Everybody is buzzing about VR/AR. Will the early adapters... the Amazons, Wayfairs, and Frontgates of this world eat your lunch?
Editor’s Note: Here's more from Furniture World's point/counterpoint duo, Bill Napier and Ed Tashjian. This is their fifth installment, having previously debated celebrity licensing, digital advertising overload, the millennial myth and whether or not furniture brands matter.
Point: Ed Tashjian
My view is augmented reality will become a mainstream tool in home furnishings, the same way it has in clothing. It is still in its infancy, and the challenges of modeling three dimensional furniture are greater, but there are many providers offering this service now. It is getting cheaper, faster and better and it won’t be long before everyone offers it.
Definitions A/R & V/R
First, let’s define what these terms mean, and how they can be applied to the furniture purchase process. VR is the acronym for virtual-reality. AR is an acronym for augmented reality. Virtual reality is the computer-generated simulation of a three-dimensional image or environment that can be interacted within a seemingly real or physical way by a person using special electronic equipment, such as a helmet with a screen inside, or gloves fitted with sensors. Augmented Reality is a technology that superimposes a computer-generated image on a user's view of the real world, thus providing a composite view.
In an applied sense, the technical difference between the two is that VR is all computer simulation. AR can take an image of an existing room in the consumer’s home and superimpose a piece of furniture, a rug, or any other home furnishings item.
As a marketer, I believe that anything that results in a consumer purchase is a worthwhile investment, and I am especially bullish on augmented reality. Let’s face it. Human beings in general are lousy visualizers. Among other deficiencies, we tend to underestimate the scale. This was one of the great failures of early e-commerce, when as much as 30 percent of the furniture was returned. It looked great online or in the showroom, but when it came home it didn’t fit.
"Anything that results in a consumer purchase is a worthwhile investment, and I am especially bullish on augmented reality. Let’s face it. Human beings in general are lousy visualizers." - Ed Tashjian
AR is not a for everyone. This type of technology is more likely to appeal to Millennials than to Boomers. In the olden days, consumers would invite an interior designer into their home. He or she was skilled in visualization, knowledgeable about what was available, and could make recommendations about everything from paint color to furniture. I have tremendous respect for interior designers. They have an encyclopedic knowledge of furnishings and day-to-day experience putting rooms together. They can imagine what a paint chip no larger than a thumbnail will look like in a whole room and prevent consumers from making a mistake.
Evolution Of The Technology
A current pitfall with at least some AR applications occurs when a screen representation is inconsistent with the installed design scheme. In the early days of fabric to frame computer mapping, the visualization was both too perfect and cartoonish. It always perfectly flow matched fabrics. People were disappointed with the final result. With time, and much more powerful computers, the results were much more realistic. Today, even that is not enough. Consumers want to see that rendering placed in their own space, and AR is the tool that can do that on any computer or smart phone. In some ways, it reminds me of the evolution of the music business. Some of you may remember going to a record store and browsing through albums. The salespeople in those stores were musicologists who asked about shoppers' likes and made recommendations. Now, we simply go to iTunes or Amazon where we not only sample the music, but use sophisticated algorithms to identify other tunes we might like. This kind of buying experience is coming to furniture stores sooner than you think.
"Now, you simply go to iTunes or Amazon and they not only let you sample the music, but use sophisticated algorithms to identify other things you might like. This kind of buying experience is coming to furniture stores sooner than you think." - Ed Tashjian
Another problem with the early days of fabric-to-frame computer mapping was that it was available only in stores. People were more impressed with the technology than they were with actually buying a sofa. They would spend hours in front of a computer, waste the sales associate’s time and eventually get bored, leaving the store without buying anything. The difference today is that they do their browsing at home on their own time and only come to stores when ready to buy. The result is fewer store visits and faster transactions. It is something we all should celebrate.
It does not take a keen sense of observation to notice that people seem to spend a majority of their waking hours checking cell phones. This tool has become the quintessential Swiss Army knife. For AR technology to work, therefore, it needs to be so intuitive, and so easy, nearly anybody under the age of 40 can use it. It’s not there yet, but it is only months away.
As more business moves to e-commerce, AR will be especially important and retailers that don’t have an ecommerce strategy in place soon will be toast. To be a successful retailer in the 21st-century requires giving consumers what they want, how they want it and when they want it. Most Millennials prefer emails, texts and chats over speaking to a live person. They tend to shop by inspiration and buy for practicality. They need to be able to visualize a solution.
