Extended Reality: Risks and Opportunities on the Cutting Edge

Bradley Intelligence Report

Client Alert


Virtual and augmented realities, or technologies that allow users to experience and explore a simulated 3D environment or interact with digital elements integrated into their physical space, are a new frontier in business, gaming, and the online experience more broadly. While these technologies (referred to under the umbrella of XR, or extended realities) have been around for a while – a classic example is the 2016 augmented reality mobile game Pokémon GO – improvements in technology have made them more accessible for a broader set of users, including applications and businesses. Incorporating XR technology could help businesses cut costs, serve customers a unique experience, and improve processes, but like any emerging technology, there are risks to adoption.

Uses for XR in Business and Education

While the stereotypical use for XR technology like virtual reality (VR) headsets is immersive gaming, broader business uses for the cutting-edge tech are proliferating. Futuristic VR tourism companies, for example, promise immersive “trips” to far-flung locations such as Antarctica or Fiji, using tools like VR boots to simulate the feeling of sand under the feet, and some consulting firms could soon start using XR decks to create an immersive, interactive presentation. Some promise to be especially applicable for businesses of all kinds.

A popular use for XR is in the design and construction industry, allowing engineers, designers, and front-end users to experience physical items before they are built. XR also can be a valuable tool for retail businesses, who can incorporate it to create a “try before you buy” option for consumers. At the lower-tech end, retail companies like cosmetics giant Sephora and eyeglass maker Warby Parker have incorporated augmented reality (AR) into their retail apps, allowing customers to “try on” cosmetics or glasses prior to purchasing them. A Harvard Business Review study of customers using AR technology to try on cosmetics found that customers using the AR interface versus a traditional browsing method spent more time in the store and were more likely to make a purchase. More futuristically, Lowe’s has begun using virtual reality (VR) to allow consumers to experience their custom-built kitchens in 3D after customizing them with Lowe’s designers. In much the same way, Audi uses VR headsets to allow buyers to sit in their cars to experience and modify customizations in real time, even visualizing their car in settings like the moon or the National Library in Paris.

Another emerging area for XR is corporate training. In 2017, Walmart began using Oculus Rift VR headsets for employee skills trainings at Walmart Academies, and has reported improvements in the test scores of employees who use VR headsets. Accenture, meanwhile, has a robust VR suite they call “the Nth floor,” which is used for onboarding training sessions, as well as meetings and socializing. XR technology could be a potent tool to strengthen employee trainings for increased skill gain and efficiency, as well as for regulatory compliance and to reduce risks of security breaches, discrimination, or workplace injuries.

XR also can enable real-time cooperation between on-the-ground techs and remote experts. One company that specializes in AR collaboration, Fieldbit, aided in a project modernizing Israeli water systems by providing techs with AR-equipped glasses on which remote experts could make markings, draw diagrams, and draw the tech’s attention to problem areas. The technology can leave techs’ hands free while enabling a deeper level of cooperation and direction than simple voice instructions over a phone.

Risks of XR

While the business benefits are manifold, XR (like all emerging technologies) carries several risks for users. Just as with any technology, XR can be hacked, creating numerous privacy and security concerns for companies and individual users. XR technologies collect a vast amount of data – even more than traditional online platforms – that can be collected by bad actors and used to generate cyberattacks or steal sensitive information. Many of these risks are common to any internet-enabled device: XR platforms are capable of being infected with malware or ransomware, for example, undermining the security of the system and leading to theft of money or data, and bad actors could affect a denial of service attack, potentially cutting off a doctor or a driver receiving AR-enabled cooperation via a wearable device at a dangerous moment. Some are more unique to XR. Many XR devices collect movement tracking and eye tracking data, all of which are extremely difficult to anonymize – a significant privacy risk. Sensitive data like this, paired with recordings of audio, in the hands of bad actors could be used to create AI-enabled “deepfakes,” aiding in impersonation scams. While XR can be a potent tool to improve user experiences and bolster business strategy, those who implement it must be scrupulous about vetting the privacy and security practices of their own platforms and third-party apps to safeguard their own data and that of their users.