Among several areas where AR will apply, one of the most exciting and potentially lucrative is local commerce. This includes consumer spending that’s consummated offline, and usually in proximity to one’s home. AR will join the tools that help us discover products and qualify buying decisions.
As background, it’s often overlooked that most consumer spending happens offline in the physical world. Despite the attention to e-commerce over the past decade, it only accounts for eight percent of consumer spending. The remainder – about $3.7 trillion in U.S. spending – is brick & mortar.
But that’s not to downplay digital technologies. Online media – including desktop and mobile – have a big influence on that offline spending, to the tune of about $1.7 trillion in U.S. consumer spending. This is known in the search and advertising worlds as “online-to-offline (O2O) commerce.”
This is where AR could have an impact. Just think: is there any better technology to accelerate O2O commerce than one that literally melds physical and digital worlds? Indeed, AR can shorten gaps in time and space that currently separate digital interactions (e.g. search) from physical-world outcomes.
This will play out in several ways, including informational overlays that add context and commerce to items you point your phone at. It’s everything from restaurants, to shoes you see worn on the street. Not only does it offer consumer utility but it taps into high buying intent, which leads to monetization.
But before we get too utopian and carried away in blue-sky visions – as is often done in XR industry rhetoric, trade shows and YouTube clips – it’s important to acknowledge realistic challenges. There are several interlocking pieces required, including hardware, software and the AR Cloud.
Coined by Super Ventures’ Ori Inbar, the AR cloud underpins the AR future many of us discuss. In short, it’s a cloud repository of geo-relevant data and object blueprints that will empower far-flung AR devices with contextual and situational awareness. It’s the active ingredient in an “internet of places.”
But how will the AR cloud be built? Who will own it? How will information be indexed and accessed? And how will AR devices translate that data into AR magic on the front end? These are key questions that will define the next era of mobile AR. And they’re the questions we begin to tackle in this report.