Augmented Reality Shifts From ‘Toy’ to Practical Tool

As more consumers use augmented reality to try out products and engage with brands, companies can leverage the technology to redefine the digital customer experience.

Augmented reality (AR), which got its start as a technology for gaming and other entertainment applications, has shifted to a serious utility that businesses are using to improve the customer experience and boost the bottom line. Once used primarily by consumers as a “toy” for trying out hairstyles on mobile devices or sending funny videos to friends, AR is now a meaningful engagement tool that is helping brands increase connections with customers and drive conversions, according to a new study by Deloitte Digital and Snap Inc.

The report, which was based on a survey of 15,000 U.S. and international consumers, projects that, by 2025, roughly 4.3 billion global consumers will use AR on a frequent basis, up from 1.5 billion today. And while 65% of consumers surveyed say they use AR to have fun—the biggest driver for AR use today—76% expect to use it as a practical tool in their everyday lives, according to the study.

Brands can leverage AR to elevate the customer experience by understanding usage patterns, preferences, and shopping behaviors of consumers who are experimenting with and adopting the technology.

The expansion of AR usage is having a major impact on how purchasing decisions are made, especially as consumers seek more personalized and engaging experiences.

Younger Generations Drive AR Growth

As with many new technological advancements, younger generations are driving usage and adoption rates of AR today. According to the Deloitte and Snap study, younger people (Gen Z and millennials) are 71% more likely than older generations (Gen X and boomers) to use AR all the time. Older generations are nearly 20% more likely than younger generations to view AR as primarily practical, the study found.

Just how are consumers using AR? According to the report, 67% of global consumers use AR primarily at home for functions including communications (74%), gaming (55%), media and entertainment (52%), and shopping (41%). In the next year, consumers plan on using AR more in four key growth areas: media (up 50%), shopping (up 46%), gaming (up 41%), and communications (up 35%).

In the report, consumers give examples of how they would like to use AR in the future. For example, in the media category, 31% of consumers say they would like to create their own interactive media plots by guiding characters through a script. And in the shopping category, 54% of consumers say they would like to readily view information about a product after scanning it with their phone’s camera. Brands have an opportunity to reach across all generations by delivering AR experiences that meet evolving consumer needs and preferences.

AR Improves Brand Experience and Conversions

The expansion of AR usage is having a major impact on how purchasing decisions are made, especially as consumers seek more personalized and engaging experiences. According to the study, more than 100 million consumers have shopped using AR either online or in-store; 94% agree they’ll use AR the same amount or more when shopping next year. And brands are benefiting: Companies with branded AR experiences are 41% more likely to be considered by consumers than those without AR experiences, and nearly three-quarters of consumers say they're willing to pay more for a product that promises the transparency AR can provide, the study finds.

AR is also changing the ways consumers engage with the products they’re looking to buy: Fifty-six percent of those surveyed say AR gives them more confidence about product quality, and more than half say they want to use AR technology for a risk-free “try before you buy” experience. This ability to have more engaging experiences with products is driving conversions. Significantly, interacting with products that include AR experiences leads to a 94% higher conversion rate, according to the survey.

COVID-19 Accelerates AR Adoption and Spending

The pandemic has reinforced AR’s importance as a bridge between the physical and digital worlds, as consumers have sought new ways to shop for products and services—a shift that could have lasting effects for brands and consumers even after the crisis subsides. More than half of consumers surveyed (56%) say COVID-19 has made shopping with AR more rewarding and fun, and the same percentage say the pandemic has made AR digital experiences more important. Furthermore, 59% of consumers say COVID-19 has made AR tech innovations more important than ever.

Demand for AR is driving investment in the technology: Worldwide spending on AR and virtual reality is forecast to grow from just over $12 billion this year to $72.8 billion in 2024. In order to unlock AR’s true potential, brands, developers, and platforms will need to work together to accelerate content development and grow the AR ecosystem.


As AR evolves, it will revolutionize people’s lives and become as significant a technology shift as the web or mobile was to society—changing how consumers view and interact with the world around them. Brands that meet the demand for AR experiences today may be more likely to gain market share in the future.

—by Allan Cook, managing director and Digital Reality Business leader, Deloitte Digital, Deloitte Consulting LLP; and Lauryl Schraedly, global head of marketing insights and strategy, Snap Inc.


