Industry 4.0: Unlocking the potential of augmented reality

This article first appeared in Enterprise, The Edge Malaysia Weekly, on May 11, 2020 - May 17, 2020.
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The increasingly complex industry of augmented reality (AR) has generally been placed in the same basket as other Industrial Revolution 4.0 (IR4.0) products such as virtual reality (VR), the Internet of Things (IoT) and blockchain. Hence, it is easy to mistake AR as a single technological entity.

The technology is much more nuanced than most people think and it pays to know that not all AR products are created equal, each adopting different methodologies to serve different use cases. Some are marker-based AR, allowing apps to automatically translate billboards and signboards on the fly, anchoring the translated text over the original text. Some are markerless AR, which are used to place virtual furniture or objects in a room without the need for markers.

Some are even location-based, the best example being the popular mobile gaming app Pokemon Go. There are also practical use cases such as AR City, an app that allows tourists to navigate unfamiliar cities on foot by following on-screen 3D directions while displaying touristy information on places of interest nearby.

The new AR tool in town is called WebAR, the first of its kind in Malaysia brought over from the land of the rising sun. Eeevo Malaysia is a Japanese IT firm specialising in marketing, web development and human resources. It launched WebAR last December as part of its arsenal of marketing services.

“WebAR allows users to interact with objects in virtual space in real time as a marketing tool. What makes it different from most of the other AR is that it does not need a special app to launch,” says Eeevo marketing director Yuki Jo.

“Customers can use QR codes or a weblink to access the website and use the AR directly from the website itself without the need for an app. It is a markerless AR, so users can place the item anywhere in the room with an accurate size and depiction.”

Yuki explains that the simple act of migrating AR away from apps and into the HTML realm has addressed several key concerns and pain points faced by most marketers. Many brands do not have their own proprietary app, nor do they want to invest heavily in expensive infrastructure and development costs to build an app from scratch.

According to US-based marketing analytics firm Localytics, 21% of users abandon an app after using it only once. It is also reported that 71% of all app users, across all industries, churn within 90 days of installing the app.

WebAR can alleviate much of the development costs and risks that come with adopting AR as a marketing tool, something that is relatively new and unproven in the Malaysian market. Not only does it make AR more accessible to marketers, it greatly streamlines the user experience.

Eeevo CEO Noritaka Araki says while there are not many case studies in Malaysia, WebAR is gaining traction in Finland and Japan as a marketing tool. It has been used as a permanent widget on e-commerce websites, a customer engagement tool during exhibitions and a support tool for sales departments.

“WebAR is best used for marketing large products that are hard to transport and carry. With WebAR, you will have an image of the product in its actual size and you can customise the colour or model of the product,” says Noritaka.

“It is very suitable for interior design and furniture to see if it fits with the environment and overall atmosphere of the room. So, we are looking at things like furniture, kitchen and other electrical appliances, cars and musical instruments such as pianos and drums.”

He points out that WebAR is more practical for low-quantity, high-value goods due to the cost of implementation. Its services start at about RM9,000, which poses a financial barrier for start-ups and small enterprises as well as industries with an extensive range of products like fast-moving consumer goods and fashion.

But once properly implemented, AR has proved to be a very effective marketing tool. Houzz, a US-based home renovation and design platform, has more than one million users using its in-app AR features. The company says users who use the AR services are 11 times more likely to purchase goods and spend 2.7 times more time on the app.

After acquiring AR company ModiFace, L’Oréal had double the engagement time and triple the conversion rates after implementing AR features on its website and app, which allow users to visualise the effects of beauty products on their faces using their smartphone before deciding to buy.

At press time, there were not any conclusive case studies and statistics on the effectiveness of WebAR specifically, due to its relative newness in the market. However, Eeevo is positive it will do well in Malaysia.

Noritaka says that with the advent of 5G and other advancements in IR4.0, many marketers are implementing these technologies to achieve their in-house marketing goals, indicating that there is a healthy demand for such services. However, WebAR is not without its drawbacks. While it is much more accessible to users, it cannot perform at the same capacity as an in-app AR in terms of features and functionality, says Yuki.

“The technology is still new and expanding. WebAR has yet to reach the stage where it can perform advanced animations. Features like replacing KFC or McDonald’s advertisements with Burger King advertisements in the 2019 campaign ‘Burn That Ad’ is still not possible for WebAR.

“The best use case right now is to display accurate depictions of product models using QR codes or web links. Normal WebAR is sufficient for most clients, especially those with large products in the manufacturing industry. It is easier for their sales team as they can demonstrate their products and come up with proposals for the clients on the spot.”

Noritaka says merely implementing AR features on websites or apps does not guarantee results. To maximise WebAR’s effectiveness, Eeevo has bundled the service with its marketing packages instead of offering it as a standalone service.

“Our company is mainly focused on digital marketing products. By bundling WebAR with our other services, it is easier for our clients to understand that it is part of the entire package,” he says.

“It is bundled with media buying, press conferences, influencers, public relations and so on — as part of a campaign. But of course, we plan to include it in catalogues and online websites as well. It can be discussed and it is a possibility.”

Noritaka says he is interested in elevating WebAR into a core component of Eeevo’s business model. However, he is taking a wait-and-see approach despite having the first-mover advantage. By bundling the technology with other services, the company can spread its risk as it gauges the demand for WebAR services before fully committing to it.

Eeevo is heading into uncharted territory as there is no precedent for WebAR services and it has no direct competitors yet, says Noritaka. However, meeting with prospective clients has shown that many are interested in what the technology can offer.

However, the RM9,000 price tag is a huge deterrent for many of them. So far, Eeevo has seen more positive results from multinational corporations and foreign companies than local small and medium enterprises.

Nevertheless, Noritaka remains steadfast on the pricing, considering the R&D that went into the product. He believes that 5G will eventually bring about change in the world of commerce and that WebAR is a communication tool that is able to deliver a large amount of information in a very easy to understand and interactive way.

“We implement WebAR not only to disseminate information but also for users to experience the product itself. It gives users a much more immersive experience on the website, which allows brands to stand out from the competition,” he says.

“So, rather than just black and white text and a few photos, brands will have a more creative outlet to attract users to stay on their websites longer, direct them to buy products and drive sales conversions.”