Flevy Management Insights Q&A
What role will augmented reality (AR) play in the future of mobile app engagement and customer experience?


This article provides a detailed response to: What role will augmented reality (AR) play in the future of mobile app engagement and customer experience? For a comprehensive understanding of Mobile App, we also include relevant case studies for further reading and links to Mobile App best practice resources.

TLDR Augmented Reality (AR) will revolutionize mobile app engagement and customer experience by offering immersive, personalized experiences and innovative features that drive user engagement and brand loyalty.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they related to this question.

What does Immersive Experiences mean?
What does Personalization Strategies mean?
What does Brand Loyalty Development mean?


Augmented Reality (AR) is rapidly transforming the landscape of mobile app engagement and customer experience, offering immersive experiences that blend the digital and physical worlds. As organizations strive to differentiate themselves in a competitive market, AR provides a powerful tool to enhance user engagement, personalize customer experiences, and drive brand loyalty. The integration of AR into mobile apps not only captivates users but also offers practical, value-added services that can significantly impact an organization's bottom line.

Enhancing User Engagement through Immersive Experiences

One of the primary roles AR plays in the future of mobile app engagement is the creation of immersive experiences that captivate users. By overlaying digital information onto the physical world, AR transforms the way users interact with mobile apps. This not only increases the time spent within the app but also enhances user satisfaction and loyalty. For instance, gaming apps like Pokémon GO have demonstrated the potential of AR to create engaging and interactive experiences that drive unprecedented user engagement. Beyond gaming, retail apps are leveraging AR to allow customers to visualize products in their own space before making a purchase decision, thereby reducing the uncertainty associated with online shopping and enhancing the overall customer experience.

According to a report by Deloitte, organizations that incorporate AR into their customer engagement strategies see an increase in user interaction rates and a significant boost in customer satisfaction scores. This is because AR provides a unique and personalized experience that resonates with users on a deeper level, encouraging continued engagement with the app. Furthermore, AR can be used to gamify experiences, offering rewards and incentives that further drive engagement and loyalty.

Real-world examples of AR's impact on user engagement can be seen in the retail and education sectors. IKEA's AR app, IKEA Place, allows users to visualize furniture in their homes, leading to increased user confidence in purchase decisions and higher conversion rates. Similarly, educational apps that utilize AR to provide interactive learning experiences have reported higher engagement and improved learning outcomes, demonstrating the broad applicability and potential of AR in enhancing mobile app engagement.

Are you familiar with Flevy? We are you shortcut to immediate value.
Flevy provides business best practices—the same as those produced by top-tier consulting firms and used by Fortune 100 companies. Our best practice business frameworks, financial models, and templates are of the same caliber as those produced by top-tier management consulting firms, like McKinsey, BCG, Bain, Deloitte, and Accenture. Most were developed by seasoned executives and consultants with 20+ years of experience.

Trusted by over 10,000+ Client Organizations
Since 2012, we have provided best practices to over 10,000 businesses and organizations of all sizes, from startups and small businesses to the Fortune 100, in over 130 countries.
AT&T GE Cisco Intel IBM Coke Dell Toyota HP Nike Samsung Microsoft Astrazeneca JP Morgan KPMG Walgreens Walmart 3M Kaiser Oracle SAP Google E&Y Volvo Bosch Merck Fedex Shell Amgen Eli Lilly Roche AIG Abbott Amazon PwC T-Mobile Broadcom Bayer Pearson Titleist ConEd Pfizer NTT Data Schwab

Personalizing Customer Experience with AR

AR technology also plays a crucial role in personalizing the customer experience. By leveraging AR, organizations can offer customized experiences tailored to individual user preferences and behaviors. This level of personalization not only enhances the user experience but also fosters a deeper connection between the user and the brand. For example, beauty apps like Sephora's Virtual Artist use AR to allow users to try on makeup virtually, offering a personalized shopping experience that has led to increased user satisfaction and sales.

Market research firm Gartner predicts that by 2025, organizations that have mastered personalization through technologies like AR will outsell competitors by 20%. This is because personalized experiences are more engaging and satisfying for users, leading to higher retention rates and increased revenue. AR enables organizations to collect and analyze data on user interactions, preferences, and behaviors, allowing for the delivery of highly personalized content and recommendations.

In the fashion industry, brands like Nike and Gucci have launched AR-powered apps that allow users to try on shoes and clothes virtually. This not only provides a fun and engaging experience but also personalizes the shopping process, increasing the likelihood of a purchase. These examples illustrate the power of AR in creating personalized experiences that meet the unique needs and preferences of each user, driving engagement and loyalty.

Driving Brand Loyalty through Innovative AR Features

AR technology is not only about enhancing user engagement and personalizing experiences; it also plays a significant role in driving brand loyalty. By offering innovative AR features that add value beyond traditional app functionalities, organizations can differentiate themselves in a crowded market and foster long-term loyalty among users. For instance, navigation apps that incorporate AR to provide real-time, turn-by-turn directions overlaid on the physical world offer a practical, value-added service that enhances the user experience and builds brand loyalty.

