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The Future Of Online Shopping

“The Webcam Social Shopper” (WSS)
               Matthew Szymczyk
                  Founder & CEO
                matt@zugara.com
               Twitter.com/kobrakai
           LinkedIn.com/in/mhszymczyk
                  310. 344.8224




                                        Confidential – Please do not distribute
Our Story


 We’re founded as an               In the midst of the recession        Fresh off a DEMOgod win,
 Interactive Marketing             we build an ecommerce                the Webcam Social
 Agency focused on branded         augmented reality (AR)               Shopper is built into a
 web development. Sony             prototype, The Webcam                market ready product. On
 PlayStation enables our           Social Shopper. Several              July 20th 2011 it goes live
 founding by putting us on         months later Tobi.com uses           throughout Banana
 retainer from day one.            it for a campaign.                   Flame’s site.


                           2007                               2010




2001                              2009                               2011

  Primarily creating strategic,      We are named to Ad Age’s
 UX focused web applications            Creativity 50 list for our
 we are nearly 40 employees          work with AR. We refocus
and doing $5 mil in revenues.          the business on creating
  Key clients include Reebok,             AR software that will
Lexus, PlayStation, Activision,     revolutionize shopping. We
 & Toyota. Image above is of                 officially become a
    official “Build Your Lexus”         “bootstrapped startup”.
   application on Lexus.com.
                                                                     Confidential – Please do not distribute
The Problem: The Online Shopping “Experience” Doesn’t Exist




 • Conversion Rate: 20 – 40 %              • Conversion Rate: 2 – 3%
                                           • Return Rate: 25 - 40%


 An improvement in conversion from 2% to 2.1% would
            equate to a 5% lift in sales.
                                                              Confidential – Please do not distribute
The Solution: Replicate The In Store “At The Rack” Shopping Experience, Online.
Live Demo – www.webcamsocialshopper.com




 PATENT PENDING
               Represented by Pillsbury
         Provisional Application Filed in 2009
                  Patent Filed 2010
                                                                 Confidential – Please do not distribute
Candid Reactions To WSS




 KEY FINDING:
 • Nearly 2/3rds of participants said that WSS would help them in making a purchase decision.

 SOME ADDITIONAL FINDINGS:
 • Over 83% of users answered between “Interested” and “Very Interested” when asked the
   question: “if an online store had this product, how interested would you be in using it?”
 • 88% of users answered between “Interested” and “Very Interested” when asked the question:
   “How interested do you think your friends would be in using it?”
 • When the users first viewed WSS “the typical initial reaction was a surprised exclamation.”
 • It took first time users about two minutes to understand, and become comfortable with the
   motion capture interface.


                                                                              Confidential – Please do not distribute
We’re Gaining Traction Globally
Over 500 Inbound Inquiries In Our Pipeline – 21 Advanced Prospects
Key: Clients (C) & Partners (P)




                         NORTH AMERICA                                                     EUROPE
                                  Tobi.com (C)                                             La Mania (C)
                                   Reebok (C)                                            Banana Flame (C)
                               National Guard (C)                                         Bealamode (C)
                               Rich Relevance (P)                                         Sinet Italia (P)
                                    -----------                                             Omeco (P)
                                 8 Prospects (C)                                          Uncubator (P)
                                                                                             -----------
                                                                                          6 Prospects (C)
                                                                                          1 Prospect (P)

                                                            ASIA
                                                       1 Prospect (C)

SOUTH AMERICA
        4 Prospects (C)                                                 AUSTRALIA
        1 Prospect (P)                                                   City Chic (C)



                                                                                              Confidential – Please do not distribute
On July 20th We Launched On Banana Flame
www.bananaflame.com




                                                          Client Testimonial
                                           “As an online retailer, it’s critical to our
                                           business that we create the best and most
                                           enjoyable shopping experiences available to
                                           customers, so that when they do choose to
                                           shop online, they do it with us. And that’s
                                           what the Webcam Social Shopper gives us, a
                                           brand building and personal shopping
                                           experience tailored to each individual that
                                           they will not only love but also return to time
                                           and time again.”
                                                           - Emily Walker, Creative Director




