Picture yourself walking down the street on a busy weekday. You look up to see what special treats are on display in your favorite local bakery’s window. As you scan the usual favorites, your eye catches a delectable creation that you’ve never seen before. You grab your smartphone and open the bakery’s mobile app. As you hover your phone’s camera over the bakery’s storefront menu, this tasty-looking treat instantly appears on your phone’s screen and you learn its ingredients. You simultaneously discover the bakery’s current promotional specials along with their second store opening, which happens to be near your parents’ home.

You have just experienced augmented reality.

Through computer-generated sensory input technology, augmented reality allows us to view and connect with the physical world through our digital devices, democratizing the production and consumption of information relevant to the world around us. Contrasted to virtual reality, which replaces the real world with a simulated one, augmented reality enhances our perception of reality. Computer generated objects appear to coexist in the same space as the real world. According to IEEE Computer Graphics and Applications, cameras attached to handheld displays, such as smartphones, act as a window or a magnifying glass that shows the real objects with an augmented reality overlay. With this added digital vision and recognition running in real-time, the world around us becomes interactive and responsive.

In 2015, augmented reality may feel like a smartphone before the iPhone hit the market, but this new interactive tool is becoming increasingly popular in the U.S. and U.K, marketing itself to anyone who is comfortable with using mobile apps. Though mobile apps are far more reactive, augmented reality software and services compare to the economics of today’s mobile market. Tim Merel, Digi-Capital founder and managing director, forecasts that augmented reality could hit $120 billion revenue by 2020, overtaking the mobile app market.1

Augmented reality is becoming a new reality in digital marketing for hospitality. This digital marketing tool separates itself by leveraging proactive technology, allowing restaurant and hotel guests to connect with their surroundings on a deeper level. This fully immersive technology gives the hospitality industry an interactive marketing model that helps close the sale at the customer’s request.

As the modern consumer becomes more reliant on digital devices, sales agents are shifting their direct marketing strategies of in-person points of contact to that of digital marketing. In an experience economy, customers focus on participation and absorption during the consumption process, rather than the actual products or services supporting augmented reality to deliver both emotional and functional value.2

With the rapid adoption and expected increasing value of the augmented reality market, brands are more inclined to consider this technology as a serious option going forward. One challenge to the adoption of augmented reality is the lack of research studies in the field.

Jay Haverty, CEO of d50 Media which is a marketing service that uses multiple media platforms to attract and maintain customers, sees augmented reality as a tool to generate PR buzz for a brief period, but does not see many long term uses for this technology in the US market. He explained that, “Until both major phone platforms of android and iOS natively support the reading of the real life markers that trigger augmented reality products, like QR codes on the basic side, without the user needing to download and launch a special application, it simply won’t be used by consumers in enough volume to be worth the time and effort.”

For the hospitality industry, however, Haverty sees a potential market for internal navigation of large properties to critical locations such as spas, restaurants, and concert halls. Doing so would involve placing internal Wi-Fi signals or Bluetooth LE beacons for internal location setting; building and then deploying a custom application to the user’s cell phone. Though the benefits of this type of app compared to its expense and limited usage causes a problem for businesses due to the high physical infrastructure costs, it also has the ability to create great public relations buzz.

For the hospitality industry the use for this augmented reality technology can be limitless. Sachin Suri, managing partner at Prognosis Global Consulting, believes that it is the fear of the unknown that makes brands hesitant to adopt augmented reality into their marketing plans. Questions about whether augmented reality is only successful as a promotional tool to its effect on contributing to a positive customer-brand relationship remain unanswered as augmented reality is only beginning to become relevant in the marketplace.

Augmented reality apps can start as low as $3,000 and can reach up to $30,000 depending on the complexity and scope of the project. For example, Suri explains that transforming a static restaurant menu into an interactive tool which allows users to see videos of menu items, ingredients, how the food is made, reviews, and social media integration would cost approximately $5,000-$6,000. On the other hand, a more complex project that Prognosis offers is its “Virtual Concierge.” Though this program would cost approximately $20,000, it allows guests in a hotel room to scan a photo or object and then the entire hotel, including various food and beverage locations, menus, hotel amenities, availability and booking options becomes available right on their smartphone. 

Augmented reality technology takes digital marketing to the next level because it delivers the product or service while also creating an experience for customers. With instant access to adaptable information, customers are able to interact with this technology. These inserted virtual objects provide interested customers with specific product and price information, resulting in perceived experiential value. According to Marius Bulearca and Daniel Tamarjan’s article in "Global Business and Management Research: An International Journal," experiential marketing can lead to increased customer satisfaction in the short term due to the “shiny object” syndrome, but also in the long term, contributing to greater customer satisfaction. Augmented reality marketing can ultimately lead to an increase in customer loyalty and positive word of mouth.

Perhaps augmented reality is the marketing method that will position your brand and cut through the clutter. What’s your marketing reality?

1 Merel, Tim. "Augmented And Virtual Reality To Hit $150 Billion, Disrupting Mobile By 2020." TechCrunch. N.p., 6 Apr. 2015. Web. 10 June 2015.

2 Pine, J. and Gilmore, J. The Experience Economy, Harvard Business School Press, Boston, MA, (1999).