Flevy Management Insights Q&A
What role does augmented reality play in enhancing the customer experience in subscription services?


This article provides a detailed response to: What role does augmented reality play in enhancing the customer experience in subscription services? For a comprehensive understanding of Subscription, we also include relevant case studies for further reading and links to Subscription best practice resources.

TLDR Augmented Reality (AR) significantly improves customer experiences in subscription services through immersive product discovery, personalized engagement, enhanced customer support, and unique brand experiences, driving loyalty and reducing service costs.

Reading time: 5 minutes

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

What does Customer Experience Enhancement mean?
What does Immersive Technology Utilization mean?
What does Personalization at Scale mean?
What does Self-Service Empowerment mean?


Augmented Reality (AR) is rapidly transforming the landscape of customer experiences across various industries, including subscription services. By overlaying digital information onto the physical world, AR offers a unique, immersive, and interactive experience that can significantly enhance the value proposition of subscription-based models. This technology not only helps in attracting new customers but also plays a crucial role in retaining existing ones by providing them with a novel and engaging way to interact with products and services.

Enhancing Product Discovery and Engagement

One of the primary ways AR enhances customer experience in subscription services is through improved product discovery and engagement. By leveraging AR, organizations can offer their subscribers an interactive and immersive way to explore products and services before making a purchase decision. For example, a fashion subscription service can use AR to allow customers to virtually try on clothes, helping them make more informed decisions about what to buy or rent. This not only improves the customer experience by making shopping more fun and interactive but also reduces the likelihood of returns, which is a significant issue in the fashion industry. According to a report by Accenture, incorporating immersive technologies like AR into the customer experience can increase conversion rates by up to 40%.

Additionally, AR can be used to provide interactive tutorials and demonstrations for products, which is particularly useful for subscription services offering complex products or services. For instance, a tech subscription service can use AR to guide customers through the setup and use of gadgets, significantly enhancing the customer onboarding experience. This interactive form of learning helps in reducing the frustration associated with learning new technologies, thereby improving customer satisfaction and loyalty.

Moreover, AR enables organizations to create personalized experiences at scale. By using analytics target=_blank>data analytics, companies can tailor the AR experience to individual preferences and behaviors, making product discovery and engagement more relevant and engaging. This level of personalization is key to building strong, long-lasting relationships with subscribers.

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

Improving Customer Support and Service

AR also plays a critical role in transforming customer support and service for subscription services. Traditional customer service channels often struggle to address the complexities and nuances of customer issues, especially when it comes to products that require a visual context for troubleshooting. AR can bridge this gap by enabling customer service representatives to visually guide customers through solutions in real-time. For example, a home appliance subscription service can use AR to help customers troubleshoot issues by showing them exactly what to do through their smartphone cameras. This not only resolves issues more efficiently but also significantly enhances the customer service experience.

Furthermore, AR can empower customers to solve their problems independently, reducing the need for direct customer service intervention. By providing AR-based self-service options, organizations can improve customer satisfaction while simultaneously reducing the load on their customer service teams. This is particularly important in the subscription economy, where the cost of servicing customers can significantly impact profitability.

Organizations that implement AR in their customer service processes can see substantial benefits. According to a study by PwC, AR has the potential to reduce the time it takes to resolve customer issues by up to 50%, leading to higher customer satisfaction and reduced costs for the organization.

Creating Unique Brand Experiences

Finally, AR offers organizations the opportunity to create unique and memorable brand experiences that can set them apart in a crowded subscription market. By creating immersive and interactive brand experiences, organizations can engage customers in a way that goes beyond traditional marketing and advertising. For example, a streaming service can use AR to create interactive promotions for upcoming shows, allowing subscribers to explore show-related content in an augmented reality environment. This not only generates excitement and anticipation for the content but also strengthens the emotional connection between the brand and its subscribers.

Moreover, AR can be used to gamify the customer experience, adding an element of fun and competition that can increase engagement and loyalty. For instance, a fitness subscription service can use AR to create virtual challenges or races, encouraging subscribers to stay active and engaged with the service.

