Are You Ready for the Next Digital Revolution?
Virtual Reality. Augmented Reality. Computer Vision.
Virtual Reality (VR), Augmented Reality (AR), and Computer Vision: these are big, digital concepts, but what does ‘being digital’ really mean? The truth be known, digital technology means different things to different people. There is good reason for that: we are in the midst of an ongoing, dynamic, digital evolution.
The term ‘digital technology’ was established in the late nineteenth century, when semiconductors were first used for electronic devices that enable digital communications (Joseph Chiu, 2016). The term evolved to incorporate internet technology, which provides online access to a variety of information. The next digital development was mobile access through operating systems from the likes of Google and Apple. Today, digital technology includes the Internet of Things (IoT), the end-result of embedding machines and equipment with tiny sensors to link virtual devices and facilitate easily-shared, information online (CIO Whitepapers Review, 2018).
The next digital evolution is virtual reality, soon to be transformed into augmented reality, and ultimately becoming computer vision. As a result, depending on your industry or area of expertise, one person’s view of digital could be entirely different from another’s, and both would be right.
This background is helpful when we think about the digital technology of today. If you know someone who plays Minecraft, then you already know that VR has arrived. And if you really think about it, you’ll realize that VR is in industries beyond gaming – entertainment, healthcare, and education, to name a few. VR nicely complements AR, which is currently being used for applications such as military training and agricultural farming (Dell Technologies, 2017). These might seem like applications that won’t have a direct impact on us for a while, but VR and AR are creeping into our lives from every angle, and providers of this technology will need to be ready for this revolution, which will be the status quo in 5-10 years.
What are VR and AR (Augment, 2015)? They are alternative audio-visual worlds created through headsets. What is the difference between the two? Virtual Reality is completely immersive and replaces the real world, which means the user sees a made-up world, generated by realistic, 3D video-type images -- the person has no visual access to his or her surrounding physical location. Augmented Reality is a combination of the real world and a virtual world, enhancing the actual, physical world with 3D digital images (Technology Trends, 2018). Both technologies move beyond the limitation of two-dimensional (2D) screens, making the entire space around users interactive. For those overachievers, when you combine AR with AI (Artificial Intelligence), the result is Computer Vision – the ability to enhance AR with another layer of digital information, which ensures that the user not only sees visual augmentations but also receives additional information to further explain what he or she is seeing.
Virtual Reality: User immersed in Virtual Reality setting.
Augmented Reality: Using AR glasses to work on a virtual 3D building.
This might sound like science fiction, but it really isn’t. Think about this: A few years ago, we never would have dreamed that 3D printing would be so prevalent– yet 3D printers are surprisingly common today, producing camera lenses, medical models, and many other types of devices (Voo, 2018). It might seem like this happened overnight, but the concept of 3D printing started in the 1980s, went commercial in the 1990s, and became mainstream in the past decade (Goldberg, 2018). The top players, like HP (Kay, 2018), have been in mass production from 2015 (HP ATKearny, 2017), which means that they were planning to launch their 3D printers well before that. So, if you plan to be a ‘player’ and your future includes digital technology, now is a good time to start planning your strategies.
The reality is that every few years a technology comes along that changes the way we interact with the world. Some changes are subtle or foundational, such as the impact of the Apple ‘app economy’ on how companies digitally connect with their customers. Other changes are more fantastical or instrumental, like eCommerce on the web and the internet. The adoption rate of these new technologies might be difficult to predict, but the impact on our lifestyles ends up being significant. What might be science-fiction in 1990, could be a reality in 2022 (Driverless-Future, 2017): Total Recall’s driver-less cars, seem much more realistic today than they did back then (wordbit, 2015)!
The Early Adopters
We are currently on the cusp of the technological shift brought on by VR and AR, which will cause sweeping changes to how companies connect to customers. In addition to already having a strong presence in interactive video-gaming, VR and AR will eventually become mainstream for many other consumer products. The future of VR and AR is likely to be different from what we see today, and with the introduction of AI, the next-stage Computer Vision becomes a reality. The potential of these technologies promises to be exciting and disruptive.
