Insights into Extended Reality (XR)

Moody Mattan • February 14, 2025

Extended Reality (XR) is rapidly reshaping the digital landscape, blending the physical and virtual worlds to offer immersive experiences like never before. As a term that encapsulates augmented reality (AR), virtual reality (VR), and mixed reality (MR), XR is revolutionizing industries—from retail and entertainment to urban development and enterprise solutions. This article dives deep into XR's evolution, current trends, and future predictions while highlighting key insights from industry experts and thought leaders.


What Is Extended Reality (XR)?


Extended Reality (XR) is an umbrella term that encompasses the technologies that merge the physical and digital realms. Using head-mounted displays, spatial computing, and sensor-driven interactions, XR creates immersive experiences that engage users in ways traditional media cannot. Whether through AR overlays on your smartphone, VR headsets that transport you to fantastical worlds, or MR systems that seamlessly integrate digital objects into your physical space, XR is redefining how we interact with technology.


At its core, XR is about expanding our perception and breaking down barriers between the real and virtual. This digital convergence transforms entertainment and gaming and has far-reaching implications in education, healthcare, retail, and industrial applications.


The Evolution of XR Technologies


XR's journey can be traced back several decades. It evolved from rudimentary VR headsets and basic AR overlays to today’s sophisticated spatial computing systems. Early attempts in the 1990s paved the way for experimentation, but it wasn’t until recent advancements in hardware, software, and network infrastructure that XR truly began to take off.


A Brief History



  • Early VR and AR Pioneers: In the 1990s, VR headsets and primitive AR systems were primarily used in niche research and military applications. The limitations of the era’s technology meant that these early systems offered only a glimpse into the potential of immersive technology.
  • The Rise of Mobile and Wearable Tech: With the advent of smartphones and wearable devices, AR became accessible to the mass market. Games like Pokémon Go demonstrated how digital elements overlaid on the physical world could captivate a global audience.
  • Modern XR and Spatial Computing: Today, XR is no longer a futuristic concept. Innovations like Apple Vision Pro, Google’s AR landmarks, and a myriad of enterprise applications have propelled XR into mainstream technology. THE evolution of XR has been accelerated by the convergence of advanced computing power, high-resolution displays, and more efficient sensors that create smoother, more realistic experiences.



Key Milestones


  • VR Hardware Innovations: Recent surveys on VR headset usage reveal that hardware continues to evolve rapidly, with companies striving to improve resolution, comfort, and overall user experience.
  • AR in Daily Life: AR has become a staple in everyday life, especially with smartphone integrations that allow consumers to visualize products in their home environment or access interactive maps and guides.
  • The Emergence of Mixed Reality: By blending elements of AR and VR, mixed reality solutions are becoming powerful tools in sectors like healthcare, engineering, and design, where precision and interactivity are paramount.


XR Applications Across Industries


XR’s versatility is evident in its broad range of applications. From enhancing customer experiences in retail to creating immersive environments for enterprise training, XR is driving transformation across multiple sectors.


Retail and Virtual Showrooms


In retail, XR is changing the way customers interact with brands. Virtual showrooms allow consumers to explore products digitally before making a purchase decision. This technology improves customer engagement and helps brands reduce the overhead costs associated with physical retail spaces.


For instance, AR Insider recently featured an article on how companies leverage XR to create virtual showrooms. These showrooms allow brands to offer interactive, 360-degree views of their products. This innovation is especially critical in automotive and furniture retail industries, where spatial visualization plays a key role in the buying process.


Immersive Entertainment and the Future of Gaming


Entertainment is one of the most exciting frontiers for XR. The gaming industry, in particular, has embraced VR to offer players fully immersive experiences that go beyond traditional screen-based gaming. With devices like Apple Vision Pro leading the charge, immersive entertainment is set to redefine how audiences experience digital narratives.


The impact of the Apple Vision Pro on immersive entertainment, suggests that XR is poised to become the “tip of the spear” for next-generation gaming and interactive storytelling. By merging high-fidelity visuals with advanced audio and haptic feedback, XR creates a holistic experience that captivates users and sets new benchmarks for digital entertainment.


Urban Development and Cognitive Cities


XR is also making inroads in urban planning and development. The concept of cognitive cities—urban environments integrating AI, AR, and IoT to optimize living conditions—is gaining traction globally. These smart cities leverage XR to improve public services, enhance safety, and streamline infrastructure management.


AR Insider’s feature on “Cognitive Cities: Blending AI, AR & the Built Environment” highlights how XR is transforming urban landscapes. By providing real-time data overlays and interactive simulations, XR helps city planners visualize urban challenges and implement data-driven solutions, making cities more sustainable and efficient.


Fashion, Design, and the 3D Dilemma


The fashion industry is another arena where XR is leaving its mark. Designers are increasingly using XR to create virtual prototypes, conduct digital runway shows, and offer immersive shopping experiences. However, hesitation in the industry remains a significant barrier to leadership.


