By: Tanuja Dutta, Senior Specialist, GTO

How will extended reality transform CX?

Extended Reality (XR) is a term that brings together immersive technologies, including augmented reality (AR), virtual reality (VR), and mixed reality (MR). The global XR market is projected to surpass $100 billion by 2026, showcasing how rapidly this industry is expanding¹. As customer expectations for exceptional products and services continue to rise, brands are rethinking their customer experience (CX) strategies to keep up with the growing number of interactions. XR offers a unique opportunity to create personalized and engaging experiences that enhance customer satisfaction and foster loyalty. By allowing customers to interact with products in real-time, XR helps build trust and awareness, making the purchasing journey more intuitive and enjoyable.

Embracing XR-led solutions can empower companies to connect with customers more effectively, increase sales, improve onboarding experiences, encourage innovative teamwork, and enhance product development, thereby boosting the overall productivity. Additionally, the expansion of 5G and edge computing is set to integrate XR further into everyday business processes. According to recent reports, a staggering 90% of the organizations are now embracing XR technology. Studies indicate that 40% of consumers are willing to spend more on products that they can preview through XR, and 58% are more likely to purchase after experiencing XR.² As businesses look to the future, integrating XR into their strategies isn’t just a trend; it’s becoming essential for staying competitive and meeting the evolving needs of their customers.

The integration between AI and XR will revolutionize the industry landscape

The blend of AI and XR is a game changer when it comes to customer experience. This dynamic duo allows for richer digital interactions and more personalized connections, making each customer journey feel unique. The benefits of XR and Gen AI are manifold. As shown in the figure below, this powerful combination enhances everything from customized product recommendations to immersive content creation. By using synthetic data, businesses can fine-tune their offerings and speed up product development, ensuring that customers enjoy relevant and engaging experiences. Ultimately, this transformation not only increases satisfaction but also builds loyalty, leading us into a more innovative and connected future.

Fig 1: Impact of AI and XR on CX

Impact on digital interaction: The intersection of XR with LLM-powered multi-agent frameworks will unlock game-changing possibilities. LLMs assess customer interactions and preferences, offering valuable insights that can be incorporated into the XR platforms to customize experiences. The retail industry has started utilizing AR for virtual try-ons and LLM-powered chatbots for personalized shopping assistance. This integration is significantly boosting customer satisfaction and sales.

Personalization of products and services: AI and XR integration is revolutionizing product and service personalization across industries. In healthcare, XR provides immersive training and virtual consultations, while AI personalizes treatment plans by analyzing patient data. Combining XR with AI customizes rehabilitation exercises, improving recovery. In manufacturing, XR enables virtual prototyping and testing, while AI enhances designs using user feedback and data analysis.

Content creation and crafting immersive experiences: Generative AI models assist in creating XR content across various modalities, including text, images, audio, video, and 3D. They can produce realistic, high-quality, high-fidelity environments for XR applications, enabling dynamic and immersive experiences. Gen AI can also generate personalized avatars that resemble users, adapting to their facial features, expressions, and body movements, enhancing user identification and immersion in XR environments.

Transforming CX: AI algorithms identify patterns, predict behavior, and make real-time decisions, allowing businesses to engage customers in personalized, resonant ways. In the automotive sector, customers explore and customize vehicles in virtual showrooms, guided by AI assistants offering detailed recommendations. In education, AI and XR integration create personalized virtual classroom experiences, boosting student engagement. These combined benefits of XR and Gen AI can lead to heightened customer trust and business growth.

Boosting synthetic data generation: Gartner predicts that by the end of 2024, 60% of data for AI solutions and analytics will be synthetically generated³. XR and This data can train and test autonomous driving systems in varied scenarios, enhancing safety and performance. Generative AI also creates synthetic medical images and patient data for training diagnostic models, ensuring patient privacy.

Product development: Generative AI tools can be instrumental in helping companies explore new methods of creating extended reality headsets, from smart glasses to MR wearables. A leading nonprofit in medical care developed an AI chatbot that conducts dynamic interviews with patients, gathering symptom-related information as well as medical history and MR wearables for training and virtual consultations, streamlining intake, personalizing treatment plans, and reducing clinician burnout.

