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Overview of The Virtual Dressing Room Market - Augmented World Expo

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This is Zugara's presentation on the Virtual Dressing Room Market at the Augmented World Expo. Presentation covers brief overview on Zugara, 3 Signs that Virtual Dressing Rooms have arrived, and 3 …

This is Zugara's presentation on the Virtual Dressing Room Market at the Augmented World Expo. Presentation covers brief overview on Zugara, 3 Signs that Virtual Dressing Rooms have arrived, and 3 Challenges ahead for Virtual Dressing Rooms.

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  • Hi, I’m Matt Szymczyk (Sim-check), CEO of Zugara. Today I’ll be talking about Augmented Reality as it pertains to Virtual Dressing Rooms. There’s been some great progress in this space but there are also a few challenges ahead…
  • As for Zugara, we develop the Webcam Social Shopper Virtual Dressing Room Platform that allows users to view virtual items and accessories on themselves via a webcam. Our mission is simple. To provide retailers with a tool to increase conversions and to bring joy to shoppers worldwide. And these are a few of our launches in Malaysia, Denmark, US and so on.
  • As for our software, we’ve been in market since 2009 and this year especially, we’ve started to see accelerated adoption of our software. The reason’s are simple.. For over 5 years we’ve focused on our platform and focused on key areas that have helped make our solution the industry standard for ecommerce. Whereas in 2009 – 2011, most conversation with retailers were about using our software as a promotional tool, now the discussions involve how the software can be integrated as a conversion tool on their site. We’re seeing more enterprise level adoption of our software and our software is now compatible with every major commerce platform including PrestaShop, Shopify, Magento, Volusion, ATG and so on. Our next prominent software launch will be announced in mid-June and is with a $15bil company in the Indian market. We now have a global distribution network for our software with recent resellers signed in the Indian, Chinese, South African and Australian markets. This has helped give us a footprint on every major region in the world. Finally, on the product front, our software has mainly been utilized for web-based commerce to date though we have just finished a tablet version of our software and are also launching 2 different 3D camera based solutions for in-store use.
  • We have a growing patent portfolio and had some exciting news happen late last year. Zugara was granted what’s being called, The Virtual Dressing Room Patent, and our patent is key to systems and methods for how you would view and interact with 3D apparel and accessories through a video feed. This video feed can be through a webcam, through a Kinect on a kiosk, a mobile device or even Google Glasses. Our patent also covers 3D items and how they would size and fit to the user. A social shopping component for sharing looks on social networks or connecting the AR video feed with another user for real-time shopping. Gesture, motion and voice control are also part of our patent. Our patent has already been licensed with a major brand that had implemented a Kinect, based 3D virtual dressing room simulation.
  • Last year when I had a chance to speak, I had gone over the Barbie Fashion week event where our software was used. This year I wanted to show some photos from users of our software for the Barbie site. The campaign ran all of last year and we had over 5,000 photos submitted to the gallery. These are just a few of the actual photos generated from our software and uploaded by Barbie visitors…
  • And as always, I wanted to share some recent usage data with our software. LazyLazy deployed our software in early 2012 and immediately saw a conversion rate of two to three times that of regular shoppers. For Barbie, we had some amazing metrics including 1/3 of site visitors clicking on the software, people returning to use the software 2-3 times, almost 9 minutes spent interacting with the software per session and 6 pictures taken on average. As for our software deployed across all retailers using WSS..aggregate data shows over 250k+ photos taken as of Q1 2013 and we saw a massive increase in usage from Q1 2012 @ 2800 to 12.5K sessions in Q1 2013. So enough about us, and let’s look at the Virtual Dressing Room segment…
  • As I mentioned previously, it has not only been a great last 2 years for adoption of our software, but the Virtual Dressing Room space in general has been heating up. Here are 3 signs that Virtual Dressing Rooms have finally arrived.
  • Major Growth has occurred in both the web and in-store retail space.
  • Especially in the in-store, at retail segment, there were quite a few VDR deployments over the last year. From brands such as Bloomingdales to Marshall’s to Uniqlo, different variations of VDR’s were used.