In the insightful article “The 3D Dilemma: Understanding Leadership Hesitation in Fashion,” AR Insider delves into the challenges that fashion brands face when integrating 3D and XR technologies. While the potential for increased customer engagement and innovation is enormous, many industry leaders remain cautious about the upfront investments and the rapid pace of technological change.


Enterprise Applications and Barriers to Adoption


XR offers powerful training, simulation, and remote collaboration tools for enterprises. However, adoption is not without challenges. High costs, technical complexity, and a shortage of skilled developers are often cited as significant hurdles.


AR Insider’s “What are Enterprise XR’s Biggest Barriers? Part 2” provides a detailed exploration of the obstacles that organizations must overcome to harness the full potential of XR. Despite these challenges, many enterprises are already reaping the benefits of immersive training programs and enhanced collaboration tools that XR technologies offer.


Big Tech and the XR Ecosystem


Major technology companies like Google, TikTok, and Amazon are actively investing in XR to grow their digital ecosystems. For instance, Google’s latest AR landmarks are pushing the limits of how digital information integrates into physical spaces, creating opportunities for location-based experiences and enhanced consumer engagement interactions.


The article “What’s Behind Google’s Latest AR Landmarks?” on AR Insider provides an in-depth look at how tech giants leverage XR to develop innovative solutions that bridge the gap between digital content and the real world. These initiatives are laying the groundwork for a more connected and immersive digital future.


Current Trends and Innovations in XR


The XR landscape is continuously evolving, driven by rapid advancements in both hardware and software. Several key trends are shaping the future of XR:


Diverging AR Form Factors


One of the most talked-about trends in the XR space is the diversification of AR form factors. With predictions indicating that AR devices will continue to evolve, the industry is witnessing a shift from bulky headsets to sleek, wearable designs prioritizing comfort and usability.


In the coming years, we will see a broader range of AR devices designed for specific applications, from enterprise solutions to consumer-oriented gadgets. This trend concerns aesthetics and enhancing performance and usability in various contexts.


Advancements in Spatial Computing


Spatial computing, where devices understand and interpret the physical world, has become a cornerstone of modern XR. By integrating sophisticated sensors, machine learning, and real-time data processing, spatial computing enables XR systems to deliver highly interactive and contextually aware experiences.


Innovations in spatial computing are paving the way for applications once considered science fiction. From interactive urban mapping to personalized virtual training modules, spatial computing enhances the depth and realism of XR experiences. Industry experts emphasize that as spatial computing matures, it will unlock even greater potential for immersive technology across all sectors.


Enhanced Content Creation Tools


Another significant trend is the evolution of content creation tools for XR. Traditionally, developing XR content required specialized knowledge and expensive software. However, recent advancements have democratized the process, enabling a broader range of creators to develop immersive experiences.


User-friendly XR development platforms, like the BrandXR Studio, and improved 3D modeling software have lowered the barrier to entry, allowing brands, educators, and independent developers to craft unique digital experiences. This trend is significant for industries like retail and entertainment, where compelling content is critical to engaging audiences and driving adoption.


Integration with AI and Machine Learning


Artificial intelligence (AI) and machine learning are becoming integral to XR. These technologies enable systems to learn from user interactions, predict behavior, and create adaptive experiences that respond in real time. AI-powered XR platforms are more efficient and more capable of delivering personalized content.


For instance, cognitive cities rely heavily on AI to process vast amounts of data and provide actionable insights for urban planners. This synergy between AI and XR is paving the way for smarter, more interactive environments that benefit both businesses and consumers.


Overcoming Technical Barriers


Despite rapid advancements, XR still faces technical challenges. Issues such as latency, limited battery life, and high production costs continue to hamper widespread adoption. Analysis of enterprise XR highlights that while the technology is promising, overcoming these technical hurdles is critical for the next growth phase.


However, as research and development in XR intensify, innovations in processing power, energy efficiency, and wireless connectivity are expected to mitigate these challenges, paving the way for smoother, more reliable XR experiences.


Opportunities and Challenges in XR Adoption


While XR promises many opportunities, its adoption is not without significant challenges. Addressing these challenges head-on is key to realizing the full potential of XR technology.


Opportunities


  • Enhanced User Engagement: XR offers unparalleled engagement, whether through immersive storytelling in entertainment or interactive product demos in retail.
  • Cost-Effective Training: Enterprises are increasingly adopting XR for training simulations, reducing costs associated with traditional training methods while improving safety and efficiency.
  • Innovation in Design and Prototyping: Industries like fashion and architecture leverage XR to visualize concepts in three dimensions, accelerating the design process and reducing the need for physical prototypes.
  • Data-Driven Urban Planning: In urban development, XR facilitates real-time data visualization, empowering city planners to design smarter, more sustainable cities.


Challenges


  • High Initial Costs: XR's hardware and software cost remains a significant barrier, particularly for small and medium-sized enterprises.
  • Technical Limitations: System latency, resolution constraints, and limited battery life can hinder the user experience.
  • Content Creation Complexity: Despite improvements, developing high-quality XR content requires expertise and resources, which can limit widespread adoption.
  • Security and Privacy Concerns: As XR devices collect vast amounts of data about users’ environments and behaviors, ensuring data security and user privacy is paramount.
  • Market Fragmentation: With many devices and platforms, achieving a seamless and standardized XR experience across different systems remains a complex challenge.


