What is the difference between augmented reality (AR) and virtual reality (VR)?

Virtual reality (VR) creates a completely immersive experience, isolating the user from the real world to place them entirely within a virtual world. Augmented reality (AR) enhances the real world by adding digital elements, allowing interaction with both real and virtual elements. AR is becoming popular for spatial computing, where users can have multiple virtual windows and screens appear in their environment.

How are virtual and augmented reality currently being used in marketing and sales strategies?

Some furniture brands are using AR to allow users to place 3D models of furniture in their homes via smartphones. Decathlon has launched an immersive shopping app for Apple Vision Pro, letting customers explore products in their living room. In VR marketing, IKEA created a virtual store on Roblox called 'The Co-Worker Game,' allowing players to explore a virtual IKEA and simulate various jobs within the company.

What are the advantages and disadvantages of using VR/AR in marketing?

Advantages include unmatched virtual interactivity, a rapidly growing market, and enhanced storytelling capabilities. Disadvantages include high development costs, a relatively small audience compared to traditional marketing channels, and potential user discomfort during longer experiences. While VR/AR marketing isn't yet mainstream, advancements in technology and increasing affordability suggest it will play a significant role in future advertising strategies.

VR marketing: Why brands must act now

Virtual reality marketing and augmented reality marketing are no longer side experiments. The global AR and VR headset market is worth USD 5.86 billion in 2025 and is projected to reach USD 9.04 billion by 2030, at ~9% CAGR.¹

Analysts forecast the category overall to expand at a 38% compound annual growth rate between 2025 and 2029.² Adoption is broadening too: 39% of US adults have used mobile AR, with 46% engaging weekly³, and in the UK the virtual reality market was valued at USD 1.8 billion in 2024 and forecast to grow at 14.6% CAGR to 2033⁴. Immersive platforms themselves are massive: Roblox recorded 111.8 million daily active users in Q2 2025⁵.

For brands, the evidence is clear. Immersive experiences can increase customer engagement, extend dwell time, improve conversion and strengthen loyalty. The challenge now is not whether to use immersive marketing, but how to do it strategically.

Virtual reality vs augmented reality: why both matter

Virtual reality (VR): delivers a fully immersive virtual environment, accessed via a VR headset. Once dominated by gaming, VR technology now supports virtual showrooms, virtual test drives, training and education.
Augmented reality (AR): adds digital elements to the real world, easily accessible on mobile devices. With AR campaigns in social apps and retail, customers can preview products through interactive product demonstrations.

Both are converging into mixed reality, where physical and digital blend seamlessly. For marketers, this means richer brand storytelling and new ways to deliver measurable outcomes.

How brands are using immersive experiences

Augmented reality marketing: reducing friction in the buying journey

IKEA Place launched in 2017 to let customers view furniture in their homes before buying.⁶ In 2024, Decathlon built an app for the Apple Vision Pro that allowed shoppers to look at products such as tents and bikes in their own living space. Case studies by Deloitte and Snap show AR shopping tools can deliver 4× higher conversion and +59% revenue per visitor, compared with traditional eCommerce.⁷

Virtual reality marketing: gamification at scale

IKEA launched The Co-Worker Game on Roblox, a platform with more than 111 million daily users⁵. The game dropped players into a virtual world where they could try out different roles and interact with products. Campaigns like this benefit from the spread of consumer headsets such as the Meta Quest 3, which make VR more affordable and help brands reach a wider audience.

h2o: applied expertise and measurable results

h2o has delivered projects where AR and VR solve real problems, not just create spectacle. We’ve supported retailers by testing layouts through AR before stores are built, and created digital tools that make brand stories more interactive. Our work in office design has shown how spatial technology improves collaboration and workflow. We combine creativity with metrics, helping clients run marketing campaigns that raise engagement, lift conversion and improve customer satisfaction.

Explore our spatial design projects.

Strategic advantages of AR and VR in marketing

Immersive brand experiences hold attention longer. Kantar found Snapchat AR Lenses drove 1.5× higher ad recall than standard digital formats.⁸ More time spent with content translates into better recall and stronger brand consideration.

Higher sales conversion

Virtual showrooms and virtual product demonstrations increase confidence. Deloitte’s work with Snap shows AR delivering 4× higher conversion than standard eCommerce, proving its ability to accelerate purchase decisions.⁷

Stronger brand identity and loyalty

A virtual environment gives customers more than just a product view – it lets them step into a brand’s world. When the experience reflects values such as sustainability or innovation, it reinforces what the brand stands for and makes the connection with customers more personal. That kind of immersion helps build loyalty that lasts beyond a single purchase.

Reduced returns and higher satisfaction

Augmented reality helps shoppers see how a product will look or fit before they buy it. This cuts down on mismatched expectations, reduces returns and gives customers more confidence in their choice. For businesses, that means lower costs and higher customer satisfaction over time.

Advantages and limitations

Advantages

Brands using AR or VR stand out because most competitors are still relying on traditional formats.
The market for immersive tech is expanding quickly, with billions already invested and strong growth forecast.
VR is particularly useful when businesses need to explain or demonstrate products that are otherwise hard to show in real life.

Limitations

Development costs are higher than for standard digital campaigns, and specialist expertise is needed.
The potential audience is smaller than mainstream digital environments, though it’s steadily increasing.
Motion sickness can limit the duration of VR sessions.

Future trends in immersive marketing campaigns

Spatial commerce

Virtual showrooms and virtual spaces are evolving into shoppable environments linked directly to checkout, creating seamless marketing storytelling journeys.

Personalised AR campaigns

Advances in AR technology now make it possible to tailor content to individual shoppers. Retailers can adjust product views, offers or sizing tools in real time based on how someone interacts with the app. This makes the experience more useful and increases the chance of conversion.

Integration with social platforms

Social channels are starting to host experiences that go beyond simple filters, blending real and digital layers through mixed reality. For brands, this means they can create campaigns that feel like part of a user’s everyday online activity, instead of an add-on, and reach audiences inside the platforms where they already spend their time.

Virtual reality marketing fuelling consumer familiarity

As companies use VR platforms for training, collaboration and design, everyday users grow comfortable with immersive tools — accelerating mainstream adoption.

Risks and best practices

Immersive marketing offers big rewards, but brands must avoid common pitfalls:

Gimmicks without strategy – ensure every campaign aligns with a clear marketing strategy.
Limited accessibility – make AR/VR content available on mobile devices as well as headsets.
Unmeasured outcomes – track engagement, dwell time and conversion to prove ROI.

At h2o, we help brands avoid these traps by focusing on strategy, design and measurable results.

Takeaways

Virtual reality marketing and augmented reality marketing are proven to increase engagement, conversion and loyalty. With adoption climbing and revenues forecast to surge through 2030, immersive marketing is moving into the mainstream.

Brands that act now will secure first-mover advantage. Those who wait risk losing ground.

Work with h2o

At h2o, we design immersive experiences that deliver measurable outcomes. From virtual showrooms and AR campaigns to fully integrated marketing campaigns, we help brands: