Shop.org 2018 Innovation Lab

Brian: [00:01:40] Hi, I'm live here at Shop.org, looking at the 3D look booth in the Innovation Lab. And obviously Future Commerce has been tracking the body scanning technology trends for some time now. I'm really excited to talk to 3D Look and hear what makes their product special as opposed to some of the stuff we've seen in the past couple of years. So Vadim, I'd love to hear a little bit more about 3D Look.

Vadim: [00:02:13] Yeah. Thanks, Brian. So my name is Vadim. I am the CEO and co-founder of 3D Look. So what makes us different from the like all the companies that tried to accomplish the same thing like five, six, seven years ago, and even now, is it that they were and still are trying to extract the measurements from 2D images, from 2D photos. So as you can imagine, it's very hard to extract accurate measurements, like accurate volumetric measurements, from 2D photos. They were using simple math to do that. And what we did, what we understood after 18 months of pure research and development is that first of all, we should go from 2D to 3D, and then we should extract the measurements from 3D model. And only this approach allowed us to reach this level of accuracy that we have that is far ahead from all the competition.

Brian: [00:03:05] That's phenomenal. Yeah, I love that approach. So you're just using a picture from someone's phone to create these measurements?

Vadim: [00:03:13] We use two pictures, front and side. What also makes our technology unique is that we can process photos of dressed people. So one layer of clothing, like casual clothes, is ok. It was part of our mission to allow people not to put too much effort to do that. So, yes, three images from your smartphone, front and side in any background, no white walls. Just any background.

Brian: [00:03:41] That's amazing, and what kind of accuracy levels are you looking at?

Vadim: [00:03:45] Right now, we see that the error margin for people from Northern America and Europe for such types of bodies is within three centimeters. And we have plans to improve it before the end of the year.

Brian: [00:03:59] That's great. And how are you using this data? Is there a tool that retailers can use to address their customers? Are we looking at custom clothing? Are we looking at sizing? How is it being applied?

Vadim: [00:04:11] First of all, yeah, we see that it's very interesting for omni channel retailers and brands, especially fast fashion brands and sports apparel brands for size and fit, for personalized size and fit recommendations. And also for apparel design, a virtual try on because we can also generate the avatars that can be animated, texture...

Brian: [00:04:36] That's great. I know lots of application, and we talked about it in health and fitness and clothing and gaming and all kinds of different places. Are you primarily focused on fashion right now?

Vadim: [00:04:48] Yes, of course. This is our main vertical.

Brian: [00:04:51] Okay, great. And what do you see the future of this headed? Let's see this technology sort of plays out and you start to see adoption. Where do you see it going and how consumers will start to use it?

Vadim: [00:05:01] So this year we spent eight months of this year on different proofs of concept and pilots with different and most innovative retailers and brands in the world. Now we see that next year should be the level of adoption among all these most innovative companies that they will be rolled out commercially. And 2020 should be the year of adoption across the whole apparel eCommerce market.

Brian: [00:05:32] Wow, that's amazing. That's probably in line with what we've been saying as well. 2020 is when we're going to start to see instead of worrying about your size all you have to think about is fit and fabric and focused on the things you really want to focus on. I love that. That's great. Well, thank you so much for coming on the show for a few minutes. And I love to see where you're headed and keep track of what's next for your company. Thank you.

Vadim: [00:06:08] Thank you very much, Brian.

Brian: [00:06:08] Brian Lange. Future Commerce. Live again from the Shop.org floor, marketplace floor. I'm here with Allure Systems and I'm really excited to talk with them. They do digital models, virtual models, and I'll let them kind of put it in their own words. So I'm here with the CEO, Gabrielle.

Gabrielle: [00:06:30] Hi, everyone. I'm Gabrielle. And yes, in Allure we virtualize fashion garments and we virtualize model and we put the two together. We combine them so that any models of any size can wear any garments.

Brian: [00:06:44] That's amazing. We talk a ton about the digital avatar and body data and where retail's going with all this. So this is really exciting technology to me personally. So can you explain to us a little bit more about how the platform works and what you're able to do as a retailer?

