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Augmented & Virtual Reality for Holiday Shopping 2018

This week, the Joes are joined by Holly Shively, a reporter covering retail and real estate for the Dayton Daily News. Holly recently published a story titled, “Short on time? Here’s how your holiday shopping experience will be different (and easier) this year,” and we pick her brain for details on how the shopping experience is being transformed by new technology including AR and VR.

FULL TRANSCRIPT OF SEASON 2: EPISODE 5

[music]

00:00 Joe Johnson: Welcome To the In Reality Podcast. Now starting, in three, two, one.

00:06 JJ: Welcome to the In Reality Podcast, where we cover all things augmented and virtual reality. The In Reality Podcast is hosted by Joe Bardi and Joe Johnson, and features news, commentary, and perspective from industry veterans and experts. First up, introductions. I’m Joe Johnson, Creative Director at Marxent Labs.

00:22 Joe Bardi: And I’m Joe Bardi, Director here at Marxent.

00:24 JJ: Are you the Creative Director of Marxent?

00:26 JB: I’m sorry, I said creative, didn’t I?

00:27 JJ: You did. First up, introductions. I’m Joe Johnson, Creative Director of Marxent Labs.

00:32 JB: And I’m Joe Bardi, the Communications Director here at Marxent.

00:34 JJ: We’ve had a little bit of a break since the last episode of In Reality, but we’re back for the first in a series of new podcast that will run through March, call it season two, part two, and we’ve got a good one to kick things off. Joining us today is business reporter, Holly Shively, who covers retail and real estate for the Dayton Daily News. Holly recently published a story titled, “Short on Time? Here’s How Your Holiday Shopping Experience Will Be Different And Easier This Year”. And we’re going to pick her brain about some interesting ways that shopping experience is being transformed by new technology, including AR and VR. You wanna get to it?

01:03 JB: Let’s do it.

01:04 JJ: Alright.

[music]

[vocalization]

01:11 JJ: So Holly, I pronounced your last name Shively in the intro. How did I do?

01:16 Holly Shively: That is perfect.

01:18 JJ: It’s Shively? Alright.

01:19 JB: Wow, you nailed it.

01:20 HS: Yep.

01:20 JJ: Nailed it.

01:20 JB: I have been wrong for two days. I kept saying, Shively, but…

01:24 HS: You know, a lot of people do that. It’s that E in there that gets you every time.

01:29 JB: Alright, so I’m starting? Okay.

01:30 JJ: Yeah, you’re intro-ing her, man.

01:31 JB: Okay, so… Alright, so joining us today, we have Holly Shively, who is a writer for the Dayton Daily News. Hi, Holly, how are you doing today?

01:39 HS: I’m doing well, how are you?

01:41 JB: I’m doing great. Why don’t you tell everybody sort of who you are and what you do?

01:46 HS: So I am a reporter, a business reporter, I cover retail and real estate for the Dayton Daily News in Ohio. So right now, what I basically work on is there’s a lot of technology changes in retail…

01:57 JB: So alright, so I’ll jump to this. So you wrote a story last week, it was titled, “Short on Time? Here’s How Your Holiday Shopping Experience Will Be Different And Easier This Year”. So tell us about that, tell us what was the genesis of that story and what did you find out?

02:11 HS: Right. So technology is really shaping and evolving the retail industry, and there’s a lot of different changes coming about as far as mobile payments this year are a big thing and different technology that companies are looking into for delivery to make it so with this increase in online shopping that’s happening, packages getting to where they need to be on time still. And a lot of that also comes down to augmented and virtual reality and how that is shaping the consumer shopping experience as… Consumers just really want convenience now. And so, virtual reality and other technologies, augmented reality, that has really helped make the shopping experience easier and faster.

02:53 JJ: So I imagine all of this is a response to Amazon, right?

02:56 HS: Yeah, and pretty much… We have one retail expert who likes to call it “Keeping Up With Amazon Syndrome”. And so it’s basically, Amazon has just completely revolutionized everything from retail to medical, to literally everything. [chuckle] And so…

03:11 JJ: Hang on, hang on. Back up a second, back up a second. Medical?

03:14 HS: Yeah, so they’ve actually, they started working with a prescription delivery company, so that they…

03:19 JJ: Is that right? I did not know that.

03:20 HS: Bought a prescription delivery company.

