At a recent industry event, attendees got a brief augmented reality introduction, learning what augmented reality is and how it may eventually affect the communication dynamic between brand and customer. Enterprise level organizations, such as IKEA, Jose Cuervo and Heineken, have already embraced this new technology in successful campaigns. It’s just a matter of time before augmented reality moves downstream to SMBs. Office equipment dealers have a great opportunity to familiarize themselves with this new technology in its early stages (i.e., today) and play an integral part in SMB adoption.
What is Augmented Reality?
Augmented reality (AR) is technology that superimposes a computer-generated image on a user’s view of the real world. So, what does that mean? Basically, augmented reality layers digital interaction with the real world of the consumer. The theory is relatively simple. There are three “layers.” First is the content, or the superimposed digital image. Second is the medium by which the content is delivered (e.g., smartphone via an AR browser and/or a custom app, large digital display, etc.). The final layer consists of the “real world,” surrounding the user and enhancing the AR experience.
How It’s Used
Imagine this: You’re furniture shopping, testing your relationship, desperately trying to avoid what the Wall Street Journal calls “the IKEA meltdown.” While at the Swedish furniture giant, you stumble across the IKEA catalog, which encourages you to download the accompanying free IKEA catalog app on your smartphone. You’re now able to virtually “try out” products in your own home without making a purchase and laboriously building that wonderful couch only to learn it’s too large to fit in your living room. That’s the power of augmented reality and a textbook example of how brands should embrace this technology to increase both sales and customer satisfaction.
Augmented Reality in Packaging
In 2014, for its 219th birthday, Jose Cuervo released its “History in a Bottle” campaign, which captured five significant events in Mexico’s history via the Jose Cuervo bottle. The experience was activated when a user used the Cuervo AR app to align a virtual Cuervo bottle with the label of an actual Cuervo bottle in close proximity. The app would then play content on the the screen. (Check out https://vimeo.com/97475759 to see how it worked). According to Cuervo, sales rose about 25 percent immediately after launch. Not only was Cuervo able to increase sales, but they were also able to educate their customers about Mexican history and build brand loyalty.
Augmented Reality Labels
Heineken has also embraced augmented reality in its labeling processes. In 2015, the company used AR to spread its corporate sustainability message to consumers. The campaign, titled “The Legendary 7,” told stories of seven legendary farmers and their sustainability commitment, and, ultimately linked to Heineken’s corporate sustainability report.
In addition, Heineken-owned subsidiaries have utilized augmented reality in their labeling processes. In May 2017, Desperados, a Heineken-owned beer flavored with tequila, introduced an augmented reality edition exclusively in France. By scanning the label, users were able to view artwork from a famous artist and sculptor. The campaign was designed to target millennials with “something different.”
OK, Great. Why Should I Care?
We’re office equipment dealers, not high-powered advertising agencies with clients whose advertising budget is worth more than many dealerships, but, like anything else, this technology will eventually become more affordable and move downstream, making it accessible to our SMB customers. Office equipment dealers can compete in these types of industrial label and package printing opportunities. These industries are new and exciting. Best of all, there’s money to be made. Label and packaging analysts agree on one clear trend: end users, or brand owners, are moving toward in-house label and packaging production to save money, retain creative control and eliminate inventory concerns.
Office equipment dealers should embrace augmented reality because it allows their customers to better interact with their target audiences, ultimately leading to increased sales and brand loyalty in their respective marketplaces. As one example of how augmented reality isn’t just for the enterprise-level corporations anymore but is being implemented by SMBs, look at Vital Farms, an Austin-based pasture raised egg producer that just introduced augmented reality in its packaging to educate customers about its product. You shouldn’t plan to stumble upon the next Vital Farms every day, but they are out there, and dealers should start by targeting their current customer base.
It’s estimated the average office equipment dealer has about as many potential label and packaging customers as traditional production print customers — anywhere from 15 to 30 percent. One universal theme has proven true in every market in which we’ve worked — customers aren’t coming to dealers, dealers have to find customers. The fact of the matter is brand owners, or end users, don’t know this technology exists. It’s up to the dealership to invest in its future, educate its reps, then go out and prospect. It’s not a “chicken or the egg” scenario.
How to Target
Once a dealer penetrates its existing account base, finding manufacturers who might be interested in learning how to implement augmented reality into their labels and/or packaging isn’t as hard as you’d think. The North American Industry Classification System, or NAICS, classifies businesses based on the industry in which they operate. Each industry is assigned a specific number. For example, office equipment dealers are classified using NAICS code 532420: Office machinery and equipment rental and leasing. Sales reps can find local manufacturers by cross-referencing appropriate NAICS codes using ReferenceUSA, a business database platform available free with many public library memberships. Once they’ve located and identified a solid prospect list, they can work to find the appropriate individuals with whom it makes sense to have an augmented reality discussion.
Questions to Ask
Selling label and packaging production equipment is very different from selling a printer or MFP. The individuals with whom you’ll speak are different. The whole sales strategy is different. When you enter into a label or packaging print discussion, you’re effectively moving from the front office (printers and MFPs) to the back office (production environments). You’re no longer selling machines that cost the customer money; you’re now selling machines that make the customer money. A penny saved is a penny earned, right? These conversations are very different.
An easy initial question could be something like, “Mr. (or Mrs.) Customer, do you print labels and/or packaging in-house or do you outsource?” Based on his or her answer, you’ll have a foundation on which to continue the conversation. Learning the customer’s current production procedures is paramount. Dealers need to figure out how they can adapt to the customer’s current processes, not the other way around. Augmented reality should be viewed as a way to build credibility and get a foot in the door. It won’t play a significant role in every conversation. Some organizations might write AR off as too expensive or unproven technology. If that’s the case, try to transition the discussion to traditional label and/or package printing and see if there’s a need. Eventually, the customer may warm up to more progressive ideas as the technology becomes more broadly adopted.
Augmented reality is still in its early development stages. We should expect to see billions of dollars invested hoping to uncover the most effective ways to utilize this technology. Take Apple, one of the world’s largest companies and a technology powerhouse. They are betting big on this technology, with CEO Tim Cook recently saying augmented reality will be “as big as the iPhone.” Considering how in just 10 years the iPhone has changed the world and revolutionized the way mankind interacts with one another, I’d say that’s a bold statement. Office equipment dealers have the ability to play an integral role in moving this technology downstream to SMB customers — their bread and butter. Personally, I wouldn’t bet against Silicon Valley. Like it or not, it looks like it’s just a matter of time before augmented reality becomes part of our daily lives.
This article originally appeared in the July 2017 issue of The Imaging Channel
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