for being “sold to” are big contributing factors to TV’s ad revenue decline.
But people are still consuming tons of media.
Last year, American adults set new records of media consumption by ingesting 10 hours and 39 minutes of media per day.
It’s how people view their media that has changed.
The Internet Advertising Bureau (IAB) stated in their 2017 semiannual report that for the first time ever, digital ad revenue surpassed TV ad revenue.
This is monumental.
TV ad revenue mid-2017 was calculated at $71.3 billion. Companies feel the loss of even a few percentage points. As have investors.
There needs to be a way for companies to make up this loss. That’s where AR comes in.
Intelligent applications in AR marketing have already generated some very successful campaigns.
Toyota’s Shopping Tool app downloads increased by 600% after introducing an AR marketing campaign.
In total, it’s estimated by the end of 2017, there will be 3.5 billion AR apps downloaded worldwide.
This is translating directly into cold, hard cash for companies and investors.
If AR’s mega potential isn’t apparent yet, consider this:
Citi GPS estimates digital reality to become a new trillion-dollar market with annual revenues of $692 billion by 2025.
Smart investors follow the money and the money is in AR tech.
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