                                                                      Confidential – Please do not distribute
A History Of Innovation




                          First Product To Market; Patent Pending

                          First E-commerce Motion Capture UI

                          First Flash Solution

                          First To Integrate Photo/Sharing Features

                          First Truly Markerless Solution

                          First Video Conferencing AR Shopping Prototype

                          First To Have No Backend Integration

                          First To Integrate Throughout Client’s Site



                                                        Confidential – Please do not distribute
Two Software Products Currently Being Sold




                                             Confidential – Please do not distribute
New Features & Site Improvements Market
Online Apparel Retailers, U.S. Market Only


                                                      SOURCE: eMarketer & SORO Report 2007, Forrester Research & Shop.org

                $1.20
                                                                                              $1. 14 Bil
                $1.10
                                                                  $1.04 Bil
     Billions




                $1.00
                                             $940 Mil
                $0.90   $860 Mil

                $0.80
                            2011               2012                    2013                          2014



    76% of people who shop online more than once a month say advanced product
    viewing features are “extremely” or “very” important in their decision to stay
    and purchase from a site and return to the site to purchase again.
                                                                                            SOURCE: Limelight Networks


                                                                                              Confidential – Please do not distribute
What Do Analysts & Journalists Think Of WSS?



                “Apparel retailers worldwide can benefit from this kind of tool, which could appeal to younger
                shoppers in particular.”


                “The idea has great potential and could benefit up and coming brands and retailers, big and
                small.”

                “Though hundreds or thousands of Augmented Reality products hit the market last year and a
                handful have been widely seen - many people still doubt the utility of this technology. Zugara's
                approach seems to be one of the most clearly useful.”


                “We mentioned Zugara's neat augmented reality clothes shopping experiment before--noting
                how cool it could make online shopping by letting you try out virtual clothes. Well, it's an
                experiment no more: Online fashion store Tobi has launched it for real.”


                “What cannot be ignored is that shopping with this feature is very exciting, and will surely attract
                shoppers to your website.”


                Featured in the Gartner Group’s “Cool Vendors In Retail, 2010” Research Report.




                                                                                               Confidential – Please do not distribute
Thank You!
Please Note That This Is An Abridged Version Of Our Deck, And
    That Information We Deemed Too Sensitive Was Removed.
   Please Feel Free To Contact Us For The Un-Abridged Version.
             DEMO Presentation: http://www.youtube.com/watch?v=hJlRaSzg-FI
                         Blog: www.weareorganizedchaos.com
                 Facebook Page: www.facebook.com/augmentedreality


    Matthew Szymczyk                                                 Jack Benoff
       Founder & CEO                                      Vice President Product & Marketing
     matt@zugara.com                                               jack@zugara.com
    Twitter.com/kobrakai                                        Twitter.com/jack_benoff
LinkedIn.com/in/mhszymczyk                                    LinkedIn.com/in/jackbenoff

                                                                         Confidential – Please do not distribute
Appendix




           Confidential – Please do not distribute
Q: Why Aren’t We Focused On Mobile Today?



                                                 Less Reach
                          • *75% of “Digital Natives” Don’t Use Smartphones
                         • Only 7% of web traffic comes from Phones/Tablets
                                  • Handsets With Forward Facing Cameras?

                                 Poor Usability/Experience
                                                        • What’s The Consumer Benefit?
                                                                      • GPS Inaccuracy
                                                         • Not Enough Processing Power

                               Fragmented Mobile Market
                            • Several Operating Systems With Significant Share
                                                       • Numerous Handsets

                       * Source: CNN.com & Forrester Research (9/30/2010)
                                                                            Confidential – Please do not distribute
Q: What Are Webcam Adoption Rates?



      79% of laptops now have webcams. Source: PC World
                      More than 70 % of laptops now have webcams
                                                                                          Source: PC World
      72% of 18 – 29 year olds own a laptop. Source: Pew Internet & American Life Project

      83% of college students own a laptop. Source: Student Monitor
      More than 50% of Gen Y owns a webcam. Source: Cisco a laptop
                  72% of 18 – 29 year olds own
                                                                        Source: Pew Internet & American Life Project
      As of July 2011, 50% Of Skype minutes involve video. Source: Skype


                         Given the technology adoption trends seen across generation,
                         it is safe to assume that Gen Z will have higher Webcam

                         adoption than any generation prior.