The furniture industry is typically slow to adopt new technology. There are many reasons for this, but I believe that it is mostly a lack of imagination. When new technology emerges, it tends to be pretty rough. By the time it evolves it is too late. It takes a special kind of retailer to see the oak tree in the acorn. AR is a technology that you will avoid at your peril. The Amazons, Wayfairs, and Frontgates will eat your lunch.
Counter Point: Bill Napier
I’m supposed to be writing the counter-point for this article, but before I do let me state, I agree with Ed that these technologies are sorely needed. Those brands and retailers that don’t adopt these platforms will fail with impunity.
Ed writes, "everybody is buzzing about VR/AR/technology." It's true that, like a swarm of bees, marketing people in our industry have created a real buzz regarding these technologies. In a real hive, female worker bees do the work that ensures long-term survival of the hive. Male drones, in contrast, show interest at the appropriate time, but have a dismal rate of success at execution.
I won't take the bee metaphor much further, but buzzing about technology isn't the same as successfully adopting it. And, my experience dealing with marketers in our industry does not give me much confidence that many companies who have the most to gain from the successful adoption of VR/AR technologies will move forward.
Problem With Poor Content
Let's examine how our industry has traditionally reacted to leading technologies.
It seems like ancient history, but back around 2004 there was certainty among most marketers in our industry that consumers would not want to see, nor ever buy furniture online.
The reasoning made sense back then, but today it seems quaint.And even today, manufacturing brands in particular have not fully embraced this technology.
First, the content manufacturers put out on their own websites for use by their retail customers is horrible. Look at the descriptions they write, it’s minimalistic and borderline pedestrian at best. It neither engages nor educates. It’s not written to be found in search. Even though over 85 percent of all furniture searches start on the internet, manufacturers have not invested in this basic marketing premise either out of laziness or ignorance.
No Product Standardization
Second, most manufacturers do not “standardize their products” so they can be pushed out to retailer’s websites and/or POS systems, even in a simple excel format. But that’s not the scary part, most companies don’t even know how to do it! I can state this because for two years I offered a program to standardize furniture manufacturers' content for FREE! Yep, we offered to do all the work and not charge a cent.
I'm sorry to say that manufacturing marketing gurus' response to this offer was a total “deer in the headlights” scenario. They had no clue what it was or how they’d even get access to the content.
We got the same result when the topic of API feeds was brought up. An API is a software intermediary that allows two applications to talk to each other in real time. The benefit is that manufacturers' products, inventory... everything, is automatically fed to retailers' POS systems and websites.
My conclusion is if manufacturers can’t or won’t even invest in these basic technology elements so that 85 percent of web searches can find/learn about their products, how and why would you think they’d invest in the technologies Ed is referencing or any advanced business technologies for that matter?
We worked with Cimagine, a company sold to Snapchat in 2017 to penetrate the furniture industry with an Augmented Reality App. It was simple enough, one line of code placed on a retail website allowing an “AR rendered product” to be placed into a room setting photo taken on a phone or tablet. Jerome’s implemented this AR APP in 2016.
Here is what happened
- Jerome's experienced a 65 percent conversion to e-commerce sales for consumers using the app vs. those who did not.
- The app nearly quadrupled the time users spent on Jerome's website to 15 minutes for users, vs. four minutes for other website visitors.
This was well published in the industry, but the results were met with a collective yawn by retail and manufacturing marketing executives who either showed no interest or were put off by the cost.
To render an image might cost about $40. That's $120,000 for 3,000 SKU’s. Yet think about this! The average room shot runs close to $1,200 and a product shot, $200-$350. So why would anyone continue to spend five times more and get left behind?
The big vertical furniture companies and online giants are already implementing these technologies, leaving the rest of the industry to catch up. It's my view that the future does not belong to paper catalogs, driving Oldsmobile’s and other comfortable Neanderthal marketing tactics.
Retail & Brand Websites
Now let’s talk about simple websites. At best, there's a huge disconnect between what furniture brand marketers and furnishings retailers expect (personally) when they shop for goods online, and what they offer up as marketing professionals to their own customers who are shopping for furniture.