Gabrielle: [00:07:06] Yeah. So our clients, retailers, what they do is we set up the equipment that enables them to virtualize their garments. And with this virtualized garment, they can use our platform to put any models wearing it any time. So the first benefit for them is to produce their online catalog of images without the need for having a big team of models, photographer, etc. And certainly cut a lot of the costs. But also one of the big reasons why they are interested in our technology and using it is because it gives them scale. Literally. It enables to produce more rapidly content, put it online and you know, if you put it online right away as you receive it, you can start to sell it, which obviously increases your revenue. So that's the first benefit. Having said that, with the same technology what we can do that's really what you were referring to earlier, is that this capacity to produce more than traditional photography is to produce content that is more diverse, so that it's more inclusive to the different type of consumer. You and I were not perfect models type right? At least for me.

Brian: [00:08:28] Right. Me neither.

Gabrielle: [00:08:29] I'm not a size 2. So when I go online sometimes I feel a bit frustrated to say, is this dress really going to fit me? And I buy it and I probably 2 times out of 3 will return it because it doesn't. But now with our type of technology, what you can do is that you can see a model that looks like you, that's your size, wearing it. And already it gives you a perspective about, OK, what does it look like on the size 6 or 8 or whatever your size is? And that probably reduced the return rate and as well as increase the conversion rate because I feel more confident to buy. So that's the second benefit of our technology. And the third on is what you alluded to, is that one day you and I will have our avatar on our phone and we would be able to try on the clothes that we want to buy. And we will have an idea, a much better idea. And that would be super exciting.

Brian: [00:09:32] That is super exciting. We've been talking about this on the show for a couple of years and been really looking forward to seeing this actually come to life. And how have retailers been responding? You started in 2017, so just over a year ago. And so what kind of response have you seen from the market so far?

Gabrielle: [00:09:50] So we're very fortunate because we have very large retailers that started to work with us. The reason they start is because they do have a bottleneck right now. You know, the little dirty secret of fitting garments online for to sell online fashion eCommerce site is that they have to produce all this content that cost a fortune for them. So they've been very excited with what we're doing.

Brian: [00:10:17] That's great. Can you mention the big retailer that you're working with or is that off the record?

Gabrielle: [00:10:24] We can say we started a pilot with a Walmart, and we're very excited by that because obviously it's a very large retailer. We started also with dealers, but this is more like to do the entire catalog. So, yeah, we're super excited with what's going on.

Brian: [00:10:42] It's just so exciting. There's so many different aspects to what you do. And one of the things you mentioned is the asset library. The digital images. So what does that process look like? Are you capturing multiple images? Video? How do you put the catalog into an image that they can use?

Gabrielle: [00:11:02] We provide to our clients the equipment. Think like a giant Xerox machine, and that enables them to capture the garment 360 degrees. The process is called photogrammetry. Now, with the photogrammetry what you have is a file that you can look on every site, but doesn't mean that it's a 3D object that can let the customer try on. You don't want a dead file. You want to file that we can interact with. So that's what we bring. We bring not only the technology to capture, but the technology to make it wearable by any body.

Brian: [00:11:43] Wow. It's amazing to me that you're out there and actually working with Walmart. It's indicative of where the industry is going. Another thing that you mentioned is digital likeness and your digital avatar in the future. And so right now, you're working mostly with models. Can you tell me a little bit about how you interact with the modeling community and to bring their likeness into your platform?

Gabrielle: [00:12:10] Right. Models have understood that they have only 365 days in a year and that probably the retailer only shoot 200. So they understand that they have only one body and they need to turn up at the shooting event to get money. With us what we enable is they can stay in their bed literally and they will still get money. So the interaction is very good with their agencies because actually we provide another source of revenue for them without having them to literally turn up on the shooting scene.

Brian: [00:12:44] Well, yes, that makes sense. Do you pay them out like her per time that it's viewed? What's the revenue model?

Gabrielle: [00:12:52] It really depends on the model and how famous she is. So the most famous will ask for every usage that we make of her. The less famous ticket lump-sum.

Brian: [00:13:04] Got it. Do you contract for like a specific photo shoot in those images or is it like lifetime rights to use their likeness on into the future as they age? So we're looking at diversity in the types of assets that you're presenting to different consumers. And so age is one of those. So are you capturing the life of their digital likeness or is that just for a specific moment in time?