Addressing these challenges involves continuous research and development investment, collaboration between technology providers, and regulatory frameworks that ensure user safety and privacy.


The Future of XR: Predictions and Emerging Trends


Looking forward, the future of XR is teeming with potential. Here are some of the key predictions and emerging trends that are expected to shape the XR landscape over the next decade:


A More Connected and Immersive Ecosystem


The convergence of XR with other emerging technologies—such as AI, 5G connectivity, and IoT—will create an ecosystem where digital and physical realities are seamlessly intertwined. This integrated approach will allow for more responsive, context-aware experiences that adapt in real time to user needs.


Evolution of Device Form Factors


The next generation of AR and VR devices will be more ergonomic, aesthetically pleasing, and purpose-built. The emphasis will be on creating devices that perform exceptionally and integrate naturally into everyday life, whether for work, entertainment, or social interactions.


Expansion in Enterprise Adoption


Enterprises are expected to integrate XR further into their operations, leveraging immersive technology for remote collaboration, training simulations, and enhanced customer service. As companies overcome the initial technical and cost-related barriers, XR is poised to become a staple tool in industries ranging from manufacturing and healthcare to education and logistics.


Advancements in Content and Interactivity


With the democratization of content creation tools and the integration of AI, we will likely see an explosion of high-quality, interactive XR content. This will empower brands and creators to develop personalized experiences that engage users on a deeper level and drive consumer loyalty.


Regulatory and Ethical Considerations


As XR becomes more pervasive, data security, privacy, and ethical use issues will become central. Regulatory bodies worldwide must establish standards and guidelines ensuring XR technologies are used responsibly and transparently, protecting users and developers.


The Role of Big Tech in Shaping XR


Major players like Google, Apple, and Amazon are investing heavily in XR as standalone products and integral components of their broader digital ecosystems. Initiatives such as Google’s AR landmarks and immersive content platforms are setting the stage for a future where XR is a key medium for communication, entertainment, and commerce. 


Real-World Examples and Case Studies


Cognitive Cities and Urban Innovation


XR is transforming urban planning, and City officials are now using XR to overlay real-time data onto physical cityscapes, enabling more informed infrastructure and public safety decisions. This integration streamlines planning processes and fosters a more sustainable, efficient urban environment.


Virtual Showrooms Revolutionizing Retail


Retailers are increasingly turning to XR to create virtual showrooms that allow customers to interact with products in a simulated environment. This enhances the shopping experience and reduces overhead costs associated with maintaining physical spaces. The insights from “Omnia Paves the Way for Virtual Showrooms” demonstrate that this trend is set to continue as consumer expectations evolve in a digital-first world.


Enterprise Training and Remote Collaboration


The enterprise sector is leveraging XR for immersive training programs that simulate real-world scenarios without the associated risks or costs. Detailed in “What are Enterprise XR’s Biggest Barriers? Part 2,” these applications help businesses train employees more effectively, promote safer work practices, and improve overall operational efficiency.


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Conclusion


Extended Reality (XR) is not just a buzzword—it is a transformative technology that is reshaping how we interact with the world around us. From the early days of VR experimentation to today’s sophisticated implementations in urban planning, retail, and enterprise solutions, XR continues to push the boundaries of what is possible.


The insights provided offer a valuable window into the evolving XR landscape. Whether it’s the immersive potential of entertainment driven by devices like the Apple Vision Pro, the innovative use of XR in cognitive cities, or the challenges faced by industries such as fashion and enterprise, each piece of analysis underscores the immense potential and hurdles ahead.


As we look toward the future, the convergence of XR with AI, 5G, and IoT promises to usher in a new era of connectivity and digital transformation. The XR ecosystem is poised to become even more integrated into our daily lives, with predictions indicating even more diversified AR form factors and enhanced spatial computing capabilities.


Staying informed about these trends is crucial for businesses, creators, and tech enthusiasts alike. By embracing XR technologies and preparing for the challenges ahead, organizations can leverage these insights to drive innovation, improve customer engagement, and secure a competitive edge in an increasingly digital world.



In summary, extended reality is more than a technological trend—it is a paradigm shift redefining experiences across every facet of our lives. By understanding its evolution, current applications, and future possibilities, stakeholders can harness the power of XR to create immersive, meaningful, and lasting impacts.


