Innovation and disruption have been at the core of the digital technology boom. We continue to see record venture capital investment rounds in financial technology, insurance technology, medical technology and others, while relatively new industries like virtual and augmented reality are beginning to see increased deal volume. According to CB Insights, a data analysis website, 2017 will see about 300 deals by year’s end, “which would translate to a 47 percent increase” to $2.16 billion in funding, eclipsing the 2016 record by 3 percent.
There’s a certain affinity for new products and ideas that offer streamlined alternatives to the status quo. That’s why the financial services industry, for instance, is seeing new innovations in regulation technology to maintain compliance with post-recession mandates. That’s why insurance carriers are beginning to use more data-driven technologies to find new ways to assess and evaluate risk, albeit being admittedly slower to adoption than other industries. That’s why the health care industry is utilizing augmented reality to better train doctors in their respective fields while using big data and analytics to improve quality of care and centralize records.
The overriding theme of this type of innovation is embedded in a desire to solve or streamline back office processes, to save time, money and other resources to increase a business’s ability to achieve their bottom lines.
Rarely do we see the customer-facing innovation that definitively solves a real-world need—or makes an aspect of life more convenient—for large groups of people. When that sort of customer-facing innovation is present, especially in relatively new industries like augmented and virtual reality, it’s often built to entice the consumer to purchase something he or she may not really need but should want, something more forward-looking that doesn’t solve a critical need for the consumer or clearly satisfy demand in some way. Google Glasses comes to mind, an undoubtedly sexy product that had little to no function for the purchaser and quickly turned to failure.
As augmented reality investment continues to increase, more focus will need to be placed on changing and optimizing the customer experience to solve real-world problems rather than create entirely new experiences that people may not even want.
Identifying those needs and innovating to create demand-driven products will enable the companies developing them to insert themselves into customers’ everyday routines, becoming part of the customer journey and inspiring brand loyalty in ways that back-end innovation simply cannot. It’s why, for instance, banks with the best digital banking platforms consistently rate highest in customer experience, or why Amazon, Google, and Apple are in the midst of a voice-enabled IoT war with Alexa, Home and HomePod, respectively.
Within the context of augmented reality, the mandate to provide customer-centric products that solve real needs becomes even more crucial and will be a critical business driver for companies that attempt to enter the space and provide such products. Past failures have already confirmed that unless you’re solving a need, the chances of success are low, because the allure of virtual content overlaid on real-world experiences will only get you so far in the customer’s eyes or, in PLNAR’s case, the customer’s hands.