COVER STORY

Businesses today want to do more than simply sell to customers. They want to connect with them.

Organizations that can engage customers and prospects, the thinking goes, get more than a one-time purchase from those customers. They can win customer loyalty – meaning additional business in the long term both from those individuals and, potentially, from their friends and family members as those customers spread the word.

Creating a culture of engaged employees who deliver great customer service, enabling customers to interact with businesses via the channels of their choice, and personalizing products and promotions to address individual’s needs and interests are all steps businesses are taking to connect with their customers. And now some businesses are beginning to experiment with augmented reality and virtual reality to further personalize the shopping experience.

Providing shoppers with the option of experiencing a product or service via AR or VR may seem like a futuristic endeavor, but make no mistake about it, this is happening today.

Indeed, International Data Corp.’s Worldwide Semiannual Augmented and Virtual Reality Spending Guide forecasts that the augmented and virtual reality market will grow from $5.2 billion this year to more than $162 billion in 2020, representing a compound annual growth rate of 181.3 percent.

"For many years augmented and virtual reality were the stuff of science fiction. Now with powerful smartphones powering inexpensive VR headsets, the consumer market is primed for new paid and user generated content-driven experiences. Recent developments in health care demonstrated the powerful impact augmented reality headsets can have at the industry level, and over the next five years we expect to see that promise become realized in other fields like education, logistics, and manufacturing," Chris Chute, IDC’s (News - Alert) vice president of  customer insights and analysis.

"The rise of new, less expensive hardware will put virtual and augmented reality technology within the grasp of a growing numbers of companies and individuals," added Tom Mainelli, IDC’s vice president of devices and AR/VR. "But, as always, what people can do with that hardware will depend upon the applications and services that power it. In the coming years, we expect developers to create a wide range of new experiences for these devices that will fundamentally change the way many of us do work."

Automobile brands are now enabling shoppers to interact with vehicles through the magic of virtual reality. Cruise lines are leveraging VR to provide people with virtual tours of their ships. And retailers are helping folks envision what their homes would look like outfitted with new furniture or a different paint color, says Robert Wollan, senior managing director of advanced customer strategy at Accenture (News - Alert) Strategy.

Meanwhile, augmented reality can allow for faster repair times by providing technicians with virtual overlays of the products they are fixing or other operations in which they are engaged, adds Wollan. These overlays can help technicians more easily locate the part that requires manipulation and offer guidance on what to do. This application of AR also ties into customer experience because it can result in expedited maintenance, fewer service outages, and the desired results for precise procedures.

Google (News - Alert) is one of the companies driving the AR/VR revolution. It’s doing that via its Project Tango technology, which enables mobile devices to navigate the physical world much like humans do.

Fiat Chrysler Automobiles is among the businesses that are working on Project Tango initiatives. At Mobile World Congress in February the company showed off an immersive car sales application that allows consumers to view and interact with a full-scale virtual car. Accenture Digital built the prototype using Google’s Project Tango developer kit. The first commercial Project Tango device is slated to be available this summer.

“Augmented reality is set to transform the way car-buyers choose and configure vehicles through the provision of immersive technology because it provides an enjoyable, delightful experience for customers,” said Luca Mentuccia, senior managing director and head of Accenture’s Automotive practice. “We believe dealers and car buyers will be quick to embrace this enhanced way of buying a car as the new devices become readily available, taking advantage of the 360-degree mapping environment to create this unique experience.”

Toyota and Volvo have also employed VR to promote their vehicles. The Volvo effort was around the introduction of its redesigned XC90 SUV, while Toyota used VR to demonstrate its cars’ safety features.

In yet another example that this kind of thing may be the wave of the future, Audi in the second quarter was expected to debut its virtual reality experience. The German automaker previewed this application at the CES event in January.

This Audi experience employs the Bang & Olufsen headphones, either HTC (News - Alert) Vive or Oculus Rift virtual reality headsets, and iPads to enable showroom visitors to customize and interact with the Audi automobile of their choice. As Fortune reported, customers can then “move around the exterior of the vehicle, open the trunk and doors, check out the headlights and tail lights, look underneath the hood, and even get inside the vehicle and sit in the driver’s seat.”

But if customers want to go for a VR cruise, they’ll have to go elsewhere – like an AT&T store. Visitors at select AT&T stores between Feb. 19 and March 11 had the opportunity to try out VR to experience what it is like to be on a Carnival cruise ship. The VR content in this case allowed shoppers to stroll around Carnival decks, entertainment venues, and staterooms. Samsung (News - Alert) Gear VR was the technology that enabled the demonstration. And visitors to the 133 AT&T stores that participated in the VR experience were entered into a contest to win a cruise.

As noted above, and as any diehard fan of the HGTV network already knows, home improvement companies (like those who sell home theaters, furniture, paint, or just about anything else) and retailers can also use AR and VR technology to allow people to test paint colors and see what furniture will look like in a room. Wollan of Accenture says that allowing customers to see how products are used is where the shopping experience is going – from a focus on purchasing to a focus on the overall experience.

“The only way to truly grasp how transformative VR can be is to experience it,” says Michael Abrash, chief scientist at Oculus. “VR opens the door to using the full power of our perceptual capabilities to interact with digital information. It’s a difference of kind rather than degree; VR is a substrate that subsumes all previous communications channels, every one of which can be implemented within VR. Taken to its logical conclusion, virtual reality is the ultimate limit to what we are capable of experiencing.”