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AI-Driven Augmented and Virtual Reality Training and Simulations
By Moody Mattan April 12, 2025
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Integrating AR Billboards with Social Media Campaigns
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AR Mirrors for Trade Shows and Events: Metrics that Matter
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By Moody Mattan April 8, 2025
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Verizon Augmented Reality Mural
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In today's bustling retail scene, marketing executives are on the lookout for exciting and creative strategies to draw customers into their physical stores and turn casual browsing into delightful purchases. Augmented reality (AR) murals have become fantastic tools for brands eager to craft immersive and shareable experiences that not only increase foot traffic but also enhance in-store conversion rates. This innovative technology is transforming standard retail spaces into vibrant, interactive destinations that engage customers in meaningful ways, crafting unforgettable brand moments that lead to real results for the business results. The Evolution of Retail Experiences The retail industry has undergone a dramatic transformation in recent years. E-commerce growth has put unprecedented pressure on brick-and-mortar locations, compelling marketing leaders to reimagine the physical shopping experience. Today's consumers expect more than just product availability—they seek experiences that seamlessly blend digital innovation with tangible interactions. According to McKinsey research, experiential retail concepts generate 1.5 to 2.2 times more revenue per square foot than traditional retail models. This seismic shift has created an environment where AR murals and similar immersive technologies are no longer experimental—they are becoming essential components of forward-thinking retail strategy. What Are AR Murals? AR murals merge physical artwork with digital overlays that customers can access through their smartphones or tablets. Unlike traditional store displays, these installations create multi-layered experiences that unfold when viewed through an AR-enabled device. These murals typically consist of: A visually striking physical mural or wall installation that stands alone as compelling artwork Digital content that appears when customers scan the mural using a retailer's app or QR code Interactive elements that respond to customer engagement, often incorporating product information, games, social sharing capabilities, or exclusive offers The most effective AR murals serve dual purposes: they enhance the retail environment's aesthetic appeal while simultaneously functioning as powerful conversion tools. The Business Case for AR Murals in Retail For Fortune 1000 marketing executives weighing technology investments, AR murals present a compelling business case with measurable returns: Driving Foot Traffic AR murals create destination-worthy experiences that attract customers specifically seeking to engage with the installation: Social Media Amplification : AR experiences are highly shareable, generating organic social media content that extends reach beyond paid advertising efforts. Data from Snapchat shows AR experiences drive 94% higher conversion rates than standard ads. Press Coverage and Earned Media : Innovative AR installations often generate media coverage, offering valuable third-party endorsement and increasing market awareness—especially when launched with strategic timing or connected to cultural moments. Location-Based Promotion : AR murals can be promoted through geofenced advertising, drawing nearby mobile users into stores with the promise of a unique digital experience. Recent implementations by leading retailers illustrate the traffic-driving potential of these installations. When luxury retailer Burberry unveiled AR-enabled murals in key global locations, they reported a 40% increase in store visits from younger demographics—a notoriously challenging segment to attract to physical retail.  Increasing In-Store Conversions Beyond attracting customers, AR murals significantly impact conversion metrics: Extended Dwell Time : Customers engaging with AR installations spend an average of 7.5 minutes longer in-store than non-engaged visitors. This extended engagement window creates additional opportunities for product discovery and purchase consideration. Personalized Product Interactions : Advanced AR murals can recognize individual users and recommend products based on previous purchases or expressed preferences, creating highly personalized shopping journeys. Gamification of Shopping : AR murals frequently incorporate game elements that incentivize specific customer behaviors, from exploring different store sections to trying on products virtually. Seamless Path to Purchase : The most effective implementations create frictionless connections between AR engagement and purchase opportunities through integrated mobile checkout or guided pathways to relevant products. A 2023 study by Deloitte found that retailers implementing AR experiences saw an average 19% increase in conversion rates and a 27% increase in average transaction value compared to control stores without such technology.
By Moody Mattan April 4, 2025
Murals have become increasingly popular additions to both residential and commercial spaces. A well-executed mural can transform a bland wall into a captivating focal point, tell your brand's story, or simply bring joy to those who view it. However, finding and hiring the right mural artist for your specific project can be challenging. This comprehensive guide will walk you through hiring the best mural artist for your needs, ensuring your vision comes to life exactly as you imagined. Understanding the Value of Professional Mural Artists Before diving into the hiring process, it is essential to understand what distinguishes professional mural artists from amateur painters or general contractors. Professional mural artists possess specialized skills, experience, and a creative vision that can transform your project from ordinary to extraordinary. Technical Expertise Professional mural artists possess technical skills honed through years of practice and formal training. They understand color theory, composition, perspective, and scale—all essential elements in creating artwork on large surfaces. Their expertise ensures that your