The COVID-19 pandemic affected different industries in different ways. At the same time, businesses were also forced to transform themselves digitally, albeit at various paces. Organizations adopted technologies ranging from artificial intelligence (AI) and machine learning (ML), and cloud computing to IoT and immersive technology to keep up with the changing business dynamics. Extended reality (XR), which includes augmented reality (AR), virtual reality (VR) and mixed reality (MR) is having its moment now. According to MarketsandMarketsOpens a new window , the XR market is expected to grow from $33 billion in 2021 to $125.2 billion by 2026.
Perkins Coie and the XR Association recently released the XR Industry Insider: 2021 XR Survey reportOpens a new window , which shows what industry leaders believe about this technology’s growth. A major insight from the report was that 83% of industry leaders believe that the pace of investment in immersive technology will grow this year.
The following are a few more key insights from the study.
Also read: Immersive Customer-Employee Experiences Will Set Brands Apart in 2021
1. Industry Leaders Are Highly Optimistic About the Technology’s Future
The study found that like last year, industry leaders are optimistic about immersive technology’s prospects. In fact, it could be said that they are more bullish this year than in 2020. About 83% of respondents said that the pace of investment in these technologies would either slightly or significantly increase this year compared to 68% last year.
Pace of investment in immersive tech in 2021 compared to 2020
Source: XR Industry Insider: 2021 XR Survey reportOpens a new window
It may be noted that the pandemic was a key driver of digital transformation, and XR is a critical component of it. The optimism of this technology’s growth varies by industry and is related to the shift in consumer habits developed during the pandemic or the behavior expected once they are free to move around again. The remote work culture is also having an effect. About 95% said their organization intends to increase spending on immersive technologies for better remote collaboration and training.
Further, about 77% said that automotive and retail/ecommerce would fare much in terms of technology usage post pandemic. Similarly, healthcare and workforce development will fare much according to 76%, and commercial real estate will fare much according to 74%.
How different sectors will fare in terms of immersive tech usage post pandemic?
Source: XR Industry Insider: 2021 XR Survey reportOpens a new window
2. Adoption Depends on Access to Software
Industry leaders believe that the adoption of these technologies by consumers and enterprises depends on access to software. About 50% said that developing more accessible software that meets their needs would be the biggest driver of industry adoption. At the same time, respondents also believe infrastructure (44%) and government funding for research and development (40%) are important. When it comes to consumer adoption, 61% believe that access to open-source software and communities, 48% believe awareness of platforms and content, and 46% believe infrastructure are the biggest drivers of immersive technologies.
This shows that there are also certain barriers to adoption. About 65% say that user experience is the biggest barrier to adoption. About 53% believe content offerings and 27% believe the cost to consumers are other hurdles.
3. There Are Different Ways To Improve Immersive Content
The study showed that 61% believe existing immersive technology content can be improved if developers focus on making it more interactive/immersive. About 53% also wanted content compatible across different platforms and with more seamless interactions with other users (44%). One respondent said that industries would need new, easy-to-access and build content.
Part of the problem is that there isn’t enough clarity about what is considered compelling for users. About 64% said consumers are not aware or do not understand where or how to find compelling content. At the same time, 54% said developers do not understand what makes content compelling for consumers. To reduce this gap, developers will have to listen and educate consumers.
To what extent do respondents agree with the statements?
Source: XR Industry Insider: 2021 XR Survey reportOpens a new window
Also read: Will This Be the Year Event Marketers Step up With Truly Immersive Experiences?
4. Many Minority-Owned Businesses Believe Content Is Not Immersive Enough
Respondents working for minority-owned or women-owned businesses are more convinced that developers do not understand what content is compelling for consumers. Respondents from minority-owned businesses strongly agree with this statement, while those from women-owned businesses either agree or strongly agree with the statement.
To what extent do respondents agree with the statement, “developers don’t know what compelling content is for consumersâ€?
Source: XR Industry Insider: 2021 XR Survey reportOpens a new window
About 70% of respondents from minority-owned businesses believe that existing content is lacking from being interactive/immersive. About 21% of respondents from women-owned companies believe that educational content is lacking even though they feel the pandemic affected the use of these technologies in the education sector more than in other sectors except marketing and advertising.
5. Healthcare and Marketing Most Primed for Disruption by Immersive Technology
The same survey conducted in January last year (pre-pandemic) found that most respondents believed that healthcare was the sector most primed for disruption by immersive technologies. The pandemic did prime this sector for massive disruption. According to a few respondents, immersive technology may become much more common in this sector. At the same time, while healthcare did top the list of industries, marketing and advertising followed closely. This year, 34% said the use has most changed in healthcare since the pandemic, while 31% cited the use has changed much in marketing and advertising.
In which sectors has the use of immersive tech most changed since the pandemic?
Source: XR Industry Insider: 2021 XR Survey reportOpens a new window
6. Immersive Technology’s Use in Education and Fashion Is Changing as Well
About 97% of respondents believe that immersive tech will contribute to significant advancements in the education sector through 2026. However, respondents also believe that education is the sector that is most challenged by the lack of immersive content. About 59% said investment in further research is needed to efficiently integrate AR/VR in this sector.
Similarly, 89% believe that retail, especially, fashion presents excellent opportunities for using immersive technologies. About 73% said virtual merchandise try-ons, and 63% said virtual on-demand customization options are the solutions that could have the most significant impact. Retailers like Home Depot and IKEA and high-end fashion designers like Balenciaga are already using these technologies to create immersive experiences.
Also read: 5 Ways Immersive Technologies Are Remodeling Retail’s Future
Our Take
Marketing and advertising are a function that has witnessed significant adoption of immersive tech during and post pandemic. This was primarily driven by the lack of physical experiences consumers had during mandatory lockdowns and safety guidelines. The pandemic forced most consumer-facing businesses to move online. As such, brands had to resort to technologies that can simulate real-world experiences. Retail brands, in specific, are using immersive technologies in different ways to connect with consumers and attract them.
According to Accenture’s “Try it. Trust it. Buy it.Opens a new window †report, 61% of consumers said they would more likely buy from a brand that uses immersive technology, such as AR and VR. Moreover, 47% said these technologies make them feel more connected to the products and brands. Furthermore, 64% of leading consumer brands have started investing in creating immersive experiences.
Having said that, a significant number of immersive experiences are still one-off experiments, and these technologies are yet to see wider adoption. Nonetheless, consumers are looking for more immersive experiences.
Consumer expectations and behaviors have changed during the pandemic and continue to change. As such, brands are forced to use technological advancements to have a competitive edge. Fortunately, increasing accessibility and quality of immersive tech are helping brands to keep up with the continually shifting business environment. Adoption of immersive tech by brands may only be expected to continue.
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