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At the 2018 Consumer Electronics show, robots, voice assistants, connected cars, and even connected cities created buzz. Augmented reality and virtual reality – not so much, with the exception of augmented reality applications in the automotive industry.

But proponents of augmented reality (AR) and virtual reality (VR) should take heart: the real action with AR and VR isn’t happening with consumer products, anyway. The compelling stories about AR and VR are happening on the enterprise side.

Throughout 2017, companies such as Audi, Ford, IKEA, Sephora, and Walmart shared examples of how they’re using AR and VR to run their businesses more effectively. For example:

• Augmented reality simplifies the purchase decision for IKEA customers: IKEA released Place, an app that makes it possible for shoppers to see how IKEA furniture might look in their living spaces.

https://youtu.be/-xxOvsyNseY

With augmented reality, users overlay simpler forms of content on to their physical spaces, usually by using their mobile phones. Niantic’s Pokémon GO and forthcoming Harry Potter games are examples. With Place, users overlay 3D models of furniture into their physical spaces to test for fit, which takes reduces the risk of buying a sofa or bookshelf before carting it home.

• Augmented reality helps Ford design cars: Ford revealed that its designers and engineers are using Microsoft HoloLens to design cars. Through an advanced form of AR known as mixed reality, Ford’s product development teams overlay holograms of design concepts on to models of vehicles in order to test and improve more complicated design features. It’s easier for design teams to envision the changes, which they view as mixed-reality overlays.

(Mixed reality entails using headsets to overlay more complex content on to a physical space. Mixed reality is like augmented reality but with more interactivity between the user and the content.)

• Virtual reality helps Walmart train employees: Walmart and STRIVR are working together to use virtual reality to train Walmart employees. With virtual reality, a user is completely immersed in another world through a combination of sight and sound. As with mixed reality, virtual reality requires the use of headsets, but the experience transports you to another environment rather than overlay content into a physical space.

Among other uses, Walmart has been using virtual reality to train employees for special situations such as the onslaught of Black Friday holiday shoppers. If you’ve ever been in a Walmart on Black Friday (as I have), you know how overwhelming the experience can be for shoppers – and the rush of shoppers can be challenging for employees, too. Virtual reality simulates the Black Friday experience on headsets so that employees on the retail floor can better prepare.

• Virtual reality improves the customer experience for Cadillac. Auto makers such as Audi and Cadillac shared how they’ve been using VR to enhance the customer experience. For example, with the Cadillac Virtual Showroom, customers can explore Cadillac models in-depth, virtually getting inside Cadillacs and exploring their features from the comfort of the consumer’s home.

• Cadillac doesn’t expect to sell a car with VR – but VR should help consumers narrow their Cadillac choices, identify options that might not have been on their radar screens, and give a dealership a better sense of their preferences in advance of an on-the-lot visit.

Augmented reality and virtual reality will continue to take hold among enterprises for a number of reasons, including:

1 Businesses Are Responding to Disruption

It’s no coincidence that AR and VR are taking hold in industries such as retail. Retailers are enduring unprecedented disruption thanks to the unstoppable force that is Amazon. To compete against Amazon, brick-and-mortar retailers need to invest in areas where Amazon does not play very well (yet), such as the in-store customer experience. AR and VR provide two ways to do so. Retailers are in the fight of their lives. The smart ones have been getting resourceful.

2 Businesses Can Scale the Advantages of AR and VR

The cost of VR equipment is an impediment to consumer adoption. Consumers wanting to experience VR themselves need to be ready to shell out $1,500-$2,000 for a higher-end headset, controller, sensors, host PC, and other equipment. People can use AR with their mobile phones – but AR creates a major battery drain.

These issues do not impede large corporations such as Walmart, which possess the budgets to make AR and VR a reality in the workplace. Large enterprises can use the advantage of scale to efficiently invest into the equipment required to train employees and improve the customer experience. So long as they can make the experiences repeatable, enterprises possess distinct advantages over consumers and small businesses.

3 Development Tools Are Enabling Enterprises

In 2017, Apple launched ARKit to help software developers design AR experiences. One of those experiences turned out to be IKEA Place. Other businesses using ARKit to build new experiences include Lowe’s, which has developed an app for users to measure physical dimensions in their homes with a virtual ruler and to envision a renovation project before they undertake it. By January 2018, close to 2,000 apps had been created with ARKit, according to Apple.

Later in 2017, Facebook-owned Oculus launched Oculus for Business, a bundled set of Oculus products designed to help businesses build virtual reality applications. Oculus for Business launch partners include Audi, which is using Oculus to help sell cars by helping customers configure their purchase before they buy it (similar to how Cadillac is using VR).

The Biggest Impediment

On the other hand, the biggest impediment to AR and VR adoption is resistance to change. The Cadillac Virtual Showroom has been met with resistance from Cadillac dealerships that perceive the showroom to be a threat to their physical inventories. Cadillac is now taking a different approach to its rollout, limiting the showroom to select dealerships, likely to demonstrate the value of the showroom to naysayers. But Cadillac is determined to move forward. As Cadillac President Johan De Nysschen told Automotive News, “We will have to continue to work away at this, because either we will be at the vanguard of it or we’ll be disrupted by it. Whether this is uncomfortable for us and our dealers is unfortunately not for us to decide. The marketplace and the competitive environment will decide this.”

What’s Next

The next step for AR and VR is to advance to the point where businesses measure their benefits across the entire company. Meanwhile, consumer adoption will remain slow with the exception of games such as Niantic’s forthcoming Magic of Harry Potter game. For the near term, significant uptake of AR and VR will occur inside the enterprise.