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Like many analyst firms, market sizing is one of the ongoing practices of AR Insider’s research arm ARtillery Intelligence. A few times per year, it goes into isolation and buries itself deep in financial modeling. One such exercise zeroes in on mobile AR revenues.
This is one of the main subdivisions of spatial computing – others including headworn AR and VR. They’re all related and share technological underpinnings, but are driven by separate market forces such as their respective hardware bases (see methodology and inclusions).
So what did the mobile AR forecast uncover? At a high level, global mobile AR revenue is projected to grow from $10.5 billion in 2023 to $21.5 billion in 2028, a 15.4 percent CAGR. This sum consists of mobile AR consumer and enterprise spending and their revenue subsegments.
Drilling down, our latest Behind the Numbers installment looks at the forecast’s outlook for mobile AR marketing and commerce enablement. How much do brands spend on technologies to AR-enable their eCommerce shopping flows, including product try-ons and sponsored lenses?
Create, Optimize & Manage
Diving into the numbers, spending on mobile AR marketing & commerce is projected to grow from $4.7 billion in 2023 to $11.8 billion by 2028. This is one of the fastest-growing enterprise/brand spending areas tracked in this forecast, due to the traction seen in AR shopping.
In that light, these spending levels are related to an area we explored in a recent part of this series: consumer mobile AR shopping behavior. There, we looked at consumer spending on physical goods that are influenced by AR visualization, such as virtual product try-ons.
The AR commerce enablement we’re looking at today is what makes those immersive shopping experiences possible. It includes spending on software that helps brands create, optimize, and manage 3D models, as well as other pieces like eCommerce integrations.
Naming names, some of the tools in this emerging and opportune category include QReal (3D model creation), VNTANA (3D model optimization and management), and Dopple (eCommerce integrations). It also includes amplification of those AR experiences such as Snapchat lenses.
That last part represents a key component of the AR marketing mix, which is paid amplification such as sponsored lenses. This represents a leading subsegment of the above AR marketing & commerce spending figures, to the tune of $1.4 billion in 2023 to $4.09 billion by 2028.
Looking forward, visual search is another opportune AR shopping format. This utilizes the smartphone camera to identify items encountered in the real world, sometimes as an entry to a shopping flow (think fashion items). Google Lens already sees 10 billion searches per month.
The Carrot or the Stick
Stepping back, this is an opportune mobile AR subsector due to its growth potential. Consumer engagement with immersive shopping currently shows ample momentum, which will be further propelled as the camera-native Gen-Z continues to gain spending power.
As these factors advance, AR shopping will increasingly become table stakes for brands. Fortunately, the barriers are lowered by the likes of Apple’s Object Capture and Niantic’s Scaniverse – tools that enable 3D models using an iPhone (sans complex photogrammetry).
And there’s plenty of headroom: As we examined recently, AR-assisted shopping only takes place within about .3 percent (a third of one percent) of overall global consumer spending. This makes it opportune in that the market is far from saturated. We’re on the ground floor.
One way the adoption sequence could ratchet up is through consumer conditioning. First, early adopter brands start to whet consumers’ appetites for things like dimensional product try-ons in mobile AR. Gradually, that will condition user habits, which then evolve into expectations.
Those consumer expectations will then pressure brands that haven’t yet adopted AR marketing to finally come on board. They won’t have much choice because it will be table stakes at that point. Put another way, brands will adopt AR eventually, whether by the carrot or the stick.
To be fair, this sequence takes a while. Though AR offers tangible utility, it’s hard to change habits en masse. That’s what we’re currently seeing in the slow adoption cycle for AR shopping. Innovators with the patience to stick with it could be rewarded with an early-mover advantage.
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