  • Most deployments were using 2D or 3D cameras for tracking and visualization of the virtual garment on the person. While others were using 3D cameras as scanning devices to map the body. This bodymap data was then used to recommend brands sizes that would fit that specific customer. Some more advanced systems are currently using cameras for feature and facial detection to act as a recommendation platform for the user.
  • On the web, virtual try-on through webcam has also seen adoption. Various webcam based alternatives include use of a 2D camera to ‘detect’ size and visualize on an avatar Other methods include manual size Input – all take multiple steps to input different size metrics to determine a probability of fit. No technology is perfect; some solve fit; some solve style/design problem; AR has potential to solve both.
  • For now, PC commerce still rules. Though tablet usage is growing, most commerce is still being dominated by desktop/laptop. This Shopzilla ecommerce trend tracker report from May 2013 show 85% of purchases are still made from a desktop or laptop. However, one key stat is purchases from iPad are growing especially with Household Incomes of 150K or more. What has stayed very consistent over the last year, is that people are rarely using their smartphone to make purchases.
  • Brands and retailers are starting to look at AR as a longer term solution.
  • This example from Unqilo shows how the ‘magic mirror’ was actually designed into the storefront itself. We’ve actually had conversations with other retailers that are looking to make VDR’s a permanent fixture in their retail storefront. This is a great sign for both AR & VDR’s.
  • In-store likely to see further acceleration to regain foot traffic; online/mobile cannabilizing sales; conversion rate still significantly higher in-store Omni-channel view of retailers. Cross platform solutions that integrate with all aspects of a retailer’s channel will be critical for further adoption.
  • On the web side, we are also seeing extensive planning from retailers for virtual dressing room and/or fit technologies. This is an example of Lookz, a Russian retailer, that had discussed with us for awhile about integrating our software into the launch of their site. They’ve continually been adding garments to the site for the Webcam Social Shopper with over 500 SKU’s now integrated with our software. The most important feature? The integration of a dynamic WSS link that allows shoppers to either launch the software from a product detail page (bottom arrow) that are then automatically added to a VDR area up top for activation at any time. This matches up with how online shoppers use wishlists and shopping carts to evaluate pending purchases…
  • I know this isn’t very exciting for the AR crowd, but for the ecommerce side of things, our first ecommerce platform module was a huge step forward for both industries. Our software is now available on the PrestaShop ecommerce platform which has over 135,000 retailers using it. Retailers using this platform can now add our software with 3 clicks. This has made AR & VDR’s more accessible to every retailer worldwide..
  • As better technology arrives on the scene, we will start seeing a greater proliferation of VDR simulations…
  • - Leap – Bringing better gestural tracking to PC segment; Best Buy distribution; Major PC integration Kinect – New Kinect using superior TOF tech; 1080p resolution; Better tracking capablities Natural User Interface adoption will hit mainstream; will assist with AR growth
  • Though VDR adoption is accelerating, there are still some challenges ahead for the industry…
  • The biggest barrier with AR and especially VDR’s. 3D costs are just not accessible to 99% of retailers out there and are not scalable. Also, building a pilot to show a 3D item is also not a scalable business or revenue model. The more industry players absorb the cost of 3D asset production for retailers, the more the retailers will expect not to pay that cost in the future. This is not a sustainable business model…
  • I think we’ve all seen that AR is a great tool for engagement. However, for VDR’s engagement is not enough. In commerce, conversions are key, and until any VDR solution can show sustainable conversion data, retailers will continue to view these solutions as engagement tools. Retailers will simply not divert the investment this industry needs for engagement type technology…
  • This is probably the one area we are most passionate about. At least I am. As an industry, we keep shooting ourselves in the foot by showing the promise of the future that the technology can simply not deliver in the near term. Google Glasses concept video vs. the actual developer product is a great example of this. More close to home, in the VDR space, the more companies keep using Virtual “fitting’ Room to describe their solutions that don’t solve fit, the more harm this will do on both the retailer and consumer side. This image shows what the Kinect actually sees – if you think this helps solve fit for a consumer, then I have a bridge in Brooklyn I’d like to talk to you about after the session…
  • In Closing – From 1999 – 2009, my job was basically to evaluate and recommend new technologies for Fortune 500 brands. During these years it was a lot easier for brands to pilot and invest in technologies that did not have quantifiable return on investment. There was more time to evaluate, tweak, and ultimate appetite for risk. This is a new era though and until the global economy fully heals, companies will not have much patience with technologies such as AR. It is imperative that the industry as a whole focuses on: 1. How present day AR technology can be of value to a brand or retailer 2. Stop promising things that the technology can simply not deliver 3. Focus on getting as much data as possible out there This is a great industry to be a part of but we need to do a better job of both inward and outward communication or we’ll quickly end up where Virtual Reality did.
