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IKEA: A Case Study on the impact of AR and VR on Marketing

September 1, 2022
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AR and VR are two rapidly-growing technologies that are currently having a significant impact on a number of industries. In recent years, the growth rate of both AR and VR has been exponential, with AR and VR market sizes expected to increase by USD 162.71 billion from 2020 to 2025.

This growth is being driven by a number of factors, including:

  • The increasing affordability of AR and VR devices
  • The expanding range of application for these technologies
  • Increasing investment from both the public and private sectors.

IKEA has been at the forefront of exploring the potential of these technologies, and this case study will explore the impact that AR and VR have had on the furniture giant’s marketing strategy.

What are Definitive Digital Marketing Realities today?

There’s no doubt that digital marketing is constantly evolving. With new technologies and platforms emerging all the time, it can be hard to keep up with the latest trends and know what really works. In this section, we’ll take a look at two technologies that are tipped to play a big role in digital marketing in the near future: Augmented reality (AR) and Virtual reality (VR).

Virtual Reality

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VR is a digital reality that has been created through the use of computer technology. It is a three-dimensional, interactive environment where users can experience and explore virtual worlds. VR has been used for a variety of purposes, including education, training, and entertainment. In recent years, it has emerged as a powerful tool for marketing and advertising.

With VR, businesses can transport their customers to imaginary worlds where they can interact with products and services in a completely immersive way. This provides a unique and unforgettable experience that can help businesses to stand out from the competition. This technology is still in its infancy, but is already proving to be a powerful force in the world of marketing and advertising.

Augmented Reality

Augmented reality (AR) is a technology that superimposes computer-generated images on a user’s view of the real world, thus providing a composite view. A well-known implementation of AR is in social media image filters, popularized by platforms like Snapchat and Instagram. Currently, the most common use of AR is in video games, where it enhances the player’s experience by providing greater immersion.

However, AR has a wide range of other potential applications. For example, it could be used to provide information about products in a store or to give directions to drivers. It could also be used in education, for example, to provide interactive 3D diagrams of scientific concepts.

AR has been at the forefront of digital marketing since its inception. However, it was only recently that the technology gained mainstream adoption. Thanks to mobile devices and apps like Snapchat and Instagram, AR is now more accessible than ever before – and businesses are beginning to take notice. From interactive experiences to enhanced product visuals, AR offers a wide range of benefits for marketers. Perhaps most importantly, it allows brands to create truly unique and memorable experiences for their customers.

Impact of AR and VR on marketing

Extending the customer experience

Marketers now have the opportunity to provide deeper context for their customer experiences through virtual engagements. VR allows marketers to create virtual environments and experiences for their brand that enhance the customer experience. These experiences are accessible via web or app, allowing customers to interact without the need for VR headsets.

The use of AR (versus a website) for creative purchase decisions sequentially increases customer engagement, customer creativity, and anticipated satisfaction.

AR is the most widely used immersive technology, allowing more flexibility in improving customer experience. Imagine being able to try on different clothes or cosmetics virtually before you buy them. Virtual try-ons and product visualizations are all about the customer, giving them the chance to create their brand story.

Shopping Experiences that are entirely different

71% of shoppers prefer to go to stores with a “try-it-before-you-buy” AR experience. Retailers should be committed to making shopping more enjoyable before customers ever step foot in a store.

Retailers can offer interactive experiences for customers who manage to make it into the store to increase brand awareness and product engagement. For example, a virtual fitting room will enable customers to visualize themselves in various apparel options. This helps them narrow down their choices before they actually try them on. This can result in a significant increase in sales conversions and drastically decreased returns.

AR shopping experiences are rare. They can be used in-store and at home, allowing customers to understand a brand or product better. Marketers need to reconsider shopping online using Augmented Product Visualization. Intelligent closets, software-predicted product details, and systems that automatically detect colours, and materials, are all part and parcel of the future of online shopping.

Social Media Acceptance

It should come as no surprise that immersive experiences have become deeply linked to almost every social media platform, thanks to the investment of Facebook in AR filters and lenses. Although AR is not a term everyone has heard of, most people have used it. Using codeless AR, open-source AR toolkits (SDK), and WebAR makes it easier to create and use virtual interactions on social media.

70%-75% of those aged 16-44 are informed about AR. This is your target audience. AR brand promotion can be used effectively on social media to influence trends, increase impulse purchases, and boost brand engagement.

