Virtual reality (VR) and augmented reality (AR) have become a part of consumers’ lives. According to the estimates of Price Waterhouse Coopers (PwC 2019), VR and AR have the potential to boost the global GDP by 1.5 trillion USD come 2030.
For marketers, VR and AR technologies have opened exciting and even lucrative doors in terms of offering customers new ways to communicate with their brands. In addition to the interesting new opportunities, there are also quite vocal issues that cannot be overlooked.
Understanding how human mind works
The shift from traditional marketing methods to utilizing VR and AR technologies requires a thorough understanding of the human mind and behavior. Although marketing has always related to creating positive images in the minds of potential or existing customers, now this is done virtually without physical evidence. This means that more emphasis is set on making the virtual experience so authentic and powerful that the mind believes it to be true.
Take the metaverse, for instance, which is a virtual world that utilizes VR, AR, and several other technologies. Someday, people can live in the metaverse as three-dimensional avatars the same way, or more extravagantly, they do now in the physical world. Although the metaverse pictured like this does not exist yet, we are strongly moving into that direction and organizations are getting ready. (Tucci 2022.) Soon, the physical products are not physical any longer, but people consume their virtual versions, such as taste the virtual food and feel stimulated by the virtual coffee.
The reason for this is that 85 percent of the human mind is subconscious which means that most often, we are not even aware of why we make certain decisions or behave in a certain way. Marketing messages, virtual experiences and influencing are taken in mostly subconsciously. (Alonso 30 September 2022.) This could be compared to the placebo effect where the mind thinks something unreal is real and the body reacts accordingly.
Opportunities and risks in their many forms
Today, the new technologies offer organizations creative ways to engage with their customers. Instead of promoting one-sidedly, or interacting like all others, brands can offer two-way and three-dimensional discussion methods and virtual spaces where customers can truly experience the products and services. As one of the main goals in marketing is to enable brands to stand out from the crowd, what could be better than giving the customers a unique chance to interact even from the comfort of their own homes.
Many brands have already utilized the new technologies and seen the benefits in, for example, storytelling, event production, virtual facility tours, product trainings, gamification, virtual try-before-you-buy apps, and many, many more (Mileva 2022). These ways of communication make the brand seem more relatable and leave a lasting mark in customers minds. When it’s time to purchase, the brands which have left a mark are preferred to others. The potential is vast and constantly growing.
On the other hand, utilizing the new technologies in marketing is not all positive but comes with risks that should be noted. Issues concerning the protection of the vast amounts of personal data, ethical usage of the data and security of the virtual identities have been discussed for years and still no solid and commonly agreed on solution has been found. The more the new technologies are being used the more data is given about the human behavior and personal habits. Where this data is stored, who owns it and how it can be used are some of the issues that still need clarification.
Also, the impact the new technologies have on our mental well-being is still controversial and should be followed. Thus, although the use of the new technologies offers countless opportunities, organizations need to set ethical dimensions first and profits second.
Virtual reality is a computer-generated and interactive environment that enables the user to experience a world which is beyond reality (Boyd & Koles 2019, 442).
Augmented reality is broadly defined “a situation in which real world context is dynamically overlaid with coherent location or context sensitive virtual information” (Klopfer & Squire 2008, 205).
One major difference between AR and VR is that in AR, the real physical environment is present whereas in VR, the environment is purely digital and artificial (Rauschnabel, Felix, Hinsch, Shahab & Alt 2022).
Alonso, V. 30 September 2022. Martin Lindstrom – Building a Brand for the 2030s. Nordic Business Forum blog. Accessed: 23 January 2023.
Boyd, D. E. & Koles, B. 2019. An Introduction to the Special Issue ‘Virtual Reality in Marketing’: Definition, Theory and Practice. Journal of business research, 100, pp. 441–444.
Klopfer, E. & Squire, K. 2008. Environmental Detectives – The Development of an Augmented Reality Platform for Environmental Simulations. Educational technology research and development, 56, 2, pp. 203–228.
Mileva, G. 2022. Top 15 VR Marketing Examples for 2023. Accessed: 22 January 2023.
PwC 2019. Seeing is believing. How virtual reality and augmented reality are transforming business and the economy. Accessed: 12 January 2023.
Rauschnabel, P. A., Felix, R., Hinsch, C., Shahab, H. & Alt, F. 2022. What is XR? Towards a Framework for Augmented and Virtual Reality. Computers in human behavior, 133, 107289.
Tucci, L. 2022. What is the metaverse? An explanation and in-depth guide. Accessed: 23 January 2023.