Magnetic Thought Report: New Digital Worlds

The world we’re shaping tomorrow through the trends emerging today. Continuing our series on the big topics on leaders’ minds, next in our series of articles we are chatting about new digital worlds. If you missed our first article, catch up here.

XR (Extended reality) — where virtual meets reality

Today’s digital dimensions are more than just the virtual expanses and different corners of the internet; they’re the merging of digital and physical that are evolving our lived experience. These new dimensions are not limited by geography but instead are shaped by, and as expansive as, our imaginations. Every shared interaction stitches together a new piece of
this multi-layered, multi-dimensional, human/virtual quilt.

AR (Augmented Reality) has come up fast behind VR (Virtual reality) and without the barrier to use a big, clunky headset — is poised to overtake it. Things like augmented shopping, AR gaming and Snapchat’s AR filters are part of life. There are now thousands of AR apps on Apple’s App Store.

With the rapid development and innovation that’s happening in the industry, the growth potential is huge. The global XR market — VR, AR and MR (mixed reality) — was worth $64bn in 2022 and is predicted to grow almost tenfold by 2028, to $604bn. B2B adoption is growing significantly and VC investment is in the billions.

As well as the technology itself this growth is being driven by consumer demand and by sectors including gaming and entertainment, military training, education and cultural heritage preservation. There are concerns, such as ethical, psychological, deepfake technology, fake news, misrepresentation and online crime, especially as these technologies can involve connecting multiple platforms and data. Unintended consequences, just as with AI, need careful consideration and debate.

How would we mitigate and regulate virtual crimes, from bullying and harassment to financial?

What are the potential psychological effects of immersive reality, and what safeguards would we need?

Nevertheless, it has the potential to transform multiple industries, including manufacturing, transport, agriculture and construction. I’m excited by three in particular: healthcare, education and retail.

Inspiring example Barbie’s Times Square takeover Gap and Mattel promoted their Barbie collection using Google’s Geospacial Creator to create an immersive AR experience. Gap’s flagship store and surrounding skyline became a cinematic — and shoppable — 3D experience with lifelike dolls and Barbie-inspired colours and graphics, all accessed by scanning a QR code on the shop window.

Three areas of opportunity

Healthcare

VR is being used to help train surgeons, and AR smart glasses are assisting in procedures by giving surgeons real-time patient data and 3D anatomical images without needing to check a separate computer screen, keeping their hands free to work. Other uses include surgical planning, remote surgical collaboration across countries, livestreaming the surgeon’s view of operations to medical students, medical imaging, digital healthcare, patient self-care (e.g. AR use in physio and physical rehab) and patient education.

• Mental health care, using VR/AR in psycho-educational tools to explore different scenarios. A review by Nice in 2023 found that this could improve knowledge, attitudes and empathy for conditions such as anxiety, depression, dementia and psychotic illnesses.
• Indoor and outdoor wayfinding in large hospitals with multiple floors and buildings. With AR overlaid on real-time images on their phone, patients, visitors and new staff could easily orient themselves — improving the human experience in an often stressful place.

Education

XR in education and training is a big potential growth area. It can provide immersive and interactive learning experiences, with realistic simulations that improve understanding and engagement. Examples include historical
recreations for students, scientific simulations for researchers, or hands-on skills and procedures training for employees — especially useful for
unusual or dangerous scenarios that are difficult to reproduce safely in real life.

• Learning and development: 63% of companies that have entered the metaverse have used it for L&D for employees.
• Training for non-desk workers (~80% of the workforce), to learn new specialist and technical skills in simulated scenarios; scalable programmes, with consistency in the quality of delivery across locations.

Retail

Retailers who have adopted and trialled AR to create new digital shopping experiences include Amazon, Nike, Burberry, Mac, Ikea, Anthropologie and Superdrug. AR has created immersive environments where shoppers can browse virtual showrooms, try on clothes and make-up, see what furniture would look like in their home, interact with products, and purchase. This can reduce returns, increase engagement, personalise shoppers’ experiences, build loyalty and give retailers valuable data on customer behaviour.

Inspiring example — Ikea’s Place App. This was one of the first consumer AR apps. Point your phone camera at your room and select any item from Ikea’s catalogue to (virtually) appear, showing how it would look and fit in your home.

A 2023 Storyblok survey of 6,000 consumers and 500 ecommerce business leaders found that 42% of customers (32% in the UK) think an AR experience would encourage them to purchase. I’m hearing that brands often want to become — and have become — more experiential, but that there can be a gap in customers’ expectations and what the technology can provide. Plus, it’s a big investment. This makes it crucial to find out which experiences your customers actually want and if the ROI is worth it.

• Younger consumers. 93% of Snapchatters are interested in using AR for shopping (most of its audience is aged 18–24, 25–34 and 13–17). Their top reasons are to see what suits them, make online shopping easier, make it more fun and sociable, and get friends’ and family’s opinions. Half are looking for brands to create connections with them.
• Google’s Geospacial Creator. This new AR platform, launched in 2023, allows brands to create geolocation-based AR/MR experiences by attaching virtual content to any public space around the world that’s mapped by Google. Creators can build, preview and publish 3D digital content, to be accessed by people in the physical space. It has creative, educational and storytelling potential for retail and other sectors.

Magnetic example — A metaverse community for pet parents. We worked with a multinational petcare business to identify threats and opportunities to test in the metaverse. Using insights from our research and interviews, we discovered that pet parents struggle to find reliable and relevant information about pet parenthood and veterinary care.

Through experiments and user testing, we developed a proof of concept: a metaverse experience that would test the ability to provide reliable and engaging information, and create an immersive community as well as connection in the real world. We then held a live metaverse event with 300 pet parents.

The success of the event showed that the concept resonated with them, and the project team was able to recommend that the business invest in it. We showed that the metaverse experience is able to deliver education and community in an immersive, engaging way, in an ecosystem that creates conversion opportunities — and, in a future phase, a new revenue stream.

CEO’s POV

Beyond keeping customers and employees engaged and personalising their experiences, XR helps people expand their worlds with new possibilities and interactions. But technologies with such vast reach and scope come with a duality. On one hand, these digital dimensions can connect people in shared experiences and democratise information; on the other, we know the dangers of tech addiction and the isolation and mental health issues it can lead to.

So what can we do? As we travel around these new worlds, we have to remember (just as with AI) that technology is a tool created by and for humans. It’s in our hands and our responsibility to shape it around our highest ideals and values, so that we consciously design a better future for people and society.

This is an exert from our latest Thought Report, the full report can be downloaded here.

Author: Jenny Burns, Magnetic CEO

Jenny is always happy to talk about the issues teams and businesses are facing, and how we can unpack problems together to find and design for unmet needs. Coffee? Email jenny.burns@wearemagnetic.com.