  • Transcript

    • 1. AR Retail – 2013Augmented World ExpoConfidential – Please do not distribute
    • 2. Bringing Joy To Shoppers WorldwideBringing Joy To Shoppers WorldwideBringing Joy To Shoppers WorldwideBringing Joy To Shoppers WorldwideConfidential – Please do not distribute
    • 3. Leading Virtual Dressing Room PlatformLeading Virtual Dressing Room PlatformLeading Virtual Dressing Room PlatformLeading Virtual Dressing Room PlatformConfidential – Please do not distribute• Product Maturation• Enterprise Adoption• Global DistributionNetwork• Product Development• Product Maturation• Enterprise Adoption• Global DistributionNetwork• Product Development
    • 4. Key AR & Virtual Dressing Room PatentKey AR & Virtual Dressing Room PatentKey AR & Virtual Dressing Room PatentKey AR & Virtual Dressing Room PatentConfidential – Please do not distribute“Providing a simulation of wearingitems such as garments and/oraccessories.”• Simulation through a video feed• Sizing and fit• All wearable items• Social shopping–Video Chat• Gesture, motion and voice control• Purchasing module- Additional Patents Pending –
    • 5. Actual User Photos From Our SoftwareActual User Photos From Our SoftwareActual User Photos From Our SoftwareActual User Photos From Our SoftwareImages Are Property of Mattel - Confidential – Please do not distribute
    • 6. Usage DataUsage DataUsage DataUsage DataConfidential – Please do not distribute2x – 3x Conversion Rate33% Of Site Visits Resulted In A Click6 Pictures Taken On Average8:48 Avg Time Spent Per WSS Session2.56 Sessions Per WSS User250K+ Photos total as of Q1 20132,813 Total # Of Sessions Q1 201212,561 Total # Of Sessions Q1 2013
    • 7. 3 Signs Virtual Dressing Rooms HaveArrivedConfidential – Please do not distribute
    • 8. # 1 In-Store Retail & Web-Based Solutions SawMajor Growth 2012 - 2013Confidential – Please do not distribute3 Signs Virtual Dressing Rooms HaveArrived
    • 9. Retail Adoption AcceleratingRetail Adoption AcceleratingRetail Adoption AcceleratingRetail Adoption AcceleratingConfidential – Please do not distributeMicrosoft/Bloomingdales Cisco/John Lewis Marc Jacobs MarshallsLG Uniqlo Tag Heuer TescoOver 50 Brand & Retail Deployments Across In-Store & Web; Majority AR Related
    • 10. In-Store Methods & SystemsIn-Store Methods & SystemsIn-Store Methods & SystemsIn-Store Methods & SystemsConfidential – Please do not distribute2D/3D CamerasVirtual Try-On - SelfAvatar Control3D CamerasBodymapping3D Camera(s)Feature & FacialDetection/Recommendation
    • 11. Web Methods & SystemsWeb Methods & SystemsWeb Methods & SystemsWeb Methods & SystemsConfidential – Please do not distribute2D CamerasVirtual Try-On - SelfAvatar ControlManual Size InputAlgorithm DrivenRobotic BodyAvatar Overlay
    • 12. For Commerce, PC Rules; Tablet GrowingFor Commerce, PC Rules; Tablet GrowingFor Commerce, PC Rules; Tablet GrowingFor Commerce, PC Rules; Tablet GrowingConfidential – Please do not distribute
    • 13. #2 Brands / Retailers Planning Longer Term ForARConfidential – Please do not distribute3 Signs Virtual Dressing Rooms HaveArrived#1 In-Store Retail & Web-Based Solutions SawMost Growth 2012 - 2013