03:22 JB: Yes, that’s right. Yeah, they’re looking to disrupt possibly CVS and Walgreens.

03:25 HS: Yeah, they’re disrupting every industry. And they started offering mattresses, they started offering live Christmas trees, and they’re just completely changing how consumers are getting every single product that they buy.

03:36 JJ: Okay, so AR and VR and two-day delivery and stuff like that, these are retailers’ ways of fighting back or catching up, what are we talking about?

03:43 HS: Right. So it’s kind of both. They’re playing a game where they’re trying… They’re just taping Amazon. I call them Grocery Wars, I call them Toy Wars. It’s basically a war. They’re battling out to see who’s going to be the one that survives in the end, because as we move to more online retail, these stores have to figure out how to keep up with that Amazon experience.

04:05 JB: Let’s talk VR for a second, because one of the things I found really interesting about the story was, I think most people think of VR when it comes to retail in one specific way, which is sort of like in-store visualization, which we love, and we’re obviously familiar with, but you also talked about how other ways that businesses are using VR, I think primarily for training. So who’s doing that and talk a little bit about that.

04:27 HS: Right. So, I actually just recently visited a Walmart training academy that we have here in Ohio. There’s actually 198 of them nationwide. They want to make it to 200. But they’re using VR for everything, from how to handle a busy holiday rush to active shooter training, and they actually took me through a module. And so, you have, in one side, a 360-degree angle, one girl is spinning in the top of a car, creating a huge safety hazard. There’s a really upset customer screaming, and then there’s also a really upset customer who’s just kind of standing silent. And so, they’re using these VR technologies to teach their employees how to handle that situation, what kind of signs to look for for frustrated customers, and all the way around to how to handle a safety situation.

05:11 JJ: So they’re using VR to stress out their employees.

[chuckle]

05:14 HS: Well, actually, they’re using VR to make it so when they get to a certain situation they’re not stressed, because they got that…

05:19 JJ: Yeah, I take your point. Yeah.

05:20 HS: They’ve got that under their belt before they go out on the sales floor. So yeah, it is stressful at first but… [chuckle]

05:26 JB: I am picturing the door opening Black Friday, 5:00 AM VR experience, where they’ve put the new associates in there and they have to relive over and over again the opening of the doors at whatever time it is in the morning when people stampede in. Is there anything beyond… Or in your experience, is there anything beyond Amazon that’s driving retailers to embrace these technologies, or is it really just mostly the Amazon effect?

05:51 HS: Well, I think right now especially, the economy’s doing really well, and with moderately rising wage growth, there is a lot of people more employed, there’s a lot of different changes in the economy that are giving retailers more money in their pockets. And so while some of the retailers like off-price brands and entertainment concepts are using that money to expand and buy new real estate and go to new markets. These other companies I’m hoping and I’m thinking what we’re gonna see coming up soon, that they are gonna be able to invest this money in new technology, which again, it comes that they have to do that to keep up with Amazon, but also just to make the customer experience better, to keep their brand loyal to customers.

06:30 JB: So that’s interesting. So what you’re saying is that really the post 2008 recovery and the economy that we sort of find ourselves in now, that’s actually doing really well and has been for a few years, that it’s sort of like that success is part of what drives then the businesses to actually adopt new technology, it’s because they can.

06:49 HS: Right. They finally have the money to move into new markets, but if they don’t wanna do that since a lot of these stores are experimenting with smaller footprints, closing stores, looking for a smaller kind of floor concept, they’re able to invest that money in technology instead.

07:04 JB: Did you talk to any retailers? Like the small store concept is one that we talk about a lot at Marxent and on this podcast, the idea of selling more through less square footage. As you were researching this story or others, did you talk to retailers who talked about that in relation to VR at all, or is it more they just sort of, they know this is happening and they’re trying to figure it out?

07:23 HS: Yeah, I didn’t actually talk to a lot of retailers, but there are a lot of places that are looking into using VR, but specifically augmented reality as well, to figure out how to do… I mean, where you… To go on… You don’t even necessarily [07:34] ____. You don’t even really have to go into a fitting room, because they’re gonna put you in front of a screen that’s gonna show you what you’re wearing. I think Sephora is one that has a type of brand where when you go on to a floor format, you can see it, you can stand in front of a mirror and it’s gonna show your face, what it would look like if you use a specific product.

