An estimated 50% of all mobile phone users are now using smartphones to access the internet, which has enabled the growth of a new frontier in augmented reality, according to Golden Gekko's Caroline Van Den Bergh.

The panel at yesterday's FMCG & Media event, in association with O2 media, picked up on Van Den Bergh's scene setter presentation. Angela Maurer, head of innovation at Tesco, spoke about the supermarket's augmented reality offering. "Augmented reality is a very exciting topic - it is a huge opportunity for retailers," she said. "With Tesco it allows customers to try before they buy. It is an important element to use because it reassures customers and they can visualise items they want to purchase."

Tesco trialled the use of augmented reality technology in six of its stores at the end of last year to allow shoppers to see a 3D version of products that were available to buy from stores but that were not on display, but Maurer admitted awareness needed to be higher and this may need to be driven by other media channels. For her a "brilliant example" of a successful augmented reality campaign was the Lynx Fallen Angels ambush at London Victoria.

However, Tesco's innovation boss warned that it is vital for retailers and brands to make the experience simple for the customer. Dan Hagen, head of planning at Carat, echoed this view - saying augmented reality is "really interesting" but has the potential to go the same way as QR codes - something he described as "having potential but used badly". "Don't do it because it's cool - do it to add value," he urged. "Brands need to add value to consumer experience for it to work."

Meanwhile, Jason Wills, senior brand manager at Desperados & Tiger Beer, Heineken UK Ltd, advised brands and retailers to be "really clear" about what their marketing objective is before delving into augmented reality. "It needs to have a real added value and brands need to be really clear how it fits with other channels in their campaign... that is the key to success," he said.

For Chris Alliott, senior telecom analyst at RBS, the opportunity lies in achieving engagement and brand loyalty. Alliott also noted that there is a danger in talking about new technology too early - saying it is important that operators and manufacturers actually deliver on the promised functionality - to advertisers and consumers.