Experiential Marketing & VR/AR: The Future of Brands?

Rui Rodrigues
Jan 12, 2018 · 5 min read

Millennials are fans of experiences — they are much more meaningful to them than owning a material, physical item, as recent studies show. In fact, 72% say they would like to increase their spending on experiences in the future, rather than on physical things.

What are the implications of this trend and how can companies respond to it?

Experience: the ultimate way for delivering value

Experiences are starting to be seen as the ultimate stage of delivering value to consumers. When most economies were still agrarian, the concept of product in itself started by only including simple and raw commodities, turning into goods when Industrial Revolution came in. As the working force started moving into the third sector, the concept grew to include services and intangibility. Today, consumers seek memorable, personal and meaningful experiences rather than anything else.

Starbucks created an experience which is almost impossible for competitors to replicate.

Everyone knows the Starbucks example. Coffee, when extracted as a raw material, is worth 3 cents. In a supermarket, when treated as a good and after having been ground, filtered and packaged, it can cost an average of 15 cents. The service of brewing that same coffee in a regular cafe may cost you 1 euro. However, after surrounding that service with the experience and ambience of a Starbucks, it allows the company to charge up to 5 euros for that very same cup of coffee.

Customers are willing to pay a premium price for a meaningful and tailored experience.

Experiential Marketing: seeking authenticity

As Starbucks, many other companies have been trying to create experiences. Inevitably, this created a variation inside Marketing, which is now known as “Experiential Marketing”. In this, marketers try to immerse the consumers within the brand by engaging as many human senses as possible. In the end, the goal is to form a memorable and emotional connection between the consumer and the brand, so that it may generate customer loyalty and influence the purchase decision in the future.

Recent studies also show the increasing importance given to “authenticity”, when brands design their experiences. It may seem counterintuitive to say it when, apparently, millennials spend hours each day on social media glamorizing their own lives and altering their personas, but it is a fact they are attracted to honest, transparent and authentic brands. According to a study from Cohn & Wolfe which spread over 12 markets, authentic characteristics such as communicating honestly about products and services (91%) is more important to consumers than product utility (61%), brand appeal (60%) or popularity (39%).

A great example of authenticity in experiential marketing is to develop a campaign designed to educate and share a product with your consumers rather than trying to get something from them, such as an email contact. The goal should be to simply have a conversation with consumers. See the Facebook example below.

Facebook used the vast database it has on its consumers to curate live scenes, in what was called as “FacebookIQ”. The campaign was not just memorable, but also proved to be really helpful — 93% of attendees said that the experience provided them with valuable insights on how to use Facebook for business, for instance. The result? Authenticity and a great positive connection with the brand.

What does all of this have to do with VR/AR?

Obviously, this poses a great opportunity for Virtual and Augmented Reality. Both are vehicles to activate all senses and immerse the consumer within a specific branded experience. They can easily be the starting point for a conversation with the consumer.

Virtual Reality lets you create a detailed world by using a pair of glasses. Consumers can look around a virtual space, as if they were actually there, and interact with it — which results in highly immersive experiences.

On the flip side, Augmented Reality gives you the ability to overlay additional information and visual stimulus on top of specific real items, combining the digital world with the physical one, in a targeted and seamless way — it’s much more than catching Pokemons actually. This can be done either through a pair of glasses or your mobile phone.

Patrón developed an experience which is authentic to the brand and immerses consumers in the process of making tequila.

The beverage industries are a great example of how companies can reshape their experiences using VR. Patrón, for instance, used VR to showcase the process of making its tequila (something most of its consumers may not know) from the distinct point of view of a bee; or Innis & Gunn, which added a new sensorial dimension to its beer tasting by showing special places in Scotland which inspired its beer. Note how both companies are not directly trying to push consumers to buy the product, but rather educating them about the product, through an experience they will hardly forget. The idea is that next time they see a Patrón tequila or an Innis & Gunn beer, they will be more likely to buy it, given their already established relationship with the brand.

The first AR menu was accomplished in London, by City Social.

In the AR realm, one can look to City Social, which, for instance, created the world’s first AR cocktail menu in a bar in London. This allowed the company to differentiate itself and engage the consumer, by debuting special visuals for each drink. On the other hand, Remy Martin took a pair of Microsoft Hololens to guide the consumer through their “Root in Excellence” experience, showing the secret of making a cognac.

Implications for Marketers

Virtual and Augmented Reality have an incredible potential for helping marketers providing memorable, meaningful and — most important of all — authentic experiences. By educating the consumer about the product, these experiences can easily be the starting point for a dialogue with the brand.

As the development of these technologies gains momentum, costs for creating these experiences will also decrease. Apple and Google are investing millions to further develop their AR kits (enabling everyone with an iOS or Android phone to access enhanced AR experiences) and Oculus and HTC, for instance, are cutting down the prices of their VR headsets, while adding features intended to create the most immersive experience possible.

In a world where consumers (not just millennials) tend to be overwhelmed by brands fighting fiercely for their attention, the capacity for creating authentic and meaningful experiences will be key to stand out from the crowd.

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