XR as a sandbox for AI: AI enriches the authenticity of XR experiences by enabling more natural language interactions, generating accurate 3D models, and creating dynamic, interactive environments. The University of Munich, explored the use of XR environments to advance AI development and testing, with a particular focus on foveated rendering and object tracking.⁴

Challenges with implementing an integrated (XR and AI) solutions

Merging AI with XR presents several challenges, such as:

• Integrating these technologies with existing customer service and IT systems can be complex and resource-intensive, potentially leading to compatibility issues that necessitate significant upgrades.
• XR environments necessitate the collection of extensive data, such as biometric information, location details, and user interactions. It is crucial to anonymize data collected in XR environments to ensure it cannot be traced back to individual users, thus maintaining privacy.
• Designing intuitive and user-friendly applications is already challenging, but it becomes even more complicated with emerging XR technologies. Poorly designed interfaces can deter users, undermining the potential benefits that customers seek.
• Varying regulations across different regions make global implementation challenging. The organizations must navigate these complex legal landscapes. Also, AI systems in XR must avoid biases and ensure fairness to prevent discrimination.

By tackling these challenges head-on, businesses can truly harness the power of AI and XR integration to enhance customer experiences effectively. But the question is how?

The way forward

To effectively address these challenges, a multi-faceted approach is essential:

Modular integration framework: Developing a modular integration framework can simplify the process of incorporating AI and XR technologies into existing systems. Coupled with this, investing in comprehensive training is crucial, and will ensure a seamless adoption for teams.

Robust data protection measures: Implementing strong encryption methods, conducting timely security audits, and ensuring compliance with data protection regulations will help safeguard sensitive information from cyber threats.

Ethical guidelines and transparency: Establishing clear ethical guidelines, performing regular bias assessments, and promoting transparency in AI algorithms are crucial for building trust and ensuring responsible development.

User-centric design: Prioritizing user experience through consistent testing, gathering feedback, and iterating designs will enhance usability and make applications more intuitive, maximizing their potential impact on customer satisfaction.

By taking these steps, businesses can navigate the complexities of integrating AI and XR while creating meaningful and secure experiences for their customers.

How will the future of CX evolve with AI’s coupling with XR?

In the future, CX will be transformed by AI technologies, including natural language processing, voice and facial recognition, and detailed inspection of images and videos. This will be particularly true when combined with XR. We anticipate that in the near future, there will be various benefits of XR and Gen AI on CX, with XR technology increasingly relying on Gen AI, and many new products and services will arise through the amalgamation of Generative AI with other technologies like machine learning. This integration will augment immersive experience, diminish project costs, efficiency. Furthermore, AI will empower creators to design everything from hyper-realistic environments and characters to unique user interfaces powered by the XR technology.

Citations:

1. Extended reality (XR) market size worldwide, Statista, Thomas Alsop, Statista, March 09, 2023: https://www.statista.com/statistics/591181/global-augmented-virtual-reality-market-size/#statisticContainer
2. XR statistics for 2024, Tajammul Pangarkar, market: https://scoop.market.us/extended-reality-statistics/
3. Top Trends shaping the future of Data Science and ML, Gartner, August 01, 2023: https://www.gartner.com/en/newsroom/press-releases/2023-08-01-gartner-identifies-top-trends-shaping-future-of-data-science-and-machine-learning
4. When XR and AI Meet,Teresa Heezle, Florina Muller, et al., ACM digital Library, April 2023: https://dl.acm.org/doi/fullHtml/10.1145/3544548.3581072
5. Extended Reality: 6 ways to improving CX and helping brand grow, Venkatesh Alagarsamy, Fingent: https://www.fingent.com/blog/extended-reality-6-ways-it-is-improving-customer-experience-and-helping-brands-grow/
6. Exploring the intersection of Generative AI and Extended Reality, Shilpa Ramteke, Persistent, August 02, 2023: https://www.persistent.com/blogs/a-new-frontier-exploring-the-intersection-of-generative-ai-and-extended-reality/
7. Reasons to invest in Gen AI in XR for 2024, Rebeka Carter, XR Today, July 19, 2024: https://www.xrtoday.com/mixed-reality/6-reasons-to-invest-in-generative-ai-in-xr-in-2024/
8. AI and AR: Blending Tech to push the boundaries of CX, Inspiro: https://inspiro.com/insights/blog/ai-and-augmented-reality-blending-tech-to-push-the-boundaries-of-cx/