mural will appear proportionate and visually appealing, regardless of the viewing angle or distance. Durability and Longevity Experienced mural artists understand which materials and techniques will ensure that your mural endures over time. They choose suitable paints for both indoor and outdoor applications, thoroughly prepare surfaces, and apply protective coatings when needed. This expertise ensures that your investment remains vibrant and intact for years. Creative Problem-Solving Every wall presents unique challenges—unusual dimensions, architectural features, lighting conditions, or surface textures. Professional mural artists can adapt their designs to work with (rather than against) these elements, turning potential obstacles into creative opportunities. Defining Your Mural Project Goals Before you begin your search for the perfect mural artist, clearly define your goals for the project. Purpose of the Mural Consider the primary function of your mural: Is it meant to reinforce your brand identity? Will it serve as a landmark or wayfinding tool? Is it purely decorative or meant to evoke specific emotions? Does it need to communicate a particular message or story? Style Preferences Murals come in countless styles, ranging from photorealistic to abstract, illustrative to typographic. Explore various mural styles and pinpoint the ones that resonate with your vision. Having examples of styles you appreciate will help convey your expectations to potential collaborators artists. Budget Considerations Mural costs vary widely based on factors like size, complexity, location, and artist experience. Establishing a realistic budget range early in the process will help you find artists who can work within your financial parameters.  Timeline Requirements Quality murals take time to plan and execute. Consider your timing needs: Do you need the mural completed by a specific date (e.g., before a grand opening)? Are you flexible on timing to accommodate a sought-after artist's schedule? Will weather conditions affect your timeline for outdoor murals?
Top 10 Mural Trends Shaping Public Art in 2025
By Moody Mattan April 3, 2025
In the evolving landscape of urban aesthetics, public murals continue to shift from simple decorative elements into powerful vehicles for storytelling, community engagement, and brand messaging. As we progress through 2025, the convergence of technology, sustainability, and social consciousness is transforming how we conceptualize, create, and engage with public art. Whether you are a muralist, a public art commissioner, an OOH advertising executive, or a marketing leader seeking innovative brand expression, grasping the current trends can help you maximize the impact of your next mural project. 1. Interactive and Immersive Augmented Reality Murals Perhaps the most exciting development in the mural space is the mainstream adoption of augmented reality (AR) integration. Static walls are now portals to dynamic digital experiences, creating multilayered storytelling opportunities that engage viewers on both physical and virtual planes. Augmented Reality (AR) murals are revolutionizing public engagement by allowing viewers to point their smartphones at a mural and witness its transformation—characters move, narratives unfold, and additional content emerges. This technology has evolved significantly in recent months, with advancements in spatial anchoring that ensure AR elements stay perfectly aligned with the physical artwork, regardless of viewing angle or distance. For brands and marketers, AR murals provide unprecedented metrics and engagement data, offering insights into how audiences interact with the artwork. Companies such as PepsiCo and Nike have leveraged this technology to create memorable campaigns that enhance the impact of their OOH investments while collecting valuable consumer interaction data. Key developments in this space include: Persistent AR experiences that multiple users can access simultaneously Geofenced content that changes based on time of day or special events Interactive elements that respond to viewer gestures or social media actions Integration with social platforms allowing for instant content sharing Payments built directly into AR experiences to easily one-click buy Viewing AR Murals through new AR glasses from Meta and Snapchat 2. Projection Mapping and Dynamic Murals While traditional painted murals remain predominant, projection mapping technology has developed to enable dynamic, changing murals that transform throughout the day or in response to various inputs. These "living walls" preserve the scale and public nature of murals while introducing temporal dimensions that static paintings cannot achieve. Recent advances in projection technology have made these installations more energy-efficient and visible even in daylight conditions. Sony and Epson have developed specialized projectors specifically for public art applications, enabling longer-term installations without excessive power consumption.  Noteworthy applications include: Seasonal narrative shifts that evolve throughout the year Weather-responsive projections that change based on local conditions Traffic or noise-responsive installations that reflect urban rhythms Scheduled transformations that create appointment viewing experiences These dynamic murals are particularly effective for areas with high repeat traffic, as they provide new experiences for regular viewers.
Advances in OOH Advertising Technology: A Chronological Review
By Moody Mattan April 2, 2025
