That’s the reasoning behind a bold move by Williams-Sonoma with its announcement of a $112 million acquisition of augmented reality and 3D imaging startup Outward. The intention is to create digital and virtual reality rooms in which customers will be able to see potential purchases in situ.
It’s the latest iteration of an increasing level of digital investment by the home furnishing chain, which owns Pottery Barn. E-commerce revenues now account for 53% of total turnover, justifying additional spend, argues Laura Alber, CEO Wiliams-Sonoma:
Our investments in digital innovation and cross-brand services as well as continued optimization of our supply chain position us to further differentiate our business and to deliver long-term gains in market share and profitable growth.
Of Outward, she adds:
Digital leadership remains one of our most important priorities, as we firmly believe technology enhances the customer experience…Together with the Outward team, we will drive further digital innovation to create highly engaging experiences that will revolutionize the industry. We believe the quality and scalability of Outward's 3D models are unparalleled, and that we'll be able to transform the way people shop for home furnishings across the industry and in our brands.
We'll also drive efficiencies and cost savings in the way that we capture and create 3D models and utilize them in a more extensive and seamless way across various digital channels. One such application is the augmented reality room planning tool that we'll be launching on the Apple iOS.
The Pottery Barn 3D Room View app offers an intuitive user interface experience, and is the only AR technology on the market that offers clear the room functionality using advanced techniques to dynamically clear the existing contents of your room. The Pottery Barn 3D Room View will also become a critical tool for our Design Crew, an exciting addition to our growing set of custom digital and retail services such as the West Elm Pinterest Style Finder tool.
Sameer Hassan, SVP of Digital Technology, adds that the Outward acquisition will impact right across the entire Williams-Sonoma digital experience:
3D imaging is going to significantly transform the way that people shop, especially in the home space. And this is an area where we want to be a leader. We've explored partnerships with a number of different companies in the 3D space over the last few years and we believe Outward is the best. At the heart of their platform is the encoding of a physical product in 3D in a way that isn't purpose-built for a specific use case, but can be leveraged for any number of different use cases, and it's truly different than any other application of 3D that we've seen. It's built for the long-term and it's in a space that's changing rapidly. We believe that this focus on future proofing will serve us well, and the quality of their 3D model is unparalleled.
What’s key to any digital investment is that it enahnces the customer experience of engaging with the retailer, says Alber:
For more than 60 years, we've been leaders in customer experience which began in our first Williams-Sonoma store with our founder, Chuck Williams, who served every customer with passion and care. And since then his attention to the customer has become deeply embedded in our culture and a part of who we are today, a multichannel, multi-brand retailer that continues to deliver superior customer service and high-quality differentiated products.
Our high touch customer service platform is comprised of several key components. We have a multi-channel model with an experiential retail base that gives our customers the ability to touch and see our products, together with the convenience of our established content-rich e-commerce presence… Our internally-designed and developed e-commerce platform gives us a distinct advantage to react quickly to changing customer behaviors and deliver impactful digital improvements with a fast time-to-market.
Personalization is a particular focus for the firm, driven by its accumulation of data about its customer base. Alber explains:
We have a comprehensive database of approximately 60 million households across our brands, which enables us to deliver personalized relevant messaging to our customers….We also partnered with Facebook on their launch of Collection ads which brings to life our catalog on social media. Meanwhile, our content-rich personalized email campaigns continue to drive improvement in customer engagement metrics and overall sales
Our loyalty program, The Key, has been met with great success, growing nearly 20% a month since it launched one year ago. We're tracking new customers and motivating Key Holders to shop more often, spend more per transaction and purchase from more brands across the portfolio as they enjoy the benefits and rewards.
We'll continue to expand upon The Key program with improved technology and differentiated experiences and services that link our family of brands together. Additionally, our credit card programs attract many of our most valuable customers, offering benefits and rewards that deepen loyalty and drive incremental revenue.
What’s particularly important of course is that all the various digital investments come together as a unified whole. This is increasingly seen as a priority, says Alber:
Whereas in the past we thought about our brands in silos, we see significant opportunity by thinking about our multi-brand platform differently. By leveraging our shared household files, we are able to identify cross-brand reference points to better service our customers across life stages, increasing relevance and loyalty.
For example, when a customer registers at Pottery Barn Kids they might purchase a West Elm baby glider. And if a customer looks for a coffee table on one of our brands' websites and doesn't purchase it, we can show them alternative coffee tables from other brands.
Also, for a better cross-brand shopping experience, we built a single sign on feature that our customers can log into any of our brand websites with a single login and password.
Pottery Barn is a good use case, she adds:
Our multi-channel model continues to be an advantage, and we are improving the shopping experience in-store and online. In e-commerce, we are focused on creating a best-in-class experience that is inspirational, engaging and friction free. We're adding content and inspiration to our website and in our marketing messages and our new tools such as our 3D product visualization and the soon-to-be launched 3D Room View app are designed to make home furnishing shopping easier. Our investment in digital marketing programs is driving traffic and sales, and we are increasing the amount of personalized messaging to increase relevance, and we are seeing favorable metrics with triggered e-mails and personalized content.
And of course the physical stores are also an integrated part of the mix, says Alber:
In retail, we are focused on creating an engaging customer experience in our Pottery Barn stores with superior customer service and our team of highly-trained Design Crew experts to help our customers with their personalized decorating and shopping needs…Our retail stores are key competitive advantage for the Pottery Barn brand. They are number one customer-acquisition vehicle, driving traffic to our stores and online, and remain a highly-profitable part of our Pottery Barn business.
A prime example of a retailer looking to re-invent its operating model through innovative exploitation of bleeding edge technology, as well ‘standard’ e-commerce offerings.