                                                                                     Confidential – Please do not distribute
A Digital Experience For A Digital Generation




                                                (SOURCES: Twitter & TechCrunch Commenter)
       © COPYRIGHT 2010 ZUGARA | CONFIDENTIAL                        AUGMENTED REALITY      16

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Angel.co

  • 1. The Future Of Online Shopping “The Webcam Social Shopper” (WSS) Matthew Szymczyk Founder & CEO matt@zugara.com Twitter.com/kobrakai LinkedIn.com/in/mhszymczyk 310. 344.8224 Confidential – Please do not distribute
  • 2. Our Story We’re founded as an In the midst of the recession Fresh off a DEMOgod win, Interactive Marketing we build an ecommerce the Webcam Social Agency focused on branded augmented reality (AR) Shopper is built into a web development. Sony prototype, The Webcam market ready product. On PlayStation enables our Social Shopper. Several July 20th 2011 it goes live founding by putting us on months later Tobi.com uses throughout Banana retainer from day one. it for a campaign. Flame’s site. 2007 2010 2001 2009 2011 Primarily creating strategic, We are named to Ad Age’s UX focused web applications Creativity 50 list for our we are nearly 40 employees work with AR. We refocus and doing $5 mil in revenues. the business on creating Key clients include Reebok, AR software that will Lexus, PlayStation, Activision, revolutionize shopping. We & Toyota. Image above is of officially become a official “Build Your Lexus” “bootstrapped startup”. application on Lexus.com. Confidential – Please do not distribute
  • 3. The Problem: The Online Shopping “Experience” Doesn’t Exist • Conversion Rate: 20 – 40 % • Conversion Rate: 2 – 3% • Return Rate: 25 - 40% An improvement in conversion from 2% to 2.1% would equate to a 5% lift in sales. Confidential – Please do not distribute
  • 4. The Solution: Replicate The In Store “At The Rack” Shopping Experience, Online. Live Demo – www.webcamsocialshopper.com PATENT PENDING Represented by Pillsbury Provisional Application Filed in 2009 Patent Filed 2010 Confidential – Please do not distribute
  • 5. Candid Reactions To WSS KEY FINDING: • Nearly 2/3rds of participants said that WSS would help them in making a purchase decision. SOME ADDITIONAL FINDINGS: • Over 83% of users answered between “Interested” and “Very Interested” when asked the question: “if an online store had this product, how interested would you be in using it?” • 88% of users answered between “Interested” and “Very Interested” when asked the question: “How interested do you think your friends would be in using it?” • When the users first viewed WSS “the typical initial reaction was a surprised exclamation.” • It took first time users about two minutes to understand, and become comfortable with the motion capture interface. Confidential – Please do not distribute
  • 6. We’re Gaining Traction Globally Over 500 Inbound Inquiries In Our Pipeline – 21 Advanced Prospects Key: Clients (C) & Partners (P) NORTH AMERICA EUROPE Tobi.com (C) La Mania (C) Reebok (C) Banana Flame (C) National Guard (C) Bealamode (C) Rich Relevance (P) Sinet Italia (P) ----------- Omeco (P) 8 Prospects (C) Uncubator (P) ----------- 6 Prospects (C) 1 Prospect (P) ASIA 1 Prospect (C) SOUTH AMERICA 4 Prospects (C) AUSTRALIA 1 Prospect (P) City Chic (C) Confidential – Please do not distribute
  • 7. On July 20th We Launched On Banana Flame www.bananaflame.com Client Testimonial “As an online retailer, it’s critical to our business that we create the best and most enjoyable shopping experiences available to customers, so that when they do choose to shop online, they do it with us. And that’s what the Webcam Social Shopper gives us, a brand building and personal shopping experience tailored to each individual that they will not only love but also return to time and time again.” - Emily Walker, Creative Director Confidential – Please do not distribute