Gabrielle: [00:13:35] Right. And it's a very specific moment in time. We can definitely artificially change them, but that's not exactly the idea of what we have. We want to capture a model as she is, and she probably have a lifetime with this image of two to three years. And then the trends are changing. And that's what is beautiful. I mean, we humans are still useful. Models are still useful. They continue to have a life, they change their look, they change, and it doesn't mean that because they changed, the old self does not exist anymore. So we are more of an enabler to diversity rather than trying to pretend something and making a fake avatar that is moving in the time.

Brian: [00:14:23] Yeah, that's amazing. I think that that's really cool because they can actually continue to make money on images of themselves from when they were younger. And that's a new revenue source for them. Now for well, let's look a little bit ahead to the future. You mentioned your personal digital avatar and inserting that into different clothes and maybe looking at what you look like if you lost two pounds in those clothes or things like that. But I think there's definitely also like a big question about privacy and security and like how that's going to play into things. How do you see this whole digital avatar thing evolving over time and playing into the commerce cycle?

Gabrielle: [00:15:10] Well, on the avatar, you'll have two things. You have the body that is really necessary to try on the clothes. And that's where you want to fitting to work. And you have the face. So on the fitting site, this is where we work. And this is really our forte is the capacity to put the clothes on and see what the look on you. That's really where we are. So there's not a lot of copyright over the body. And actually, the consumers are quite happy to see themself to try on the clothes. Where the face is concerned... First, in today's technology to face is something that needs to be protected. So in our company we don't use the face of someone that we don't have the authorization. And I think most of the brands that I know of, they're international brands, they would never use the face of a consumer without this authorization. At least that is my understanding, but I could be wrong.

Brian: [00:16:16] Oh, that's really interesting. The face really is that unique identifier. So it is interesting. Well, thank you so much for talking with us. Really looking forward to where this is headed and to see it in broad use. We've been talking about it for a couple of years, so this is super exciting to me. Thank you so much for talking with me.

Gabrielle: [00:16:33] Thank you very much. It was a pleasure.

Brian: [00:16:41] And I'm back again at the Shop.org marketplace floor, the Innovation Lab. This time I'm here with a Shoptelligence. And the CEO. Laura, thanks for being on the show, Laura.

Laura: [00:16:52] Thank you for having me.

Brian: [00:16:55] This is a really interesting piece of technology that Shoptelligence has put together. It's a curation sort of product discovery and set completion technology. I'll let Laura put in her own words, though.

Laura: [00:17:09] Yeah. Thank you. Shoptelligence is a style discovery platform. We transform basic product data into interactive ensembles, meaning outfits or complete room decors that the shopper can really change to make their own and ultimately discover more to purchase more.

Brian: [00:17:27] That's great. And I think from what I'm seeing here, you're not necessarily into like visualizing. It's more about building the kit. So can you tell me a little about how that works?

Laura: [00:17:38] Yeah, absolutely. We take a retailer's product feed and the retailer puts three lines of code on their site and we display the module in eCommerce. But eCommerce is not all. We're an API based solution. So we integrate with a variety of visualization technologies, including augmented reality and virtual reality, bots and other innovative mechanisms, like intelligent fitting rooms.

Brian: [00:18:03] Well, that's great. So you could put together an entire room and then have your API connect to an AR tool and then just automatically see that room in the space that you're in. Is that kind of how it works?

Laura: [00:18:13] That's exactly it. I mean, if you've got an AR solution, it's hard to figure out what to put in. We help address that question of what do you put in? Based on what kind of room it is, what your style is, and what your price point is.

Brian: [00:18:25] Wow, that's really cool. So you can basically put in your budget, put in your room size, and kind of maybe your aesthetic or something along those lines, and then it will just kind of create different solutions. And then can you kind of change things out there and make recommendations about maybe like, "Oh, want to look at something else in this space?" Or "You want a different couch?" "Want a different chair?" Is that how it works?

Laura: [00:18:44] Exactly. So we give the shopper a starting point and then we give them the ability to switch items out with additional suggestions that still make sense.