Lambert Rugani, Managing Director of ZRG Technology Officer Practice, shares, ‘We’ve done extensive research with our clients and they tell us that VR, AR, and Computer Vision are already active in many sectors. For example, Shanghai is currently using these technologies to provide social scores on its residents.’ The city of Shanghai derives social scores by using Computer Vision to interpret facial expression and behavior from data feeds provided through closed-circuit, television cameras. As residents are regularly monitored in the public domain, their scores get updated and are used as reference points when applying for jobs or involved in incidents. From a security point of view, this type of monitoring has its advantages, which is why Shanghai is not alone in using this type of technology. However, the purpose of Computer Vision should always be thought through: You can imagine how Shanghai’s use of social scoring is constantly debated.
Facial Mapping
In addition to using Computer Vision for job applications or law enforcement, it can be used in many other areas. For example, a ZRG client explains how US companies are providing VR-enabled solutions to help European universities train their medical practitioners in emerging markets. Some of the doctors that use this facility are from Afghanistan and, after their last regime change, they have limited medical resources. They need to learn how to function in a bootstrapped environment.
With the VR training center, these surgeons can ‘stop and go back’ in the middle of a virtual surgery – something you can’t do in real life. Imagine if you could use computer vision technologies to understand what we see - in the future, surgeons may be able to detect abnormalities with smart glasses and computer vision just as traffic controllers would be able to detect possible traffic jams before they occur.
From a consumer perspective, VR and AR will help shoppers interactively browse and buy in virtual stores from the comfort of their homes. Fred Lamster, Consumer & Retail Managing Director at ZRG, says that customers will soon be able to walk through a store department in detail, from the comfort of their own sofa. That significantly changes the ‘cool’ factor and is a key way to raise the stakes within our space. Plus, virtual shopping also means shopping with friends – buyers will be able to ‘bring their friends along’ with the integration of social media technologies. Of course, our environmentally-friendly clients also remind us that this will have a dramatic effect on our carbon footprint, reducing time on the road and lowering emissions from cars and planes.
According to Terry Petzold, Technology Managing Director at ZRG, ‘research shows that in the next few years, the VR and AR markets are supposed to grow from $27B in 2018 to $209B in 2022. 51% of that growth is in the retail and consumer space, and these numbers are for the US only (Statista, 2019).’ Between the timeline, the global demands, and the non-mentioned sectors, suppliers and corporate users of this technology would be wise to invest in preparations for this large, untapped market potential.
Improving Experiences, Efficiencies, and Services
A lot of today’s digital technology experiences started with enhancing commerce through an experience. ‘The retail space is a great example of this because it has always held the experience of the customer in high regard,’ says Fred Lamster. Most retailers agree that the ‘right’ customer experience can be a key differentiator in building brands. And whether it is enhancing POP (Point Of Purchase) displays, kiosks, or eCommerce, the advancement of technology has been at the center of this change. How do we make it easier, faster, smarter, or more convenient for a customer to select and buy a product? With VR, a customer can walk into a virtual store any time and interact with products in almost the same way as being in-store, providing an alternative experience to a physical store or an online presence. With AR, customers are not limited by physical space. While being in-store, their virtual space shares the rich, product content that is usually available only online. Additionally, users can immediately access ‘help’ through the Computer Vision navigation, directing them to specific products or to real-life people who can provide support. And, much like online shopping experiences today, an AI aspect provides the additional value of recommending complementary products to your purchases. ‘These technologies provide similar intelligence to a good salesperson, and there is the bonus of using digital space to offset the physical spaces that might not be the productive selling spaces they once were,’ says Fred Lamster.
‘In addition to improving the customer experience, digital technology also increases market efficiencies and business specialization,’ says Rahul Kapur, Managing Director for Financial Services at ZRG. One example is in manufacturing. Some of ZRG’s clients have become more productive by creating completely separate workflows for standard and customized processes. For the high-volume, standardized streams, production errors have been mitigated with the integration of digital and manual processes and the implementation of virtual workers. This allows these companies to redeploy their existing personnel to support higher-value products that require more attention and come with white-glove service.
In the banking sector, customers use their smartphones for deposits, and they go to ATMs for cash withdrawals. The ATMs, as you know, are not always located at a bank – leaving the roles of the physical bank and banking relationships less clear. That’s why banks are increasingly repurposing physical branches as places to build links with clients rather than transaction hubs (Bhattacharyya, 2018). It’s an opportunity for these financial institutions to differentiate themselves, but they need to still figure out the right formula to meet their clients’ unexpressed, face-to-face needs.