  • 8. A History Of Innovation First Product To Market; Patent Pending First E-commerce Motion Capture UI First Flash Solution First To Integrate Photo/Sharing Features First Truly Markerless Solution First Video Conferencing AR Shopping Prototype First To Have No Backend Integration First To Integrate Throughout Client’s Site Confidential – Please do not distribute
  • 9. Two Software Products Currently Being Sold Confidential – Please do not distribute
  • 10. New Features & Site Improvements Market Online Apparel Retailers, U.S. Market Only SOURCE: eMarketer & SORO Report 2007, Forrester Research & Shop.org $1.20 $1. 14 Bil $1.10 $1.04 Bil Billions $1.00 $940 Mil $0.90 $860 Mil $0.80 2011 2012 2013 2014 76% of people who shop online more than once a month say advanced product viewing features are “extremely” or “very” important in their decision to stay and purchase from a site and return to the site to purchase again. SOURCE: Limelight Networks Confidential – Please do not distribute
  • 11. What Do Analysts & Journalists Think Of WSS? “Apparel retailers worldwide can benefit from this kind of tool, which could appeal to younger shoppers in particular.” “The idea has great potential and could benefit up and coming brands and retailers, big and small.” “Though hundreds or thousands of Augmented Reality products hit the market last year and a handful have been widely seen - many people still doubt the utility of this technology. Zugara's approach seems to be one of the most clearly useful.” “We mentioned Zugara's neat augmented reality clothes shopping experiment before--noting how cool it could make online shopping by letting you try out virtual clothes. Well, it's an experiment no more: Online fashion store Tobi has launched it for real.” “What cannot be ignored is that shopping with this feature is very exciting, and will surely attract shoppers to your website.” Featured in the Gartner Group’s “Cool Vendors In Retail, 2010” Research Report. Confidential – Please do not distribute
  • 12. Thank You! Please Note That This Is An Abridged Version Of Our Deck, And That Information We Deemed Too Sensitive Was Removed. Please Feel Free To Contact Us For The Un-Abridged Version. DEMO Presentation: http://www.youtube.com/watch?v=hJlRaSzg-FI Blog: www.weareorganizedchaos.com Facebook Page: www.facebook.com/augmentedreality Matthew Szymczyk Jack Benoff Founder & CEO Vice President Product & Marketing matt@zugara.com jack@zugara.com Twitter.com/kobrakai Twitter.com/jack_benoff LinkedIn.com/in/mhszymczyk LinkedIn.com/in/jackbenoff Confidential – Please do not distribute
  • 13. Appendix Confidential – Please do not distribute
  • 14. Q: Why Aren’t We Focused On Mobile Today? Less Reach • *75% of “Digital Natives” Don’t Use Smartphones • Only 7% of web traffic comes from Phones/Tablets • Handsets With Forward Facing Cameras? Poor Usability/Experience • What’s The Consumer Benefit? • GPS Inaccuracy • Not Enough Processing Power Fragmented Mobile Market • Several Operating Systems With Significant Share • Numerous Handsets * Source: CNN.com & Forrester Research (9/30/2010) Confidential – Please do not distribute
  • 15. Q: What Are Webcam Adoption Rates? 79% of laptops now have webcams. Source: PC World More than 70 % of laptops now have webcams Source: PC World 72% of 18 – 29 year olds own a laptop. Source: Pew Internet & American Life Project 83% of college students own a laptop. Source: Student Monitor More than 50% of Gen Y owns a webcam. Source: Cisco a laptop 72% of 18 – 29 year olds own Source: Pew Internet & American Life Project As of July 2011, 50% Of Skype minutes involve video. Source: Skype Given the technology adoption trends seen across generation, it is safe to assume that Gen Z will have higher Webcam adoption than any generation prior. Confidential – Please do not distribute
  • 16. A Digital Experience For A Digital Generation (SOURCES: Twitter & TechCrunch Commenter) © COPYRIGHT 2010 ZUGARA | CONFIDENTIAL AUGMENTED REALITY 16