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The future of customer experience: how VR, AR and 5G are changing customer service

AR and VR have significantly contributed to making virtual worlds more tangible and approachable. Both technologies offer new options for brands to showcase their products, capture desires, dreams and habits, and create a powerful customer experience.

By Michael Schweidler, EMEA Marketing Manager

Last updated November 30, 2021

Over the past 15 years, new technologies have entered the market at an increasingly rapid pace — from smoother production, artificial intelligence, quantum computing through to Software 2.0. More recently, there have been two technological developments that together will impact the future of customer experience: Virtual Reality (VR) and Augmented Reality (AR).

VR refers to the creation of a computer-generated virtual world, as used in gaming, for example. AR, on the other hand, augments reality with computer-generated objects, a kind of ‘enhanced’ version of the physical world that is technologically enriched by the use of digital visual elements or sound. Together, the two technologies are considered mixed reality, a merging of real and virtual worlds to produce new environments and visualisations, where physical and digital objects co-exist and interact in real time.

AR and VR have significantly contributed to making virtual worlds more tangible and approachable. The gaming world as well as retail, manufacturing and other industries are increasingly using this technology to give users, customers and employees the impression of touching, navigating and exploring the digital world.

Additionally, the latest mobile communications standard 5G has been gaining ground since 2019. It is considered the successor to the LTE network and is up to 100 times faster and will be able to provide much greater capacities. It is primarily used for three different application scenarios: first, for more (mobile) bandwidth; second, to enable remarkably low data rates and low energy consumption for the Internet of Things (IoT); and third, 5G is intended to enable reliable connections with low latency. This is important for autonomous driving or industrial automation, for example.

In fact, the two technologies work hand in hand: 5G enables new speed for data exchange, which in turn increases the usability and possible applications of virtual and augmented reality, or makes them possible in the first place. Both technologies offer new options for brands to showcase their products, capture desires, dreams and habits, and create a powerful customer experience. But not only is the technological development accelerating, companies — spurred in part by the COVID-19 pandemic — have now recognised the benefits of these new technologies. For example, 46% of companies in Europe and Great Britain are saying digital adoption has accelerated by 1-3 years, 21% it has has accelerated by 4-7 years According to the Zendesk CX Trends Report 2021 . ICurrent surveys highlight the importance of a good customer experience as part of technological change: according to the Zendesk report, for 53% of companies in Europe and Great Britain, CX is more important than it was in 2019 and the main objective of their digital business transformation.

However, according to a survey by management consultancy Roland Berger, only around one-third of German companies currently rate their own digital readiness as high or very high. This is all the more alarming as it is assumed that most companies will hardly compete with each other on the basis of price in the near future, but that the customer experience will be the decisive factor.

Mobile real-time shopping

But what are the impacts of VR, AR and 5G on the two disciplines that are closest to the customer, namely marketing and customer service?

When dealing with customers, augmented reality can for instance be used for product demonstrations or to provide the customer with support directly on the live object via smart glasses in order to solve the problem at hand. For example, if a customer has start-up difficulties with the recently purchased robot vacuum cleaner, a support agent can use the glasses to analyse the problem and solve it together with the customer. This is much more efficient and satisfying for customers, as they are virtually taken by the hand and do not have to search for the solution on their own. This takes the customer experience to a whole new level.

Augmented reality can also play an important role when it comes to decision-making or optimising customer experience in the future, for example in the beauty sector or in retail — both online and offline. For example, customers can already try out different make-up colours without actually applying them or see what clothing looks like on themselves. This can save them going to the changing room or indeed all the way to the local store. And buying furniture can also become really convenient and simple: sofas, beds and tables can be virtually projected into the home, where they can be moved, rotated, turned and, if necessary, customised as desired. AR technology makes shopping easier, more convenient, more attractive and more personal.

Since many consumers already use their mobile devices for shopping today, this trend will be further accelerated as the 5G standard becomes more prevalent. Mobile commerce will therefore gain in importance (even more). As a result, the winners will be those retailers who are able to offer a seamless customer experience and a positive shopping experience in m-commerce.

CX trends: enhancement, emotions and radical personalisation

Companies should, however, implement 5G as well as VR and AR where it provides added value for their customers. If they do, augmented reality will give brands the opportunity to have a lasting impact on the customer experience and to inspire new needs in their customers. In turn virtual reality that users will want to have similar experiences in the real world. A 2016 neuroscience study by YuMe and Nielsen already showed that VR can increase emotional engagement by 27% compared to a 2D experience.

VR and AR make it possible to take consumers into a new virtual brand world that can be customised for each user and further enhance their sensory perception. Used in the right way, 5G, AR and VR offer emotional customer experiences on a whole new level.

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