Virtual reality (VR) creates a whole new world, while augmented reality (AR) embellishes what’s already there. Kids’ stuff? Hardly. Between them, they’re part of a $130 billion industry with multiple business applications 

When it comes to crazes, few have had as big an impact as Pokémon Go did in the summer of 2016. The Nintendo mobile game resulted in millions of fans going out of their way in search of virtual monsters.

Children, teenagers and adults alike were enraptured, inspired by the challenge to ‘catch them all’. The global phenomenon put augmented reality (AR) technology in the spotlight like never before, capturing the imagination of both brands and marketers.

‘Pokémon Go did the technology a huge favour by bringing it to the attention of the general public, more so than any AR application before it,’ says Dan Staples, Director at digital agency FATUnicorn. ‘However, it was by no means the “debut” of AR – the technology has been around for some years in the experiential space.’

AR may not have been anything new, but it had not enjoyed the same airtime as its close cousin, virtual reality (VR). Publicity around VR headsets such as Oculus Rift and Samsung Gear has been much more widespread, not least because of the huge investment funnelled into them by the likes of Facebook.

Related: Why these four companies are getting serious about VR

The difference between VR and AR is relatively straightforward. VR involves the complete immersion of the user into an artificial, computer-generated world or recreation of real life, usually via a full-face headset.

AR, meanwhile, layers computer-generated enhancements on top of existing reality, giving users additional information or visuals. This is usually accessed through smartphones or less-intrusive headsets, like the ill-fated Google Glass.

Both technologies are expected to flourish over the next few years. Digi-Capital’s 2017 Augmented/Virtual Reality report estimates that the AR industry will be worth some $120 billion by 2020, placing VR at $30 billion. The ease with which AR can be applied, compared with the intrusive nature of VR, gives it a considerable edge.

The marketing market

While the natural home for AR and VR is gaming, more practical uses are being added to their repertoires all the time. The most obvious one for AR is its use as a marketing tool, enhancing consumers’ existing interactions with brands.

‘We partnered with DreamWorks Animation to bring to life characters from the film Trolls in Tesco stores across the UK,’ says Caspar Thykier, Chief Executive and co-founder of AR company Zappar.

‘Armed with their smartphones, users were able to embark on a hunt to find Trolls characters and unlock AR experiences, such as styling themselves with the trolls’ signature colourful hair using Zappar’s “face-finder” technology.’ It’s not just a boon for marketers, though. Some see AR taking off in industrial usage and skilled trades. ‘Providing wearable AR solutions in fields such as construction – directly to engineers or on-site staff – will reduce human error, safeguard on-the-ground workers and accelerate the learning curve for training employees while reducing costs and timelines,’ says Greg Taylor, General Manager at digital agency Tigerspike. The uses for VR are not entirely dissimilar to those of AR. Retailers such as Ikea have seen the potential for VR to enhance the customer experience. ‘Ikea has created a VR kitchen app that allows shoppers to enter a life-sized kitchen where they can compare and contrast different cabinets, surfaces and fittings,’ explains Johnny Hon, Executive Chairman of Gate Ventures. ‘VR gives retailers the opportunity to create an immersive shopping experience that extends beyond the physical and digital brand experience.’

VR differs from AR through its ability to put someone into situations they aren’t actually in. This has applications for education, where increasing numbers of online or virtual courses don’t require students to step foot into the classroom.

‘MBA programmes are all about connectivity,’ says David Lefevre, Director of the educational technology unit at Imperial College Business School. ‘Students, faculty and other participants need to feel part of a strong community.

‘We have begun to experiment with VR to enhance students’ sense of being connected to the school. For example, if we have a live event then our plan is to place a VR camera in the best seat in the hall, thus allowing our geographically dispersed students to experience the event more fully through the use of VR headsets.’

Fantasy world

While many industry experts are excited about the potential of these technologies, some are aware of the potential pitfalls.

Particularly in the case of VR – its success in creating realistic alternative worlds could be its biggest threat. ‘The risk, as with any new technology, and especially with tech like VR and AR that can be so powerful, is in overuse,’ says Henry Stuart, Chief Executive of VR firm Visualise.

‘For VR, people could easily want to escape the real world into this fantasy world. Meanwhile, AR causes concerns around people’s already diminishing focus and concentration.’

As with many products, it will be down to the industry to communicate the dangers to consumers and offer best practice for use.

Read Next: How virtual reality could save the high street

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