HomeInsightsExtended reality – a risk worth taking?

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Extended reality has seen a huge spike in interest over the last 12 months as millions of people have sought out new and socially distanced ways to interact with their friends, colleagues, and families.

The evolution has also been driven by the growing potential applications of virtual reality (VR), augmented reality (AR) and an array of other technologies that make up the extended reality landscape. There’s the potential here to transform numerous industries by creating new ways of providing entertainment, marketing, and even product packaging, to improve the consumer experience.

With high-immersive extended reality systems finally close to achieving ‘mass market’ status, companies are spending huge sums of money trying to better understand how consumers interact with and behave in the digital world.

AR is arguably the most effective method of virtual marketing. It requires only a phone or desktop app to overlay digital images into the real world and is far more accessible and cost-effective for consumers than investing in the VR hardware necessary for a headset experience. Furthermore, if a good set of AR goggles hits the market (opinion is still divided on what form Apple’s highly anticipated extended reality offering will take, or whether Microsoft Mesh will deliver on its early promise) then the developing bank of AR applications will find an even stronger foothold.

Brands are already adopting AR marketing to give customers a virtual “try before you buy” option. It’s been shown that if consumers can be provided with a complete and integrated view of a product, particularly if placed in the context of their own home or on their own body, then it’s significantly less likely that they’ll want to return it. Fewer returns mean lower costs and more revenue for businesses. It also means less waste from products that can’t be resold.

The ability to take a digital version of a product and ‘overlay’ it into the physical world is potentially a very powerful tool.

Hot on the heels on this opportunity is the risk of products and branding being overlaid or even scrubbed away by competitors. What if, for example, a clothes company offers discounts to their customers if they install an app that digitally deletes all competitor branding from their visual field? We’ve already seen early examples of guerrilla AR brand wars, most prominently when a high-profile fast-food chain created an app that allowed consumers to digitally ‘burn’ the posters of competing restaurants. This sort of approach will only become more sophisticated as AR develops.

The potential risks can be taken a step further. What if an AR overlay allows a company to imprint their branding across, say, The London Eye, or the kit of Premier League Football team? In this mixed digital reality, how can any company ensure that their IP, reputation and associations are secure, or that their chosen sponsors and collaborators are achieving the publicity and exposure necessary to make that relationship worthwhile?

In short, if companies are hoping to access customers via extended reality, they need to be aware of the risks presented by this technology and particularly of the more invasive applications of it.

They will also need to carefully monitor their own activities to ensure they aren’t treading on the toes of competing copyright and IP. The solution will, inevitably, be an evolving combination of legal protections and technological innovation.

If you enjoyed this article, you can find similar pieces in our Expert Insight on Consumer Law & Regulatory Compliance Brochure.