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3/6/2018

Virtual Reality Gets Real: In the Know from CIT

Insights

Virtual reality, and its close cousin, augmented reality, has come a long way since Oculus’s 2012 Kickstarter campaign (the company is now owned by Facebook), when it introduced headsets for gamers. But even before these advances, airlines were already using flight simulators to train pilots for handling large aircraft. You could almost say aviation was the birthplace of virtual reality for training purposes. Now, many other industries, including defense and healthcare, are benefiting from the technology.

Today, VR technology is finding new applications thanks to innovations that have made headsets cheaper and easier to access. Worldwide revenues for the virtual/augmented reality market reached $5.2 billion in 2016, but they are expected to grow to $162 billion by 2020. Investors are excited about virtual reality. Startups in the industry raised $658 million in 2015.

How can enterprises in healthcare, retail, and defense win a portion of the anticipated VR/AR-based revenue?

Virtual Reality Gets Real $162 billion

Virtual Retail

VR and AR investment in retail is expected to reach $30 billion by 2020.  Brands are excited about how virtual reality can bring their products and services to life in a way that traditional e-commerce 2-D displays can’t. Retailers can deliver a differentiated, personalized experience that lets customers try on clothing, pick out furniture, and get a 360-degree view of potential homes they’re considering buying.

For example, outdoor apparel company Merrell took more than 750 guests of the Sundance Film Festival on an immersive, hair-raising trek through Italy’s Dolomite Mountains using the Oculus Rift 4-D. The tour included crossing a rickety wooden bridge high in the mountains and walking along a crumbling ledge. The campaign was timed to coincide with Merrell’s introduction of its technical hiking shoe, the Capra.

The firm’s social engagement spiked 859% after the campaign and the company sold 4,000 shoes in the days following. 

Meanwhile, furniture retailer IKEA is using augmented reality to help consumers furnish their houses. Its catalogue allows shoppers to “place” furniture pieces inside their own homes, while the app measures the pieces against the dimensions of the room to create a realistic view of how the products fit.

Virtual Reality Gets Real 859%

Defense Goes Digital

The U.S. military relies on VR simulations to train servicemen and women while mitigating risk.

VR is routinely used to help personnel learn how to use equipment on ships, submarines, and planes, not to mention combat. New generation Air Force jets, for example, are so complex that some military leaders believe pilots can only be trained on them virtually.

There’s good reason for the military to put its faith in VR. Virtual training is believed to have saved the Air Force $1.7 billion between FY2012 and FY2016, while the Navy anticipates that it can shave $119 million a year from its budget starting in 2020 as a result of increased virtual training for the MH-60 and F/A-18 airplanes.

VR/AR is still in its infancy, but the technology is already showing promise in a number of industries. Through economies of scale and continuing technology improvements, it can have major implications for work productivity, branding, and even goods production.

Virtual Reality Gets Real $1.7 billion

Simulated Healthcare, Real Results

Virtual reality is playing a bigger role in the way that hospitals and medical centers are training doctors, nurses, and technicians. Much like flight simulations for pilots, VR and AR help medical professionals learn how to perform procedures before using them on patients. And they do it under simulated operating room conditions, complete with the sights, sounds, and lighting they might normally encounter. 

Next Galaxy, a VR company that partnered with Nicklaus Children’s Hospital in Miami, developed virtual reality medical instructional software for a range of procedures, such as nasal gastric tube insertion, intubation, and starting IV lines. 

According to reports from hospitals using the technology, the retention rate in remembering how to perform the procedure one year after VR training is about 80%, compared to a 20% retention rate only a week after traditional training. 

Virtual reality can also be applied to treat mental health conditions, from anxiety to post-traumatic stress disorder. These conditions cost approximately $467 billion each year in lost productivity in the U.S. Therapists have been using virtual reality exposure therapy (VRET) to help alleviate these disorders by exposing patients to related stimuli in safe, controllable virtual environments. 

Medical training and mental health aren’t the only areas where this technology is making an impact. Augmented reality has also been shown to be effective in delivering telemedicine, with untrained users able to accurately use an ECG device in combination with a tablet or smartphone. 

Outcomes have so far been promising. Patients were found to be 4.9 times likelier to improve motor function through VR-based physical therapy, and VR simulations were found to improve surgical accuracy in procedures by 10%, while reducing surgical planning time by 40%

The VR/AR market in healthcare could reach $3.8 billion by 2020, driven in large measure by simulation-based medical training and applications in dentistry.  

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