Accenture's research indicates that AR-driven innovations can lead to a 5% increase in customer retention rates, translating into significant revenue growth over time. This is because innovative AR features not only improve the user experience but also create a sense of novelty and excitement around the brand, encouraging users to return to the app and engage with it on an ongoing basis.

Real-world examples of AR driving brand loyalty include Starbucks' AR-enabled stores, where customers can use their mobile app to uncover hidden stories about the coffee and the store's design elements. This innovative use of AR enhances the customer experience by adding a layer of engagement and interaction that goes beyond the traditional retail experience, thereby fostering a deeper connection with the brand. Similarly, L'Oréal's AR-powered makeup app, which allows users to try on different looks, has not only increased engagement but also strengthened brand loyalty by offering a unique and personalized user experience.

In conclusion, AR is set to play a pivotal role in the future of mobile app engagement and customer experience. By creating immersive experiences, personalizing customer interactions, and offering innovative features, AR has the potential to significantly enhance user engagement, drive brand loyalty, and ultimately, contribute to an organization's success in the digital age. As technology continues to evolve, the possibilities for AR in mobile apps are limitless, offering exciting opportunities for organizations to innovate and differentiate themselves in the market.

Best Practices in Mobile App

Here are best practices relevant to Mobile App from the Flevy Marketplace. View all our Mobile App materials here.

Did you know?
The average daily rate of a McKinsey consultant is $6,625 (not including expenses). The average price of a Flevy document is $65.

Explore all of our best practices in: Mobile App

Mobile App Case Studies

For a practical understanding of Mobile App, take a look at these case studies.

Media Analytics Solution for Film Distribution Firm in Digital Marketplace

Scenario: The organization operates within the media industry, focusing on the distribution of films across digital platforms.

Read Full Case Study

Esports Audience Engagement Mobile App Optimization

Scenario: The organization in question is a prominent esports organization looking to enhance user engagement and retention on its mobile app platform.

Read Full Case Study

Life Sciences Mobile App Strategy for Specialty Pharmaceuticals

Scenario: A mid-sized firm in the life sciences sector, specializing in rare disease pharmaceuticals, is facing challenges in engaging with its patient population through their mobile app.

Read Full Case Study

Live Events Audience Engagement Mobile Application for Media Sector

Scenario: The organization in question operates within the media industry, specifically focusing on live events.

Read Full Case Study

Luxury Brand E-Commerce Mobile User Experience Redesign

Scenario: The organization, a high-end jewelry retailer in the luxury industry, has observed a significant drop in mobile app conversion rates and overall customer engagement.

Read Full Case Study

Retail Customer Experience Enhancement via Mobile App

Scenario: The organization is a mid-sized retailer specializing in high-end outdoor and adventure gear with a growing online presence.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

In what ways can mobile apps be leveraged to improve internal communication and operational efficiency within a company?
Mobile apps enhance Internal Communication, Operational Efficiency, and Training and Development by streamlining processes, facilitating real-time collaboration, and offering personalized learning, supported by examples from Slack, Microsoft Teams, Walmart, and Starbucks. [Read full explanation]
How can businesses ensure their mobile app remains relevant in the face of rapidly changing consumer preferences and technological advancements?
Businesses can maintain mobile app relevance through Innovation, Agile Development, enhancing User Experience, personalization, Continuous Improvement, and regular Market Analysis, supported by real-world examples like Spotify, Netflix, and Amazon. [Read full explanation]
How can integrating AI into mobile apps transform customer service and support?
Integrating AI into mobile apps revolutionizes customer service by enabling Personalization, increasing Efficiency and Accessibility, and facilitating Proactive Problem Solving and Feedback Collection, significantly boosting customer satisfaction and loyalty. [Read full explanation]
How is the adoption of 5G technology expected to influence mobile app development and user experience?
The adoption of 5G technology is set to revolutionize mobile app development by enabling faster data speeds, lower latency, and increased connectivity, allowing for more sophisticated, immersive applications and significantly improved user experiences across various industries. [Read full explanation]
What key elements should be included in a mobile app business plan to ensure scalability and sustainability?
A successful mobile app business plan should include detailed Market Analysis, Financial Planning, a robust Marketing Strategy, and scalable Technology Infrastructure to ensure market penetration and sustainable growth. [Read full explanation]
How can businesses leverage mobile strategy to penetrate new markets or demographics?
Leveraging Mobile Strategy for market penetration involves understanding user behavior, prioritizing mobile-first marketing, and integrating mobile payments and e-commerce to engage diverse consumer segments and drive growth. [Read full explanation]

Source: Executive Q&A: Mobile App Questions, Flevy Management Insights, 2024


Flevy is the world's largest knowledge base of best practices.


Leverage the Experience of Experts.

Find documents of the same caliber as those used by top-tier consulting firms, like McKinsey, BCG, Bain, Deloitte, Accenture.

Download Immediately and Use.

Our PowerPoint presentations, Excel workbooks, and Word documents are completely customizable, including rebrandable.

Save Time, Effort, and Money.

Save yourself and your employees countless hours. Use that time to work on more value-added and fulfilling activities.




Read Customer Testimonials



Download our FREE Strategy & Transformation Framework Templates

Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more.