Brian: [00:18:54] That's so cool because it's personalization plus all of the best of the new technology we have know. AI and AR, and it's all coming together and helping shoppers make decisions that they're actually going to like. And they can do it from the comfort of their home. I'm starting to like... We've been talking about this for a long time. This is not a new concept. But like the "e" needs to be dropped from commerce and it needs to be like home shopping experiences and in-store experiences, on the go experiences. And I feel like this really is a great example of a home or on the go shopping experience that can help customers make decisions without ever touching a product.

Laura: [00:19:33] Exactly. And from our perspective, personalization is one component of it. But what we deliver is truly seamless personal assistance. We understand how products are used. We understand how they go together and what the different use cases are and build around that and add the layer of personalization on top of that.

Brian: [00:19:52] Well, that's super cool. Thanks so much for coming on the show and talking with me. It's a really interesting platform you have. Thank you.

Laura: [00:19:58] Thank you.

Brian: [00:22:47] And I'm back, live, here at the Innovation Lab at Shop.org. And now I'm here with the company's SmartPixels that basically... They're calling it 3D you can touch, which is really cool. Basically, it's in-store virtual customization products, and it's kind of hard to describe. So I'm going to let Sam from the company, explain exactly how this works and give you a visual picture of what I'm looking at right now.

Sam: [00:23:19] Thanks, Brian. Indeed, it's quite hard to describe. So what happens exactly is I have in my hands a white sneaker, regular white sneaker, and I'm going to change the color and the texture of that sneaker. So on that very same object, I can look at all the different variants, all the different possibilities without looking through a screen, without looking through glasses. My eye is naked and my hands are in my pocket. And I'm going to create an item. I'm going to create an object that doesn't exist. So when I'm customizing something, I get a good feeling of what I'm purchasing before it exists.

Brian: [00:23:53] So basically in this example, it's a shoe and it's basically a blank shoe. And you put that shoe into basically the customizer box, if you will, and and then you've got a tablet off to the side, and you're able to go through and actually customize the shoe and see what it's going to look like down to material and color and different variants of that shoe before you order your custom products. So in-store customization. Now, this is the in-store component. It sounds like you having an eCommerce component as well. Can you talk a little bit about how those two go together?

Sam: [00:24:31] Absolutely. So the configurator you just mentioned on the tablet, we can use it online. So you on the Web site, you're looking at different colors, different variants. You can go to the store and see what your creation is like in real life. And the other way around, you can customize your sneaker in the store. And then save it for later.

Brian: [00:24:51] Oh, that's so cool. So the online and offline converge here with the customizer that you can actually start something in the store. Maybe you don't want to make the purchase right then, but you can go and you know, as you're on your way home in your car, hopefully someone else is driving, you can finish your customization on your phone and hit order and vice versa. You can start it and then, you know, get a better feel and go into the store and see what it's going to look like. That's amazing. So where do you see the future of customization here? Is what I'm looking at sort of the end product? Or like how do you expect customers are going to engage with this and how will it influence their shopping habits?

Sam: [00:25:32] Couple of things. We've mentioned tablets to customize the item. We're thinking about actual samples. You know, you're touching leather, you're touching suede, you're touching different colors, it transforms the objects. So not tactile screen, but actual tangible applications.

Brian: [00:25:48] Right.

Sam: [00:25:49] Very important. And second aspect that we're developing as well already in production with most of our clients... When you customize that product, it's unique. You need to get that information to the manufacturing. And with that experience, we collect the data, we give it to the brand, give it to the plant, we get it to manufacturing. And all of this is centralized and makes the whole customization process much easier.

Brian: [00:26:11] Oh, my gosh. That's amazing. I love this because it's just a consistent customer experience across all channels. And then on the back end, you're working with manufacturers and providing what information they need to make actual customizations or maybe even onsite customization. Right? Oh, that's awesome. Well, I can tell you right now, it's unbelievable the way that this machinery or this tool is able to actually change this white basic shoe. It's really, really like... You can add different layers of depth and make the material look different. It's super, super cool. Thank you so much for telling us about your company and where retail is headed next.

Sam: [00:26:52] Thank you, Brian. Thank you very much.

Brian: [00:26:56] Brian Lange. Future Commerce. Back live here at Shop.org Innovation Lab with Seek, which is an appless AR company. Really excited about this. Speaking with the guys here, Mike and Jon, and learning a little bit more about how the product works. So Jon, you want to introduce yourself and then maybe give me a quick synopsis of how Seek works?

