The Reality Behind Augmented Reality

Augmented Reality-web

June 2018—

It’s game on for big box and online.
But when will AR be right for your store?

When we moved into our house 16 years ago, I was convinced our downstairs bathroom needed a new paint job. The avocado green walls seemed so 1976. A dark blue, I was convinced, would make our vintage black-and-white tiled floor stand out so off to Sherwin-Williams I went.

Unfortunately, when the paint dried, that shade of blue looked nearly inky black—like some Goth teenager’s bedroom. After two months, I could take no more. I went back to Sherwin-Williams and, another gallon and $40 later, was back home with a shade of pearl. Rather than contrast the floors, I had decided to complement them.

Nope.

Next came a coral pink followed a few weeks later by something akin to lilac. When it looked like the layers of paint were eating away at our bathroom’s square footage, my wife oh-so-diplomatically chimed in: “Have you thought about something similar to what was there originally?”
And you know what? The fifth trip to Sherwin-Williams was the charm. Avocado Green.

I’ve committed other decorating crimes, too. Like the pair of leather chairs, so cozy in the large showroom, that overwhelmed everything in our den; and the glass coffee table that was the perfect length in the store but now tries to trip us when we walk around it on our back porch; and the graphic print on our living room sofa was fine—until we added some floral pillows we found on vacation in Maine. Together they can induce a seizure.

Turns out I’m your typical home furnishings shopper: Someone who absolutely knows what he wants only to have reality step in and tell me otherwise.

Ron Gordon says he’s a lot like me. “Some people are natural-born designers,” says Gordon, senior vice president of technology at MicroD, a Charlotte-based software company leading the furniture industry in new visualization trends. “But the overwhelming majority of us are in the other group where it’s not easy to look at a room and envision what that space will look like.”

No wonder furniture shoppers are leery of making a big purchase. No wonder furniture retailers are looking for ways to allay those fears. No wonder augmented reality is the most talked-about technology of 2018 for furniture retailers.

But are retailers ready and willing to embrace augmented reality?

That depends on who the retailer is, says Beck Besecker, CEO and co-founder of Ohio-based Marxent Labs, like MicroD, a leader in augmented reality technology—as well as virtual reality and 3D solutions—for the home furnishings industry. “If you’re a regional retailer, I would seriously be thinking about investing in this future because it’s already proven successful. It already has a track record of customers wanting, customers needing this for their furniture purchases. In fact, we’re at the point that customers are expecting this to be as much a part of the shopping experience as ever before.”

A quick primer: Augmented reality and virtual reality (another important technology in home furnishings) are two different animals. Virtual reality can transpose the user someplace else. Through closed visors or goggles, VR blocks out the room and puts our presence elsewhere. MicroD displayed its OmniVue 3D technology at last fall’s High Point market, transporting retailers from a Plaza Suites showroom floor to a New York City high-rise apartment in need of decorating.

Augmented reality essentially blends objects such as sofas, tables and other furnishings in the virtual world and lays them over the real world of a consumer’s living room or bedroom as viewed through a smartphone or in-store tablet.

AR is nothing new. Laying images over other images has been around in the earliest days of software packages such as with Adobe Photoshop. It wasn’t until the Pokemon Go craze a few years back that the technology caught the eye of consumers.

Early adopters like Ikea, Wayfair, Ashley Furniture and Macy’s are already offering the technology to their customers.

Ikea began offering AR technology in 2013, creating a catalog app that works with a smartphone or tablet’s camera. When a customer takes a photo of their room within the app, they can browse through the Ikea catalog and see how more than 2,000 items ranging from end tables to sofas would look in that spot.

Wayfair’s Wayfair View app lets shoppers not only see one fixed image of a piece of furniture, but it also provides a 3D image of the item that can be rotated and viewed from different perspectives, moving with the viewer in real time. It’s hard to imagine more personalization than this—essentially, an entire furniture store’s inventory is moved into the user’s own home.

HFA member Jerome’s Furniture invested in AR two years ago before ending its relationship after Cimagine, the AR application, was sold to SnapChat. Jerome’s CEO Brian Woods said the company is currently looking for another vendor.

The San Diego-based furniture chain let customers click a “See it in Your Home” button listed alongside products on its website. That action launched a mobile app that allowed people to virtually place true-to-size desks, dining sets and beds in their own home—up to three items at any given time—and get a better idea of whether the pieces were a good fit.

