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Augmented Reality: The Impending Battle for Digital Real Estate

Posted September 23, 2010
Posted in Marketing, Technology, The Future, Trends

Imagine this….

You drive a moving van outfitted with retail fixtures, signs, a cash register and loads of jewellery up Fifth Avenue in Manhattan, park directly in front of Tiffany & Co. You swing open the doors and start selling to the throngs of people passing by.  You make a fortune and never pay a penny in wages or rent.  Best of all there’s nothing Tiffany can do to stop you.   Sound preposterous?  In the physical world it would be but in the world of augmented reality it’s entirely possible and to a growing extent, it’s happening.

What is Augmented Reality?

Augmented reality is the layering of digital information onto real life objects and places.  These digital content layers are then viewable with computers or smartphones and may take the form of text, video, or images.  While still very

Augmented reality kiosks in the Lego store

much in its infancy, examples of augmented reality are turning up sporadically in the consumer market.  Lego for  example, has incorporated the technology into some of its packaging, allowing consumers to not only see what a particular Lego box contains but also to view a moving virtual model of the completed set via in-store monitors.

When Digital and Physical Worlds Collide…

Location-based augmented reality requires that the user actually be in a particular location in order to interact with the digital content positioned there.  With some basic web programming skills, almost anyone can create digital content and place it just about anywhere in the physical realm, including some of the most prestigious shopping avenues in the world.  French clothing brand Hostage Wear for example has opened over 20 A/R shops in some of the world’s best known venues including Piccadilly Circus, Red Square, Venice Beach and Madison Square Park.

Protecting Your Augmented Real Estate

All this raises some mind-bending questions about the eventual meeting point between digital content and physical location.   As augmented reality increases in usage, could we see potential turf wars between physical retail businesses and digital businesses vying for consumer attention in the same locations?  Could this collision of the real and the virtual test the definition of what constitutes real estate?

One of over 20 augmented reality shops worldwide by French brand Hostage Wear. This one is located in Amsterdam's Rietland Park

“I look forward to these kinds of challenges” says Maarten Lens-Fitzgerald, co-founder of Layar, a pioneer in the field of mobile augmented reality. “It will mean that the virtual space is valuable.”  Layar currently has one million active users world-wide and according to Mr. Lens-Fitzgerald is growing at a dramatic pace.  With over 3000 Layar developers worldwide, the potential for rapid escalation in the number of augmented reality projects is significant.

So, could we see a time where digital space associated with a specific location is bought and sold like physical real estate?  From Lens-Fitzgerald’s point of view the answer is no. Given that there are no limits to the amount of digital content that can be associated with a particular location; he does not foresee digital space having the same finite characteristics as real estate.  However, he does see augmented reality advertising space being sold in and around specific high traffic geographic locations.

Start Now

And what can retail brands do to stake out the digital space around their locations?  Lens-Fitzgerald’s advice is “Not to approach the issue from a defensive position”.  He maintains that brands should be developing augmented reality experiences now.  Even if they don’t have the longer-term strategy in place, they should at least begin developing an approach.  He points out that with the advent of mobile applications that organize nearby A/R content according to popularity and relevance, low quality A/R content and experiences will simply fall to the bottom of the list.  In the end, he maintains, whoever “owns the best A/R experience” will win.

COMMENTS

  • mdusing  says:

    It is key to note that AR is here and will continue to grow in the future. Although everyone likes to peg AR as in its “infancy” the technology has been around for 20+ years. At this point in the game you can execute any promotion you can think of, it simply requires working with the right people.

    The true value of AR in my opinion lies in the enhancement of the physical. I don’t believe there is a turf war so much as a goal of education. AR allows the retailer or marketer to provide the consumer with the information they desire at the exact moment the information is valid. What better way to influence a shopper’s decision making process then to provide them with all the answers at shelf? The future is coming for retail.

    If you are interested in learning more about AR and retail please visit michael.dusing.com/ar

    Reply
  • Lori Schafer  says:

    Retail Prophet. Well written and thought provoking article. As you mentioned, several retailers are already experimenting with AR and AR mobile and enjoying success. Pizza Hut has an AR app for the iPhone which helps direct people to the nearest Pizza Hut store. Fashionista and Cisco are experimenting with AR dressing rooms (check out Cisco’s video on YouTube). Retailers need to become more immersed in the mobile, AR and social worlds. To learn more about how leading retailers are using these applications, please see http://www.brandedretailer.com and the new book Branded! How Retailers Engage Consumers with Social Media and Mobility

    Reply
    • Doug  says:

      To anyone just picking up on this comment thread, I highly recommend you pick up Lori’s book (link above). I had the pleasure of interviewing Lori and Co-Author Bernie Brennan at the National Retail Federation Conference this year and the book has a bunch of really great case studies and examples of how retailers are leveraging emerging technologies to create new consumer experiences.

      Reply
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