    • 14. In-Store Planning / DesignIn-Store Planning / DesignIn-Store Planning / DesignIn-Store Planning / DesignConfidential – Please do not distributeMagic Mirrors Integrated Into Store
    • 15. In-Store Planning / DesignIn-Store Planning / DesignIn-Store Planning / DesignIn-Store Planning / DesignConfidential – Please do not distributeOffline Conversion Higher Than Online
    • 16. Online Retail Integration / PlanningOnline Retail Integration / PlanningOnline Retail Integration / PlanningOnline Retail Integration / PlanningConfidential – Please do not distribute• Lookz –Russian BasedRetailer• 50 SKULaunch; 500SKU Today• DynamicIntegration• Lookz –Russian BasedRetailer• 50 SKULaunch; 500SKU Today• DynamicIntegration
    • 17. Ecommerce Platform IntegrationEcommerce Platform IntegrationEcommerce Platform IntegrationEcommerce Platform IntegrationConfidential – Please do not distribute• PrestaShopEcommercePlatform• Over 135,000RetailersWorldwide• WSS Module –3 ClickIntegration• PrestaShopEcommercePlatform• Over 135,000RetailersWorldwide• WSS Module –3 ClickIntegration
    • 18. #2 Brands / Retailers Planning Longer Term ForARConfidential – Please do not distribute3 Signs Virtual Dressing Rooms HaveArrived#1 In-Store Retail & Web-Based Solutions SawMost Growth 2012 - 2013#3 More Advanced Technology Finally Here
    • 19. More Advanced Input DevicesMore Advanced Input DevicesMore Advanced Input DevicesMore Advanced Input DevicesConfidential – Please do not distribute
    • 20. Confidential – Please do not distribute3 Challenges Ahead For VirtualDressing Rooms
    • 21. 3D Still #1Barrier To Entry For Retailers3D Still #1Barrier To Entry For Retailers3D Still #1Barrier To Entry For Retailers3D Still #1Barrier To Entry For RetailersConfidential – Please do not distribute3D Asset Creation Cost Prohibitive; AdditionalCosts To Retail Photography Budgets
    • 22. AR – Engagement or Conversion Tool?AR – Engagement or Conversion Tool?AR – Engagement or Conversion Tool?AR – Engagement or Conversion Tool?Confidential – Please do not distributeIn Commerce, Engagement Must Lead ToConversion
    • 23. Control The Message To Control The HypeControl The Message To Control The HypeControl The Message To Control The HypeControl The Message To Control The HypeConfidential – Please do not distributeVirtual “Fitting” Room
    • 24. In Closing…Confidential – Please do not distribute
    • 25. Appetite For Risk Lowest Since 2007Appetite For Risk Lowest Since 2007Appetite For Risk Lowest Since 2007Appetite For Risk Lowest Since 2007Confidential – Please do not distribute
    • 26. Thank You!Matthew SzymczykFounder & CEOmatt@zugara.comTwitter.com/kobrakaiJack BenoffVP of Product & Marketingjack@zugara.comTwitter.com/jack_benoffCorporate Site: www.zugara.comSelected Press Coverage: http://pinterest.com/Zugara/zugara-coverage/Product Site: www.webcamsocialshopper.comDEMO Presentation: http://www.youtube.com/watch?v=hJlRaSzg-FIBlog: www.weareorganizedchaos.comFacebook Page: www.facebook.com/augmentedrealityAlex GoldbergCTOalex@zugara.comConfidential – Please do not distribute

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