The real estate market is also seeing digital changes, with a big push for virtual property video and inspections. Brokers are providing dynamic, updated property images – from Google Maps, and it is often difficult to tell the difference between animations and virtual reality. The result is a huge benefit for buyers because they can ‘see’ a larger range of virtual properties and then spend more onsite time at their best-suited options. The brokers and agents also reap the rewards, because these virtual viewings can be meta-tagged with keywords, helping them to hone in on the ‘right’ property matches between buyers and sellers, enabling better emotional management to keep everyone happy.
ZRG’s market research confirms that, although there are several unknowns, AR, VR, and Computer Vision are the platforms of the future, because they can transport you into a truly immersive experience and place a digital layer of information onto your reality. Although these technologies are already available, it’s going to be a few years before a person on the street regularly experiences them in their daily lives. At that point, these enhancements will offer customer experiences and service levels at a much higher quality and, in doing so, create a very interesting shift to a landscape that is just now starting to stabilize
The Challenges
With the increasing demand for digital technology, the actual growth of VR and AR depends on their readiness for commercialization. Improvements need to be made to the headsets, and there needs to be more three-dimensional (3D) data. The products also need to be standardized across all industries, and the pool of trained developers needs to expand into a wider range of consumer segments. As these production barriers are removed, the use of VR and AR will drastically increase.
The headsets, also known as smartglasses, are the key to VR and AR. From a customer experience, clients say that there is a general industry preference for AR smartglasses because the long-term wear of VR glasses can result in headaches, vertigo, and cognitive dissonance. In fact, Google Glasses were launched a few years ago to address this exact need. However, production costs were too prohibitive for the consumer market, as the headset features that are important to everyone-- weight, durability, portability, latency, are currently very expensive to combine. So, in the short-term, Google is repurposing its glasses for the bigger budgets of large enterprises, and the emergence of cost-effective glasses for consumers is now expected after 2021 (Merel, 2017). Of course, while there is this ongoing development, consumer demand continues to grow and users become increasingly impatient: gamers need headset stability, medical students need video precision, movie-producers need realistic visuals, and so on. However, as the industry becomes more established, specifications will become more consistent, manufacturing costs will decrease, and headset pricing will become less prohibitive.
Another challenge is the need for 3D content to drive the multi-dimensional experience of VR and AR. ‘Digital Asset’ Management exists, but it is focused primarily on 2D images and video content – not 3D models of products, store environments, and checkout experiences. In an AR scenario, the store and product content would need to be mapped to the 3D real world, so when users walk up to a display with an AR device, they can see that 3D content in their headset. Tracking a person’s location in-store or interaction with displays or products is also a significant challenge, requiring a range of different technologies including beacons, Wi-Fi, and cameras, to bridge the physical and digital worlds. Even the CAD/CAM (Computer-Aided Design/ Manufacturing) software used to design these products is limited to 2D. Therefore the creation of 3D content and its applications will require an evolution of the entire VR and AR supply chain.
Beyond the need for hardware and software development, with the industry being somewhat new, many VR and AR suppliers are building systems that are independent of each other. From a user perspective, this becomes very hard to navigate, because system components are not interchangeable or integratable. In response, organizations such as VESA (VESA, 2017) are creating Special Interest Groups to address the needs for standardization of everything from hardware to operating systems. These industry-wide protocols need to be established for basic production so that retailers can differentiate themselves beyond the basics with functionality that is important to their buyers – items that are specialized, unique, and intuitive. Yes, these users want experiences that are even better than real-life!
Naturally, the onus is on the retailers to meet the long-term demands of their consumers. However, for full-scale commercialization, they will have to work together as an industry to properly address the need for standardization – from hardware to software to systems. As retailers become more committed to VR and AR, they will expect their suppliers to provide the necessary supporting hardware and software, but right now the 3D industry is too young for that. Instead, some retailers might want to do the work in-house, but that means their IT teams must have (or hire) those skill-sets. Regardless of who builds the talent, the industry is new and growing, and there is a lot of opportunities, especially for those who start the planning and investments now.
Where Do We Go From Here?
As consumers begin to embrace VR and AR, companies will begin to grasp the benefits of these technologies and become more accepting of the challenges they might need to overcome. To get consumers excited about the future and to stay ahead of the increasing demand, providers will need to:
- Create content for virtual products, stores, location tracking, and eCommerce.
- Enhance digital, content management systems to collect, create, and store 3D content.
- Develop applications to create the 3D experience.