Introduction Out-of-Home (OOH) advertising – encompassing billboards, transit signs, and digital displays – has experienced a remarkable technological evolution since the internet's emergence in the early 1990s. As consumers became increasingly connected online, the traditionally static OOH medium began incorporating digital capabilities to maintain its relevance and effectiveness. This research report, directed at OOH advertising executives and Fortune 1000 marketing leaders, chronicles key advancements in OOH technology in the U.S. (with global comparisons) over the past few decades. It emphasizes high-level trends and widely adopted technologies, including digital billboards, programmatic digital OOH (DOOH) buying, geolocation and mobile integrations, data-driven targeting, augmented/virtual reality (AR/VR) enhancements, improved measurement and attribution, and the growing role of artificial intelligence (AI). The objective is to illustrate how OOH advertising has evolved from static posters into a dynamic, data-driven channel, while providing insight into the industry's future direction headed. 1990s: Laying the Groundwork in a Connected World In the 1990s, the rise of the Internet did not immediately change the predominantly analog nature of out-of-home (OOH) advertising, but it laid the groundwork for future innovation. During this era, OOH advertising in the U.S. was still dominated by static billboards, posters, and transit signage. The decade witnessed ongoing investment in traditional formats (such as vinyl billboards replacing paper for enhanced durability) and iconic illuminated signs (like the neon-lit billboards in Times Square). While OOH remained a physical medium , the emerging digital revolution suggested new possibilities. Initial digital signage experiments began to appear in high-traffic areas—for instance, electronic displays in locations like Times Square and Las Vegas—but these were custom installations rather than widespread advertising networks. The OOH industry acknowledged the Internet’s potential to facilitate remote content control and data sharing , even though the technology was not yet prepared for mainstream use. By the late 1990s, companies were investigating how new digital display technologies (like LED screens) and internet connectivity could eventually be applied to billboards. These early endeavors set the stage for the digital out-of-home revolution that would unfold 2000s. Early 2000s: The Advent of Digital Billboards The early 2000s marked a pivotal turning point as digital billboards made their entrance, fundamentally transforming out-of-home (OOH) advertising. Breakthroughs in LED display technology and reduced electronics costs reached a tipping point around 2000, suddenly making large-format digital screens economically viable for outdoor use. In 2001, Lamar Advertising installed the industry’s first large digital billboard, a low-resolution LED display in Baton Rouge, Louisiana; this groundbreaking pilot demonstrated the concept’s potential. Over the next few years (2001–2004), major OOH companies trialed digital displays in select markets, refining the technology and demonstrating a return on investment. By 2004–2005, costs had decreased and reliability improved to the point that digital billboards entered a phase of rapid growth , with manufacturers shipping dozens of units per week to meet demand demand. These LED billboards offer several advantages over traditional static signs. They are bright, eye-catching, and visible even in daylight, allowing multiple ads to rotate in the same location and multiplying revenue opportunities for operators. For advertisers, digital screens provide flexibility that was previously unheard of in traditional out-of-home (OOH) advertising—content can be updated remotely in real-time, eliminating the costs and delays associated with replacing printed vinyl. By the late 2000s, major U.S. cities and highways were dotted with digital billboards, enabling advertisers to experiment with creative digital content, such as animated visuals or countdown clocks, to better engage passersby. This trend was mirrored globally in other markets, from the bright digital facades of Tokyo and London to the digital screens in emerging markets, although the U.S. remained a leading adopter. Consequently, OOH ad spending began to shift toward digital formats. (As a reference point, global OOH advertising revenue was approximately $30 billion in 2017 and continued to grow, with over 25 million digital OOH units deployed worldwide by 2018.) Today, in the U.S., roughly one-third of all OOH ad spending is on digital formats, reflecting how quickly digital billboards have become a cornerstone of the industry. Late 2000s: Networking, Geolocation and Mobile Integration As digital screens proliferated in the late 2000s, the focus shifted to connecting OOH with the mobile revolution . The introduction of smartphones (after 2007) and widespread mobile internet access created new opportunities to link outdoor ads with consumers’ devices. OOH operators began equipping digital signage with network connections and software to enable more sophisticated content control, scheduling, and targeting. By leveraging live data feeds, billboards could start to display contextually relevant messaging – for example, showing weather-specific ads (such as a coffee ad on a cold morning) or real-time information like news and sports scores. This period also saw OOH campaigns encouraging viewers to engage via their phones. Simple integrations emerged: SMS short codes on billboards to request more information, or the appearance of QR codes and social media handles on OOH posters. Such tactics bridged physical ads with digital engagement, foreshadowing deeper mobile integration to come. A major development was the use of geolocation and geofencing to enhance the impact of out-of-home (OOH) advertising. By leveraging the GPS capabilities of smartphones and location data, advertisers discovered they could retarget individuals exposed to OOH ads with follow-up advertisements on their mobile devices. In practice, this involved setting up virtual perimeters—known as "geofences"—around OOH units: when a user’s phone entered that area, it could trigger a relevant mobile ad or later determine if that user visited a store. By the end of the decade, early adopters were combining OOH and mobile campaigns to increase engagement. For instance, an outdoor billboard could be synchronized with in-app ads, ensuring that audiences received a coordinated message on their phones after viewing the billboard. This convergence of OOH and mobile advertising significantly improved measurability and targeting in what was previously an untrackable medium. Industry research indicated that mobile click-through rates rose substantially (with some studies reporting increases of 15% or more) when supported by OOH ads, thanks to these retargeting methods. Location data from carriers, apps, and sensors became “the secret sauce,” providing insights into audience movement and enabling OOH to approach one-to-one marketing. By 2010, the OOH industry was actively welcoming mobile integration, paving the way for the data-driven era of the 2010s. 2010s: The Rise of Programmatic and Data-Driven DOOH The 2010s represented a transformative decade for OOH advertising, as digital technology, data, and automation converged to establish a genuinely smart medium. By the early 2010s, a substantial