Jon: [00:27:17] Definitely. So Jon Cheney, co-founder. Mike Snow, co-founder right here next to me. We've been in the AR industry for a few years now and worked with many of the world's biggest brands. Samsung, Six Flags, Cinemark. You know, and everybody in between. Lots of lots of great brands, Overstock. Harley-Davidson. So we've had several apps out of the market, built a lot of projects and things like that, but one of the big barriers we really found was an app. Right? An app adds a lot of friction to the buying process specifically or really to any experience. Right? Consumers don't want to have to go for that extra step, right? Unless you're Amazon, people aren't going to download your app. And so most of that search for products is going to happen maybe through Google and then land on a Web site. And you want still to be able to bring this amazing AR experience. And so we worked really hard as a team to be able to make this possible. And so now on IOS and Android, starting next Monday, you'll be able to do this AR without an app. This is a brand new thing coming out in a few days.

Brian: [00:28:22] So how does the experience work? Like, let's say you're a consumer and you're going to shop on Overstock. So you are just seeing the browser and you click see in AR?

Jon: [00:28:32] Yeah. You know, one of the nice things about appless AR is it doesn't really change the customer journey very much. It just improves it. If you're going to buy a table, the kitchen table, for example, from Overstock, you're going to navigate to their page. You're going to find the table you want, and you're going to click on a picture or a video. You're going to need to see the product. You got to visualize it before you can decide to buy it. But with this, what we do is we just make that picture a whole smarter. And so if they're on a device that supports AR it will automatically detect that. When you click on it, it will say, here's a 3D model. And now you can see in AR and look at it right in your environment.

Brian: [00:29:07] Nice. Now, I'm assuming the asset management and collection, that's a big part of this to do. Do you play any part in that aspect?

Jon: [00:29:14] We certainly can. There's several parts to the process. One, there's asset creation. That we don't like to do as much. But we have a lot of great partners that do that. And we can do it, call it smaller jobs. But we have other partners that can do really big jobs and we really focus on the next step on from, OK, give us all your models. We'll then post them, convert them into a bunch of different formats that make this possible and then seamlessly integrate that into your Web site for the customer to be. So when a customer actually clicks on a Seek link, they don't see Seek. It's all integrated seamlessly into the Web site, and it's all kind of behind the scenes. But we do store it and host it and enable it so that it works cross-platform across not only IOS and Android, but also it works on a computer with a 3D view and it will work on Magic Leap and will work on these other AR devices that are out there. And Overstock doesn't have to keep coming back and saying right now, Magic Leap's out, what do we do now? No, they just give us that model. We'll make it work on everything very much like YouTube does for video. YouTube makes it work everywhere.

Brian: [00:30:17] That's awesome. We've talked about this on the podcast. No one's even going to use the word AR in the future. It's just going to be like, oh, yeah, see this... Just a capability of the web and your device and you're not thinking about it like it's augmented reality. It's just what your device can do?

Jon: [00:30:35] Right.

Brian: [00:30:35] And so I love this because as long as we have to continue to have an app to do it, people are going to keep thinking about it like it's this AR thing that you have to install and use. And so this makes it seamless. Have you started to see how customers are using this, and how it's affecting conversion rates and so on?

Jon: [00:30:55] Absolutely. So I can speak to AR as a whole. When AR is used in the buying process, whether that's in an app or Web site or wherever, there's about a 30% average increase in conversion, which is pretty substantial. I don't know how long that will hold, but when you can see that product in your life, whether it's trying on a piece of clothing, and now I know what it looks like without even having to go to the store or I look at a car in my driveway without having to actually go buy it first. When you can see it in your life, you're already kind of over that first barrier of this is now part of me. And so that's a big, big advantage for AR. The appless AR component launches next week. No one has ever been able to do it until we came along here. And this is a really big deal. So we're excited to see what that does when it becomes appless.

Brian: [00:31:43] Right. Appless. Now you're talking about 30% lift when it's being interacted with. And right now you're having to use an app to do that. So all of a sudden, all that friction is just gone. Maybe it will even improve conversion rates more. Or I guess potentially. Or I guess it just makes it broader and makes it a lot broader and a lot more usable.

