BrainTrust Query: Augmented Reality – The Impending Battle for Digital Real Estate

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Sep 28, 2010
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Commentary by Doug Stephens, President, Retail Prophet

Through a special
arrangement, presented here for discussion is a summary of a current article
from the Retail Prophet Consulting blog.

As augmented reality increases in
usage, could we see potential turf wars between physical retail businesses
and digital businesses vying for consumer attention in the same locations?

Augmented
reality is the layering of digital information onto real life objects and places.
These digital content layers are viewable with computers or smartphones
and may take the form of text, video, or images. While still very much in
its infancy, examples of augmented reality are turning up sporadically in the
consumer market. Lego, for example, has incorporated the technology into some
of its packaging, allowing consumers to not only see what a particular Lego
box contains but also to view a moving virtual model of the completed set via
in-store kiosks.

Location-based augmented reality requires that the user actually
be in a particular location in order to interact with the digital content positioned
there. With some basic web programming skills, almost anyone can create digital
content and place it just about anywhere in the physical realm, including some
of the most prestigious shopping avenues in the world. French clothing brand
Hostage Wear, for example, has opened over 20 A/R shops in some of the world’s
best known venues including Piccadilly Circus, Red Square, Venice Beach and
Madison Square Park.

All this raises some mind-bending questions about the eventual
meeting point between digital content and physical location.

“I look forward to these kinds of challenges,” said Maarten Lens-Fitzgerald,
co-founder of Layar, a pioneer in the field of mobile augmented reality. “It
will mean that the virtual space is valuable.”

Layar currently has one
million active users worldwide and, according to Mr. Lens-Fitzgerald, is growing
at a dramatic pace. With over 3,000 Layar developers worldwide, the potential
for rapid escalation in the number of augmented reality projects is significant.

So,
could we see a time where digital space associated with a specific location
is bought and sold like physical real estate? From Mr. Lens-Fitzgerald’s
point of view the answer is no. Given that there are no limits to the amount
of digital content that can be associated with a particular location, he does
not foresee digital space having the same finite characteristics as real estate. 
However, he does see augmented reality advertising space being sold in and
around specific high traffic geographic locations.

And what can retail brands
do to stake out the digital space around their locations? Mr. Lens-Fitzgerald’s
advice is: “Not to approach the
issue from a defensive position.” He maintains that brands should be
developing augmented reality experiences now. The advent of mobile applications
that organize nearby A/R content according to popularity and relevance, low
quality A/R content and experiences will simply fall to the bottom of the list. 
In the end, he maintains, whoever “owns the best A/R experience” will
win.

Discussion Questions: How will the collision of the physical and virtual
worlds redefine retail real estate — especially on the world’s
most elite shopping avenues? Should retailers be preparing to use augmented
reality?

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13 Comments on "BrainTrust Query: Augmented Reality – The Impending Battle for Digital Real Estate"


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Max Goldberg
Guest
10 years 7 months ago

The virtual and actual worlds need to co-exist. They need each other and both are better due to the presence of the other. Virtual can enhance real world and real world inspires consumers to participate in virtual.

Augmented reality is in the early stages for retailers and brands. Over the coming years we will see more and more applications for AR. Some will succeed, many will fail. The most successful will be those that consumers find easiest to navigate, are the most useful and, most importantly, offer high value to consumers, both monetary and practical.

Paula Rosenblum
Guest
10 years 7 months ago

No rest for the weary. More and more sophisticated technologies will come available for consumers and retailers will have to stake their claims in each “space” to keep up.

Augmented reality, sixth sense, things I haven’t thought of yet…it’s all coming. I’m really glad I’m not a CIO anymore, and really excited to be watching it all happen from afar.

Paul R. Schottmiller
Guest
Paul R. Schottmiller
10 years 7 months ago

There have been lots of interesting examples out there but no real killer apps yet. I really liked the BMW example where it walked you through fixing a car (search Augmented Reality and BMW on YouTube). Seeing 4G approaching and adoption curves for smart phones, coupled with location and gesture recognition capabilities, we can expect plenty of AR innovation in the coming years. For retail, look for AR to continue the trend of delivering more and more information from the virtual world to create new physical shopping experience.

Cathy Hotka
Guest
10 years 7 months ago

If augmented reality is interesting now, just wait until everyone is using HTML 5, which supports video playback and drag-and-drop. Location-based services could be hugely helpful for physical businesses that want to entice customers to visit.

Dan Berthiaume
Guest
Dan Berthiaume
10 years 7 months ago

Retailers definitely need to start preparing for AR now. While a hard ROI is currently difficult to obtain, the “soft” benefits in terms of the wow factor and branding are substantial. The world is not getting less digital as time progresses, and retailers need to adjust ahead of the curve, rather than behind the curve as they typically have in the past. Also AR packaging, which has been used by toy manufacturer Lego among other consumer goods companies, is another intriguing and growing area of AR.