number of digital billboards and place-based digital screens (located in malls, transit hubs, airports, etc.) were operational. This laid the foundation for programmatic Digital Out-of-Home (pDOOH) – the implementation of automated, data-driven ad buying for OOH inventory – similar to the changes already seen in online advertising. Around 2012, the first programmatic OOH platforms and exchanges were launched, allowing advertisers to buy digital billboard space via demand-side platforms (DSPs) and real-time bidding algorithms. Companies like Broadsign (in Canada) and Vistar Media (in the U.S.) led the way in connecting digital signage networks to programmatic buying systems. This development enabled marketers to log into a platform, set targeting parameters (location, time, audience demographics, budget), and automatically have their ads displayed on digital billboards across various operators. By the mid-2010s, programmatic DOOH gained traction, with major OOH networks making their inventory available for real-time, impression-based advertising buying. Crucially, data became the lifeblood of OOH campaigns during the 2010s. Advertisers began utilizing a wealth of data sources to target OOH ads more precisely and contextually. Location data, aggregated from mobile devices, enabled brands to choose billboard locations based on the movements and demographics of the audience passing by. Advertisers could also schedule content according to factors like the time of day, the day of the week, or even weather and traffic conditions. For example, a fast-food chain could display coffee ads on digital screens during the morning rush and switch to dinner promotions by late afternoon, or a retailer could trigger ads for raincoats on a billboard when meteorological data indicates rain in that area. This data-driven flexibility introduced a level of targeting and timeliness to OOH that was previously unattainable. One industry report referred to this period as a “data-driven revolution,” highlighting that programmatic ad platforms enabled OOH campaigns to target audiences with precision based on location, time, and weather, just as easily as online ads Another significant advancement was in measurement and attribution . Historically, out-of-home (OOH) advertising was challenging to measure; advertisers relied on traffic counts or surveys to estimate impressions. During the 2010s, new tools emerged to quantify and link OOH audience exposure to outcomes. Mobile location data played a crucial role: if a user’s device was detected (anonymously) within view of a billboard and later appeared inside an advertiser’s store, that movement could be attributed to OOH influence. Specialized firms began offering OOH attribution services that tracked increases in store visitation or website visits among those exposed to an outdoor ad. Simultaneously, computer vision technologies made progress—some digital displays were equipped with sensors or cameras to count passersby or even estimate their demographics (gender, age range) by anonymously analyzing imagery. These camera-equipped “smart billboards” could then adjust content to suit the observed audience (e.g., displaying an eyewear ad if many viewers wore glasses) and provide detailed analytics on how many people looked at the screen. Thanks to these data and sensor innovations, by the end of the 2010s, OOH campaigns could deliver advertisers far more granular reports, including impressions, dwell time, and engagement metrics. As a result, OOH joined the omni-channel, ROI-driven digital ecosystem— a significant departure from the one-size-fits-all posters of the past. From a business perspective, these capabilities fueled considerable growth in the DOOH sector. Advertisers invested more budget into OOH, knowing they could target and measure it like their digital ads. Programmatic buying also reduced the barriers to entry, attracting a broader range of advertisers, including small brands, to purchase billboard space in flexible, short-term increments. By 2019, analysts projected programmatic OOH would evolve into a billion-dollar segment, and overall OOH spending was on a steady upswing. Notably, global data indicated that both traditional and digital OOH were expanding, but digital was growing at a faster pace; by the mid-2020s, DOOH accounted for roughly 40% of global OOH revenue. In the U.S., the digital OOH revenue share reached about 30% of total OOH spending by 2023 , recovering from a brief pandemic dip. The 2010s firmly established that the future of OOH would be digital, data-driven, and integrated with the same programmatic infrastructure as online advertising media.
By Moody Mattan April 1, 2025
Executive Summary Augmented Reality (AR) “smart mirrors” are emerging as transformative tools in beauty retail, allowing customers to virtually try on makeup in-store with lifelike realism. Leading beauty retailers and brands—including Sephora, L’Oréal, and Estée Lauder—have launched and expanded AR mirrors to enhance the in-store experience, resulting in significant increases in sales conversion, basket size, and customer engagement. In-store AR mirrors address key issues, such as hygiene concerns, limited trial time, and choice overload, by enabling touchless, rapid try-ons of multiple products. The results are notable: Sephora’s AR mirror trials led to an estimated 31% increase in sales , and AR try-on users demonstrate conversion rates up to 90% higher than those who do not engage. Estée Lauder reports that AR experiences yield 2.5 times higher conversion for lipstick purchases, and Clinique’s AI-driven AR mirror increased basket size by 30% while extending dwell time five-fold . Major U.S. beauty chains are adopting AR mirrors as a strategic tool to drive in-store sales and customer loyalty , with international retailers (e.g., Watsons in Asia) experiencing double-digit sales growth after implementing AR mirror experiences. This executive case study examines the business case for in-store AR mirrors, the technology and ecosystem (key providers and partners), and detailed case studies of Sephora, L’Oréal, and Estée Lauder implementations. It also presents key ROI metrics and practical considerations for retail leaders looking to adopt AR mirrors. The evidence indicates AR mirrors are evolving from novelty to an essential part of an omnichannel beauty strategy , merging the convenience of digital try-ons with the tangible services of physical retail to enhance both customer satisfaction and