Organizations that leverage AR to create unique brand experiences can significantly enhance their brand perception and loyalty. A report by Deloitte highlights that brands that offer exceptional experiences are more likely to see higher levels of customer loyalty and advocacy, which is critical in the subscription economy where customer retention is key to success.

In conclusion, Augmented Reality is not just a technological innovation; it's a strategic tool that can significantly enhance the customer experience in subscription services. From improving product discovery and engagement to transforming customer support and service, and creating unique brand experiences, AR offers a multitude of ways for organizations to differentiate themselves and build stronger relationships with their customers. As AR technology continues to evolve, its role in shaping the future of customer experience in the subscription economy will undoubtedly grow, making it an essential component of any forward-thinking organization's digital strategy.

Best Practices in Subscription

Here are best practices relevant to Subscription from the Flevy Marketplace. View all our Subscription 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: Subscription

Subscription Case Studies

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

Subscription Model Transformation in Agritech

Scenario: The organization is a leading provider of agricultural technology services that recently transitioned to a subscription-based revenue model.

Read Full Case Study

Subscription Model Transformation in Specialty Retail

Scenario: The organization operates in the specialty retail industry, focusing on high-end, niche market products with a subscription-based revenue model.

Read Full Case Study

Subscription Model Transformation for Hospitality Industry Leader

Scenario: The company in focus operates within the competitive hospitality sector, struggling to maintain customer loyalty in a saturated market.

Read Full Case Study

Subscription Model Advancement in Life Sciences

Scenario: The organization is a mid-sized biotech company specializing in rare disease treatments that is transitioning from traditional sales to a subscription-based model.

Read Full Case Study

Subscription Model Transformation in Specialty Chemicals Sector

Scenario: A specialty chemicals firm in the competitive North American market is struggling to transition from traditional sales to a subscription-based model.

Read Full Case Study

Subscription Model Transformation for a Maritime Education Provider

Scenario: A prominent maritime education institution is grappling with the challenge of transitioning from traditional one-time course fees to a subscription-based revenue model.

Read Full Case Study

Explore all Flevy Management Case Studies

Related Questions

Here are our additional questions you may be interested in.

How can businesses leverage artificial intelligence to enhance personalization in subscription services?
Leveraging AI in subscription services improves Personalization, Customer Satisfaction, and Retention by analyzing data for tailored experiences, optimizing chatbot interactions, and refining subscription models. [Read full explanation]
What metrics are most critical for measuring the success of a subscription model beyond the usual financial KPIs?
Critical metrics for subscription model success include Customer Lifetime Value (CLV), Churn Rate, and Engagement Metrics, essential for Strategic Planning, Customer Relationship Management, and Business Transformation beyond financial KPIs. [Read full explanation]
In what ways can subscription businesses integrate sustainability practices into their operations and offerings?
Subscription businesses can integrate sustainability by optimizing Product Design and Packaging, leveraging Digital Transformation for Operational Efficiency, and building a Sustainable Supply Chain, reducing environmental impact and unlocking growth opportunities. [Read full explanation]
What strategies can be employed to reduce churn rates in subscription-based models?
Strategies to reduce churn in subscription models include improving Customer Experience, leveraging Personalization, and utilizing Data Analytics for predictive insights to maintain revenue and customer relationships. [Read full explanation]
How is blockchain technology influencing subscription management and customer trust?
Blockchain technology is revolutionizing subscription management by providing Transparency, Security, and Decentralization, thereby significantly improving customer trust and efficiency in subscription processes. [Read full explanation]
How can subscription models be adapted for markets with low digital penetration?
Adapting subscription models for low digital penetration markets involves understanding local consumer behavior, integrating alternative payment methods, leveraging Strategic Partnerships, and investing in Customer Education and Support to drive growth. [Read full explanation]

Source: Executive Q&A: Subscription 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, Balanced Scorecard, Disruptive Innovation, BCG Curve, and many more.