From cars to commerce: The disruptive power of AI, XR, and VR in enhancing customer experience

By: Prashant Sinha, Founder & CEO, BiUp.ai

Advanced AI-driven technologies and analytics are transforming the world at a swift pace to enhance customer experience. These have the power not only to cater to present but future needs. Increasingly, several industries are embracing Artificial Intelligence (AI), Extended Reality (XR), and Virtual Reality (VR) to enhance customer & product experiemce, reduce onboarding time, streamline operations, lower incident costs, and boost profits.

As per 2023 report titled, ‘The next frontier of customer engagement: AI-enabled customer service’ published by McKinsey and Company, AI-driven customer service is now the quickest and most effective route for institutions to deliver personalised, proactive experiences that drive customer engagement. While companies are looking at AI with high hopes, in global banking alone, another research from McKinsey conducted in 2020 estimated that AI technologies could potentially deliver up to $1 trillion of additional value each year, of which revamped customer service accounts for a significant portion.

Truly, the disruptive nature of such technologies is worth noting. Let us understand more. AI can simply advance and analyse customer-centric data to recognise their needs and preferences. Moreover, it can personalise interactions, handle queries and automate redundant tasks. For instance, Amazon has mastered its AI game with Alexa, the popular digital voice assistant. What more? It relies on AI to ship products. By collecting data on consumers’ buying habits, it even recommends and predicts purchases. At present, Amazon Go is grabbing eyeballs as the AI-powered convenience store tracks what items one picks up and then charges the consumer for those on the Amazon Go app.

Likewise, XR is a blessing for businesses. According to the report published by Zion Market Research, the global XR market size was valued at USD 41.01 billion in 2022 and is predicted to reach USD 142.04 billion by the end of 2030. In the future, it is expected to grow with a CAGR of 16.52% during the forecast period.

XR aids in constructing virtual environments that allow consumers to interact with products directly. Offering convenience to retailers, it can further optimise store layouts and give out data on consumer behaviour. Those hoping to enhance their brand’s presence can leverage XR to connect with consumers, maintain a global audience, scale customer events, and personalise campaigns. With the supremacy of data, XR can showcase products that people try, how long they spend on each product, and which parts of an outfit they focus on. Such is instrumental in refining marketing strategy, product development, and other business operations.

Markedly, to offer a more immersive and interactive experience to consumers, VR gives an option to customers to virtually try on products. A paper published on ResearchGate titled, ‘The Impact of Virtual Reality on the Customer Experience in the Luxury Industry’, stated that luxury companies have adopted VR as an innovative channel for marketing communications. Its impact was improved communication with consumers, an immersive experience, and enhanced customer loyalty.

Besides, customers have a chance to explore and interact with products in a 3D space with VR. The automotive and real-estate industries can greatly benefit from this. Since VR provides a great chance for consumer creativity through immersion, interactivity, and imagination, it is best utilised to seek real-time guidance from experts.

However, with great opportunities come larger challenges. Fully uncovering the potential of AI, XR, and VR and adapting them to industries requires investment in terms of cost and labour. Hence, companies need to chart out a budget to meet such demands. In addition to this, the technologies need a talented and skilled workforce. To further this, companies should train and up-skill their staff consistently. Specialised hardware and software must be put in place for the successful integration of AI, XR, and VR. This means that businesses must keep a tab on the relevant trends and developments in these fields and strategise accordingly.

Despite it all, the anticipated wins of AI, XR, and VR are abundant. Organisations across sectors look forward to enhancing their success graph by adapting and redefining them. Ultimately, thorough evaluation and preparation will position companies to uncover its true potential.