Scott Perry, the former vice president of digital marketing for Jerome’s pushed the project through from conception to reality. Perry was inspired after watching customers bring paint samples, pillows from chairs, pieces of carpet into the showroom and try to match the samples up with what they were interested in.

“With furniture buying, visualization is a big aspect of it,” said Perry, who late last year accepted a similar position at Bob’s Discount Furniture, the New England furniture store chain based in Manchester, Conn. “So, I had this wild idea: What if we had augmented reality so customers could see our furniture in their home with their tablet or phone?”

Theoretically, says Gordon, augmented reality in the retail furniture industry answers problematic questions for both online and offline shoppers that could otherwise slow down the buying process. Will this bed fit in my room? Will it match my decor? Practically speaking, however, the technology can’t replicate some important characteristics. Your smartphone can’t tell you if that sofa is as comfortable on your lumbar as it looks on the app.

That’s a good thing, says Gordon. “Customers are still going to come to your store to run their hands across the fabric or flop down on the sofa,” he says. “They’re still going to want to come into the store and give the retailer a chance to build that relationship. AR is no longer a fancy technology that’s always just down the road. It’s here and consumers expect this. Millennials have seen the technology in place with Snapchat for years. They’re in a mindset of ‘You furniture people can do this.’ ”

So why aren’t more tech-forward retailers embracing AR?

As usual, it comes down to money. Creating new content is expensive and time consuming (Besecker estimates a single SKU image at $50 to $100), but that is likely to drop as the technology becomes more established.

Gordon is hopeful that service providers and manufacturers will streamline the process, and retailers will be able to reuse existing content rather than creating everything fresh. “My thinking or belief is that manufacturers need to come to the realization that they need to produce these models just like they do with their traditional print photography,” says Gordon. “We’ve seen how much they invest in print photography. Moving forward it’s just a matter of expanding on that to include 3D models.”

Besecker said smaller independent retailers are still 18 months to two years away from being able to consider a viable AR strategy. “The modeling is just too high right now” he says. “For this technology to be effective a company would need to amortize the content across a half dozen or so applications.”

Lael Thompson of HFA member Broyhill Home Collections in Aurora, Colo., is typical of most mid-sized home furnishings retailers. He’s interested in its application in some form in his store, but for now the cost is too steep. Thompson is waiting for manufacturers to provide the digital assets, but he doesn’t expect that anytime soon. “The manufacturers are so buttoned up with their wallets. Furniture industry manufacturers expect (retailers) to do 100 percent of their marketing for them.”

Thompson says mid-sized and smaller furniture retailers share the same concerns about manufacturers providing the digital content, but he says those concerns are often voiced independent of one another. “Until we come together as a group I don’t see much changing,” he says.

But some manufacturers are listening and dipping their toes into the AR waters. Besecker said six of the nation’s top 20 manufacturers have entered into agreements with Marxent in the past five months (he declined to name them), hoping to be ahead of the curve and gain an advantage over others.

The advantages for retailers are many. Four months after starting its program in 2016, Jerome’s saw a 65-percent conversion to e-commerce sales for consumers using the app versus customers who shopped without the app.

That’s not all. The time needed to design their room online kept consumers engaged longer. Consumers shopping on Jerome’s website were averaging about four minutes before disengaging. That pales to the 15 minutes app users lingered while placing and replacing sofas.

Other benefits: Remember that bruise-inducing coffee table on my back porch? With customers able to position a retailer’s product in their room in advance through augmented reality, they’re less likely to return to the store because the table was too big, too small, too whatever.

Macy’s, which last year rolled out a virtual reality tool for its furniture shoppers, added an augmented reality experience this spring, allowing customers to virtually place Macy’s furniture products in their actual living spaces.

Retailers know one of the biggest pain points on a consumer’s journey for furniture is a fear that the large purchase won’t look good when they bring it home and they’ll have to return it to the store—assuming the retailer allows returns.

Macy’s online furniture returns typically hovered near 5 percent. After implementing the new technology that rate is closer to 1 percent. “Furniture is a business we love,” Macy’s CEO Jeffrey Gennette says. “It’s a high margin and very much a touch business. We think (AR) is going to open a lot of doors for us. We want it in as many stores as possible.”

While AR is an important part of developing a retailer’s presence, Gordon says the technology should be an extension of current services and not one that eliminates them. “We’re finding these augmented experiences are a natural fit for more tech-savvy shoppers who tend to be younger, but older consumers are rapidly adapting. They might still want to visit a store and try out that recliner, so you’re attracting them with the technology and then converting them with the in-store experience.”

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