Employee Engagement and Training

Some companies are using AR and VR to train and recruit their employees.These technologies can be used in the same manner by marketing teams. The virtual environment can be used to connect people with immersive experiences that include visualization, gamification, and other techniques. Marketing teams can create interactive, highly customizable content for their team members to help them improve their knowledge and implement immersive interactions for clients.

In manufacturing, VR can be used to evaluate potential employees in different areas of a virtual line. This allows them to see how they react to the environment.

IKEA Case Study

The services offered by furniture retailing giant, IKEA, are one example of how companies could benefit from such technological innovation.

IKEA, the largest furniture retailer in the world since 2008, is one of the major players in the RTA (Ready to Assemble) furniture market. IKEA is a multinational European company that designs and sells RTA furniture, kitchen appliances, and accessories.

IKEA has always been at the forefront of innovating to meet the needs of its customers. In recent years, this has included developing new technologies to make shopping more convenient and engaging.

One example is the Ikea Immerse VR app, which allows users to virtually tour an Ikea store and see how furniture would look in their homes. The app also includes product information and pricing, allowing users to make their decision without having to wander through the entire IKEA store.

Another example is the VR store tours that Ikea offers in various locations around Australia. These tours give shoppers an immersive experience of what it would be like to shop at an Ikea store, without having to leave their homes.

Recently, Ikea has taken things one step further with the launch of its VR Kitchen Visualizer. This new tool allows customers to design their dream kitchen in VR, using a variety of different Ikea products. The Ikea VR Kitchen Visualizer is currently available in select stores in Australia and will be rolled out to more countries in the near future.

With the VR Kitchen Visualizer, customers can choose from a variety of different kitchen layouts, colours, and styles. They can also add or remove appliances and cabinets, and see how each change affects the overall look of the room. Once they’re happy with their design, they can save it and share it with friends and family.

The IKEA Place App

IKEA Place launched its AR app in September 2017. It aimed to address practical issues surrounding furniture shopping. With this app, customers could now test furniture in their own homes using this free app. AR would be used to let users visualize furniture in their homes. It would take away the stress of furniture shopping and also remove the need to return any furniture that is not suitable. 

IKEA’s free app creates a service-centred benefit. It shows that it is sensitive to the difficulties involved in furniture shopping and offers support.

With the help of AR technology, the app allows furniture shoppers to virtually furnish their homes with over 2,000 accessories and objects from IKEA.

With just their phones and the app, users can superimpose virtual replicas of IKEA furniture in their homes to give them a better idea of how the furniture will look once it is placed in its intended location. Simply take a picture of the space you want to furnish, then select the desired IKEA item. With 98% accuracy, the app automatically scales the product to the right size for the space. The app also allows you to view the fabric’s texture and render light and shadows.

The Place App was one of the first to take advantage of the ARKit, which Apple offered as an AR framework. The ARKit was later matched with Android and used the iPhone’s motion sensors, cameras, and microphones to overlay digital elements in real life.

The updated version of the Place app has new features that enhance the AR services further. The previous versions of the Place app allowed you to experiment with only one piece of virtual IKEA furniture in a real-life setting. It was not possible to use IKEA furniture to furnish a whole room but now, the Place app’s latest version allows users to furnish a room using a multi-placement option virtually. Users can also create a wishlist to save items for future purchases.

The IKEA Place app’s impact

The IKEA Place app is currently the world-leading mixed reality mobile app.

Entertainment apps such as Snapchat Lenses or Pokemon Go are often the AR applications that receive more attention, but the Place app is one of the most widely used non-gaming apps.

The app has revolutionized the digital retail experience as a whole.

The AR app received positive reviews, and the service it offered generated a lot of marketing attention. The company received substantial press media coverage for making the list of the top 50 most innovative companies, and Google searches for “IKEA AR” spiked in its introduction period.

The app positioned IKEA as a trailblazer and early adopter of technology to the service industry. It maintains its reputation as a pioneer of augmented reality experiences in retail to this day.

The Takeaway

Marketers who embrace augmented reality and use it as an innovative tool to connect with consumers are in a great position.

AR engagement has increased by nearly 20% since 2020, and conversion rates have risen by 90% for users who engage with AR compared to those who don’t. It is clear that immersive marketing is the future of Marketing. Is your brand poised to embrace it?

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