"Manufacturers' website content neither engages nor educates. It’s not written to be found in search. It’s minimalistic at best." - Bill Napier
More specifically, folks who work for retailers and manufacturing brands expect, when shopping for their own homes, to be served up a ton of results from different companies so they can comparison shop, yet they refuse to give their “paying” customers the same option. Worse yet, brick and mortar retailers have been unbelievably slow at adding e-commerce, showing lackluster interest in selling online, even though by 2020 it’s expected that over 30 percent of all home furnishings will be purchased there.
Outdated Terminology
Even how the furniture industry describes products is holding us back. Who searches by style anyway? And what are Traditional, Contemporary and Modern styles? When people search for furniture, they shop “The Look” first. Consumers don't want to use an archaic and outdated style generator created in 2004! I've been in the furniture business much of my adult life and I don't know what a Transitional style is or what value it brings to the sales process. If you know the answer, please email me!
Most of us have used “Visual” search to find products when on Amazon, Google, Bing, and virtually everywhere else on the web. This technology shows customers products that are visually similar to ones they either see on a retailer's website or have uploaded from a different source. Using an AI (Artificial Intelligence) application, the shopper is automatically shown “Like” images by style/color, etc. It seems like visual search would be a no-brainer for most any furniture retailer, but here again, most of the industry is lagging behind.
A Poor Track Record
Now let’s talk about our industry's generally poor track record of working with technology companies. Yes, everybody is talking about Big Data, Retail Automation, Block Chain and more. But few have embraced it as they should. Many times I've seen technology companies and their ideas get shot down due to a lack of trust. They tend to be viewed as outsiders, insufficiently knowledgeable regarding the realities of the furniture industry.
"My experience does not give me much confidence that companies who have the most to gain from the successful adoption of VR/AR technologies will move forward." - Bill Napier
This mindset may be rooted in past experience. Back in the 1960s and '70s outsiders, companies like General Mills came into our industry thinking they could market furniture like Cheerios from their remote corporate facilities in Minneapolis, NYC, etc. They thought it was a commodity that needed an infusion of creative and messaging to be more profitable.
The outsiders bought up many brands and ignored the insiders; the manufacturing people, furniture designers, logistics people and more, causing chaos, plant closures/failures and ultimately the demise of many furniture companies. Back then, the outsiders ignored the insiders, with disastrous results.
Repeated In Reverse
Today this scenario is repeating itself, only in reverse! The insiders are ignoring the outsiders and these insiders will fail miserably! Who are the outsiders? Primarily technology companies. Who are the insiders? Primarily marketing and management people tasked with creating, engaging and educating consumers to buy their products. Marketers and management insiders are so concerned about their furniture markets and placements, they forget about what I believe should be a big part of their job description— enabling the technologies that consumers use to find, learn about, and buy their products. Instead, they rely on a strategy of HOPE, that retailers will purchase and be able to market their products correctly, without any help from manufacturers.
"Today this scenario is repeating itself, only in reverse. The insiders are ignoring the outsiders and these insiders will fail miserably!" - Bill Napier
The conundrum for me is that technology runs everything in our lives and yes, furniture people’s lives too, but rarely does our industry use business intelligence technologies to improve the bottom line. The Super-Regionals do, and that’s why they are growing at independent retailers' expense even though these technologies can level the playing field by cutting costs, improving efficiencies and their GMROI while they do.
A Matter Of Survival
By now, you probably realize I am less optimistic than Ed, that "It won't be long before everyone offers" AR/VR technology. Neither do I believe that most manufacturing brands and retailers will embrace the technological changes required for their survival. Still, I suggest that every manufacturer and retailer should set up a technology task force to study and learn about the technologies Ed discussed. We’ve lost thousands of retailers, over 400 factories, over 290,000 furniture jobs since 2004 mainly because we didn’t embrace change and we still don’t.
In summary, let me give you a one-word definition of your business should you ignore what Ed has outlined for your future if you don’t embrace these new technologies... plus a final piece of advice.
The one-word is: Irrelevant.
The final piece of advice: You can’t think yourself into acting, you must act yourself into thinking.
About Ed Tashjian: Tashjian Marketing provides senior marketing leadership to the Home Furnishings Industry. It specializes in business analytics and in helping its clients to segment the market, define and communicate a sustainable differentiated value proposition. Get more information at www.Tashjianmarketing.com or call (828) 855-0100.