Ed Rosenbaum
Guest
10 years 7 months ago

Augmented Reality sure brings a new meaning to the future of window shopping, doesn’t it?

David Polinchock
Guest
David Polinchock
10 years 7 months ago

During the recent RAMA CMO Summit, I led an afternoon workshop with the group where they had to re-imagine retail. The question was, “If you were building physical retail today for the very first time, what would it look like? How would you incorporate the digital tools we now have, in addition to things like drop shipping?” We got some very interesting starts and we’ll be exploring this idea further with RAMA throughout the year. I’ll certainly share what I can.

The key with AR technology is that it will be used more and more by consumers and retailers. We really need to look at how all of these digital tools will impact the physical space.

Bill Bittner
Guest
Bill Bittner
10 years 7 months ago
For retail IT to help business execution requires an accurate model of the real (physical) world. Without an accurate inventory, an accurate fixture database, an accurate backroom inventory, etc., none of the recommendations made by a retail application will be correct. GIGO (Garbage In, Garbage Out). Far from any sort of conflict, I feel the mashup between the virtual and physical worlds provided by augmented reality is exactly what retailers need to improve their execution. Augmented Reality provides an easy way to ensure plans are executed as expected and that the computer model reflects reality. Pictures of shelf fixtures will allow merchandisers to confirm planograms are in place (and their fixture database is accurate). Pictures of the parking lot will allow front-end schedulers to keep lanes staffed. Pictures of store fronts will assure signage is accurate. Pictures of damaged merchandise will eliminate reclaim disputes. There are probably hundreds of other uses that can come from having the data on hand to make augmented reality work in the retail channel. When you think about the shopping… Read more »
John Bajorek
Guest
John Bajorek
10 years 7 months ago

Augmented reality provides additional opportunity for consumer engagement without additional clutter in-store or in-aisle. Companies like Adidas, and Doritos have created successful campaigns using AR and a consumers home computer and Legos recent in-store test has proved successful and is now being deployed on a broader scale. As consumer adoption and technical capabilities merge we will see more opportunity for AR delivered through a person’s smart phone–introducing a new digital dimension to in-store retail.

Bill Hanifin
Guest
10 years 7 months ago

Supplementing the shopping experience in store with an AR display would be a good way to provide product capability, demo, recommendation and create engagement.

To know if the digital space is something to compete for, I would have to ask questions about how AR is delivered. Isn’t the source the web domain and presence of the retailer? If so, the question becomes how big a cloud the retailer projects and whether that would overlap or interfere that of a neighboring store.

All of this is great, but we as humans are maybe best at creating the technology. Figuring out how to use it to get results is quite another matter and I would like to see demonstration of how AR beats holographic displays (price?), in-store kiosks (cool factor?), and just plain old offers via location based services (or does it?).

Tim Henderson
Guest
Tim Henderson
10 years 7 months ago

Rather than a “collision” of the physical and virtual retail worlds, I’m inclined to believe this will be more of a gradual melding of the two–and a further erasing of the line between shopping in the physical space and shopping virtually.

Retailers and other brands should most certainly be preparing for much wider use of A/R across the retail landscape. But where the focus should be is on gaining an understanding of A/R and then finding ways to use A/R to enhance the shopping experience. Worrying about virtual real estate right now seems virtually impossible without knowing how A/R can be used to build the brand and engage consumers.

Herb Sorensen
Guest
10 years 7 months ago

Tim Henderson has this right. It’s what I refer to as the Convergence of Online, Mobile and Bricks-&-Mortar (COMB) retail. Retailers do NOT own the electronic waves in their stores! As of now people can talk at will in the store to whomever they wish, anywhere in the world. Ditto for Internet access. Ditto for AR. Retailers are losing control of their own space, and can do very little about it. They will have to compete with 3rd parties and suppliers for communication with their own shoppers. And it can’t happen too soon! 😉

Michael Dusing
Guest
Michael Dusing
10 years 7 months ago

I agree with most of the comments above. It is key to note that AR is here and will continue to grow in the future. Although everyone likes to peg AR as in its “infancy” the technology has been around for 20+ years. At this point in the game you can execute any promotion you can think of, it simply requires working with the right people.

The true value of AR in my opinion lies in the enhancement of the physical. I don’t believe there is a turf war so much as a goal of education. AR allows the retailer or marketer to provide the consumer with the information they desire at the exact moment the information is valid. What better way to influence a shopper’s decision making process then to provide them with all the answers at shelf? The future is coming for retail.

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