These are competencies that most IT shops currently lack. To develop them, these organizations must identify use cases for prototyping and demonstrating VR and AR capabilities to their customers.
‘The early adopters have already commercialized their prototypes,’ says Terry Petzold. ‘For example, Sephora offers several options to personalize in-store shopping experiences by trying on makeup virtually using AR (Rayome, 2018). Also, kids are already customizing their own sneakers, but imagine when they see a 3D image of shoes, they are designing for themselves. They will have transcended the need to buy in-store. Instead, they will select, design, and buy their shoes at home, where they can almost feel and touch them.’ These are just a few examples of how VR and AR will be integrated into consumer-focused industries, such as fashion, clothing, camping equipment, and food.
By re-thinking how to display content in physical stores, how to create virtual store experiences, and how to make shopping more fun with digital enhancements, retailers will be better prepared for the growing application needs in this space. The commercialization experts remind us that the key to adoption will be based on volume: The excitement for VR and AR needs to be so great, that the consumer can’t see a future without it and the investment by the retailer will be worth it.
The Impact of VR and AR on your Organization
How do companies position themselves for a future that they cannot even envision? It starts with a mindset. ‘Technology and innovation officers need to be tied to the marketing officer and future-state customer experience, and they collectively should have a vision of the company in ten years from now’, says Terry Petzold. If digital technology is in a dynamic state between the real world, online interactions, and virtual experiences, then these leaders need to introduce those capabilities into their organizations by building teams with a range of skills to provide development agility. Executives can use business models that already exist – maybe the product development team starts taking on the culture of those in the gaming industry, since that sector seems to be leading the adoption of VR, AR, and ultimately AI. That is one way to help consumer-driven companies develop the right energy, momentum, and mindset for the future.
Next comes the need for productivity and deliverables, and the product teams can start by building out their VR and AR use cases. If that is too much of a ‘stretch’ goal, build your technology team by having them produce interim solutions. Companies are innovating with all sorts of creative offerings:
- Use QR (Quick Response) or bar codes and, when users point something at it, the code is hyperlinked to a 3D image.
- Register a marketing brochure and, when a device with AR access points at it, the content will fly into a YouTube video.
- Launch a camera app on your phone and, when it detects the real-life surfaces of your store, additional digital imagery shows up in your camera view to make the store 3D.
- Create an AR/digital overlay so, when a watch is used, it is supported with an online world that is rich with information about the product, specs, reviews, and lifestyle videos.
Lastly, you need the right talent. ‘Business technologists believe there are probably only 5000 people with a virtual reality role in the world right now’ according to Terry Petzold. Most of those people are working in university research, the defense industry, software, gaming, or movie production. Just over the past two years, there has been a definite increase in demand for employees with these capabilities – 77% of that demand comes from the gaming and movie industries (Perkins Coie, 2018). If you can recruit existing gaming developers, then you should, because their experiences in immersive environments will definitely be a customer experience game-changer.
On the other hand, it is more likely that you will need to hire and develop your own talent because the demand is far surpassing the supply. CompTIA (Fitzgerald, 2018) confirms that job postings for developers are at a 32% Year Over Year increase from 2Q 2017 to 2Q 2018, and that represents only a fraction of the growth that is forecasted over the next few years (Statista, 2019). With the large gap between supply and demand for programmers specializing in VR and AR, you should quickly decide how you will acquire this talent – training, recruiting or outsourcing, and you should get started. All options are viable, especially when you are committed to enhancing the customer experience.
Staying Viable and Competitive
Well-run organizations are led by executives who prioritize strategic investments, and it should be a rare exception when the digital experience is not one of those top company priorities. VR, AR, and Computer Vision are part of this imminent digital revolution and, because these are newer technologies, businesses will need to make investments in their resources now, to ensure their growth in the future. The more aggressive the investment today, the more likely your company will develop its depth of expertise and be able to adjust to these unknown, future demands. Take the time now to start thinking about what your company’s digital future will look like, and what you will need to thrive in that environment. Use those insights to build your technical competencies and your teams. This will provide the advantage you need for the future – along with all the revenue that this vision will drive. You don’t want to be like Compaq (remember them)? They were a computer company founded in 1982. In the 1990s, they did not give themselves enough options for the future and ended up going out of business (StashLearn, 2017). Stay away from that path. You want to be the hip and trendy company that is agile enough to lead the industry into a promising and exciting digital era.
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