Jon: [00:32:03] One point on that, the average... So when you look at like a brand's audience, where are they interacting with them? Where are they shopping? Are they doing it on the desktop or are they doing it on the app? Whatever. Most brands don't even hit 10% traffic on their app. Ninety percent plus is happening outside of their app. And so you have this 30% lift for like IKEA and Wayfair and SDM and all these great brands are using to explore AR, but they're only hitting a small piece. Once it's on the Web site, now everybody can hit it.

Brian: [00:32:37] That's awesome. Well, I'm really excited about the the future AR. We've been bullish on it ever since Pokémon Go. And so I'm really excited to see this being used in everyday life. Thank you so much for talking about your product and then the future AR.

Jon: [00:32:51] Thanks so much, Brian.

Brian: [00:33:01] We're live again on the Shop.org Innovation Lab floor. Brian Lange with Future Commerce. I've got a familiar face here in the house with me, Ryan MacInnis from Voysis.

Ryan: [00:33:13] What's going on, Brian?

Brian: [00:33:14] Oh, you know, just here at Shop.org. Checking out the Innovation Lab. Let's get a hot take from you. What do you think of Shop.org this year? What do you think of this Innovation Lab. Give me the lay of the land.

Ryan: [00:33:26] Sure. I think it is a lot better than last year. I think they did a really good job of making sure that the Innovation Lab was filled with a lot of experiential technologies. So a lot of body scanning technologies. AR. VR. Not only for apparel, but for furniture and other kinds of things that you might walk into as an experience. So it's getting people to really question what their user base might want in an experience as opposed to being like we need to focus on personalization. Here's how we're going to deliver it. It gets really... It gets people to think about even from voice, from that perspective, people are saying our user base is over 50 years old. They're men. How might they interact with something like this on desktop where primarily that traffic is coming from? So I think it's a good kind of look in the mirror of people and what their roadmap should be based on their customers today.

Brian: [00:34:12] I love that. Yeah, I think anyone that's listening to this episode will... Well, I'll put you last because you're reflecting exactly what I captured in the clips that I've taken on the floor here, because it's just like all body data and AR and some personalization, and some other stuff. But yeah, it's a reflection of like what we've been talking about on the podcast the past two years. So it's pretty interesting, pretty exciting to see some of these trends kind of come into their own and start to pick up more steam. And yeah, I would agree with you, like that's where it's at.

Ryan: [00:34:47] And you made a comment earlier. Obviously, a lot of the people that are exhibiting in the Innovation Lab aren't necessarily showing anything new that you haven't heard about before. I think it's more of a timing question with a lot of these retailers. And I think that this year between Shoptalk and Shop.org I would argue is probably the two of the more successful conferences. I just think that there are a lot more ready to be having these conversations, not that the technology is advancing in such a way that we've never seen it before. It's like buying products through video or something that like people can actually envision doing now.

Brian: [00:35:17] Yeah, I totally agree with you. It's like there was a big hype wave, you know, a couple of years ago kind of when we started the podcast and like that, you know, that's usually the two steps forward, one step back, two steps forward that sort of thing. And I think we saw that step back maybe for a minute there. And now we're seeing the steps forward again where we're actually seeing products that make sense for retailers to actually purchase and implement. And the implementation side is getting easier and like, yeah, we're finally starting to see a little bit a maturity around some of these technologies.

Ryan: [00:35:49] So my last hot take is a mere prediction. And I think that a lot of eCommerce is moving forward and hopefully we'll take this data around the value that people are finding in the Innovation Labs and saying we've seen a lot of these vendors and typically we go really hot on these vendors and we say we're gonna sell sponsorships to vendors. Then we realize we have so many vendors that we need to get this huge space. And then, of course, we did have a ratio of retailers to vendors. So then you've got all these retailers and they realize that they've interacted with a lot of these vendors before. And there's really not a ton of stuff that's new. But I think you're gonna start to see the Innovation Lab kind of grow a lot more and be new every single year and the space actually of the show gets smaller. So people feel that it's less about breadth and more depth.  

Brian: [00:36:27] Oh I like that. It's a great hot take. Thanks, Ryan.

Ryan: [00:36:31] You're welcome. Yeah.

Brian: [00:36:31] All right. That's it for today.

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