profitability. The Business Case for AR Mirrors For beauty retailers, the in-store AR mirror offers an innovative solution to a longstanding challenge: how to enable customers to confidently try and buy cosmetics with minimal friction. Traditional in-store sampling has limitations — applying and removing multiple products is time-consuming and raises hygiene concerns. AR mirrors address this issue by allowing shoppers to “try on” numerous shades virtually in seconds , without ever touching their face. This establishes a safe and sanitary try-on process , a priority heightened by the pandemic. When testers were removed from many stores in 2020, AR mirrors and virtual try-on tools became essential alternatives, significantly accelerating the adoption of the technology. From a business perspective, AR mirrors drive sales by enhancing customer confidence and encouraging exploration. By visibly “wearing” a new lip color or eyeshadow through AR, customers can discover products they might not have previously considered — effectively expanding their basket . Sephora found that AR experiences foster impulse purchases: its virtual mirror convinced shoppers to buy items they hadn’t initially planned on. The interactive and enjoyable nature of AR also keeps shoppers in the store longer, which generally correlates with higher spending. Industry reports indicate that immersive technology like AR can significantly increase dwell time in retail. In one instance, a beauty AR experience resulted in an average in-store dwell time of over 4 minutes , far exceeding typical engagements. Longer engagement provides more opportunities for associates to upsell and for customers to add items to their cart baskets. Critically, AR mirrors address the “try-before-you-buy” expectation of modern consumers. Over 50% of consumers desire augmented shopping experiences to assist in product selection. By meeting this demand, retailers boost sales in the short term and cultivate brand loyalty. Shoppers view the brand as innovative and customer-centric. The novelty factor of AR mirrors — essentially a magic mirror that instantly showcases new looks — also creates buzz and foot traffic. Executives observe that these tech-driven experiences result in memorable store visits that attract shoppers, despite the convenience of online options. From a financial ROI perspective, multiple data points highlight the business case. Shopify reported that products featuring AR content experienced a 94% higher conversion rate than those without. Perfect Corp (a leading AR provider) commissioned a study revealing that AR try-on use made shoppers 1.6× more likely to purchase and to spend 2.7× more on cosmetics . In other words, AR-driven trials lead to higher conversion rates and increased average order values. These gains can directly enhance same-store sales. Beauty giant L’Oréal estimates that augmented reality and AI initiatives contributed to its e-commerce and in-store sales growth (52% e-commerce growth in 2019) by facilitating more personalized, confident purchases at scale. In summary, AR mirrors align with core retail KPIs: increasing conversion, basket size, dwell time, and customer satisfaction, all of which ultimately drive revenue and profitability. Technology Overview AR mirrors combine augmented reality software, cameras, and display screens in a fixture resembling a vanity mirror or digital kiosk. At the core is real-time facial tracking and rendering technology: a camera captures the customer’s face, and AR software overlays ultra-realistic 3D images of makeup (lipstick, eyeshadow, foundation, etc.) onto the live video feed. Unlike simple 2D photo filters, advanced AR mirrors utilize 3D facial geometry and AI to simulate how products appear from different angles and under various lighting. For example, ModiFace, a pioneer in beauty AR, calibrates its rendering by analyzing how makeup looks on models of different skin tones and lighting conditions, yielding a highly lifelike result. The goal is a virtual application that is nearly indistinguishable from real makeup application. Early augmented reality (AR) mirrors were essentially large screens or tablets that ran AR try-on software. Sephora’s first installations between 2014 and 2016 featured 3D AR mirrors co-developed with ModiFace, which included a camera and screen housed in a vanity-like frame. Today’s implementations vary from full-length smart mirrors to iPad-based kiosks found at beauty counters. For example, the AR mirror launched by MAC Cosmetics in 2017 is a freestanding screen that maps the user’s face 30 times per second, realistically overlaying 30 different eye makeup looks. Other setups, such as Charlotte Tilbury’s “Magic Mirror,” utilize a mirror-shaped display with built-in lighting, evoking the ambiance of a glamorous vanity Crucially, the tech has evolved to require no learning curve from shoppers: no app download or menu navigation is needed . Users simply stand in front of the mirror and see themselves with virtual makeup; the interface often lets them change shades with a simple gesture or tap, or even automatically recommends a look. Keeping the experience seamless is key to encouraging engagement, as noted by AR developers who avoid complex UIs to make mirrors universally inviting . Behind the scenes, AR providers and tech partners create an ecosystem that enables these mirror experiences. In the beauty industry, several specialists stand out (see Table 1). ModiFace , acquired by L’Oréal in 2018, supplies AR and AI technology for makeup try-ons across many of L’Oréal’s 36 brands and has previously collaborated with Sephora and others. Perfect Corp. , the maker of the YouCam Makeup app, offers a turnkey AR mirror solution used by retailers such as Ulta and Watsons; it features patented AgileFace® tracking for high accuracy. Agencies like Holition develop custom AR mirror experiences for luxury brands (e.g., Charlotte Tilbury) with tailored hardware and content. Newer startups (e.g., BrandXR ) concentrate on pop-up AR installations for brands (as seen with Valentino Beauty and Makeup by Mario mirrors). These providers offer features ranging from virtual product try-ons to shade finders and integrated purchase functions (scanning a QR code from the mirror to add the product to the cart). Table 1 compares some leading AR mirror solutions and their notable brand deployments: Table 1. Leading In-Store AR Mirror Solution Providers and Deployments
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