07:49 JJ: Yeah, the Sephora example is a good one because applying make-up to a face is pretty straightforward with the sort of facial recognition software that we’re seeing in the industry. I think the challenge has always been clothing though. It’s difficult to make clothing look like it’s modeled on to somebody. Have you seen any advances in that recently, or any breakthroughs in that sort of thing?

08:07 HS: I think the technology is definitely improving. I think right now we’re definitely not at that point where you can put it on me, and I don’t I look like a brick. [laughter] But I think that technology is gonna keep evolving, especially if more money is put into it and more companies start to pick it up. And we’re gonna start seeing, maybe not necessarily where you can figure out what size you necessarily need, but maybe be able to see what something would look like, you know, at least…

08:30 JJ: So that’s interesting.

08:31 JB: Based on the color. [chuckle]

08:33 JJ: Yeah. So that’s… I think actually it might be easier to figure out what size that you need rather than make something look compelling digitally on somebody’s body. Like photogrammetry and facial recognition, stuff like that, all of those things I think can combine to give people realistic measurements with a camera’s glance. And I think that might be actually a better use of AR than trying to visualize what it’s gonna look on you and just give you better sizing guidelines, which I think is kind of cool.

08:58 JB: Yeah, better sizing is huge to me, as someone who’s right in-between on jean sizes, like…

09:05 JJ: Or God forbid, you’re a female shopper and there’s like…

09:07 JB: Yeah, exactly.

09:07 JJ: 1,000 sizes that none of them work for you.

09:09 JB: Right. Yeah, it’s interesting. That air could drive that sort of change in that. Let’s… Branching off…

09:14 JJ: Sorry, I’m getting this way off track.

09:17 JB: No, no, no, that’s great. I’m gonna go way off track now too. Branching off of AR and VR, what other technologies did you sort of see retailers embracing for this holiday season?

09:24 HS: Yeah, this holiday season, the big one is going to be the mobile payment. And so part of that experience that really stinks about holiday shopping is standing in that line, and no one likes to do it. And so, what Target and Walmart, and I’m sure other retailers, they’re gonna roll it out too, is kind of a mobile payment, where they’re gonna place their associates and their employees in the busiest parts of stores so that you can just walk up to one of them and check out instead of having to wait in that hour-long line to make it to the front, to get ready to leave.

09:53 JB: So what you’re saying is this year, we’re gonna end up… We’re gonna see mobile payments look like there’s an associate with a tablet of some kind who checks you out. I know that Macy’s has been talking about mobile payments where you just use their app and you can just check out wherever you’re standing in the store and pay.

10:07 JJ: I think there are some challenges with that, like getting people to adopt an app is always difficult. I don’t download apps basically, ever. Now, I know I’m a technophobe, which is ironic, [chuckle] but I think in general, people don’t want the commitment that comes along with downloading something, yada, yada, yada, right? So your vision of it, I think, is probably right. You have mobile cashiers in the store, and basically you’ll be able to go to anybody and check out with an iPad or something.

10:30 HS: Right. This technology is not even close to advanced right now, as advanced as Amazon’s is with the cashier-less at Amazon Go stores, where it’s got weights that will track it and you don’t even have to… You just pay, and you just walk in, and it just pays for you, basically. So we’re not there yet, but I think in the near future, these stores are gonna be able to figure that out as well for future holiday season. This year it’s gonna be, unfortunately, so that you’re gonna need an associate there to run the process.

10:57 JB: I’m gonna ask you a question you may have no idea the answer, and if you don’t, please just tell me, “No, I didn’t ask that question.”

11:02 JJ: Yeah I often, I have no answers.

11:03 JB: Yes, so I’m thinking, when you talk about Target and Walmart and how they’re gonna have all these sort of people wandering around, able to check you out, I know that in store, Wi-Fi is typically atrocious, and I’m wondering…

11:17 JJ: Universally atrocious.

11:17 JB: I’m wondering if they… If you ask them about bandwidth or if they said anything about bandwidth, or if that’s an issue. Because I’m just picturing all these people running around stores with iPads that don’t work, so that would be like my concern.

11:27 HS: Right. Yeah, I actually haven’t, not heard anything about that yet, but that’s a very real fear I think, especially… I mean you saw on Amazon Prime Day, Amazon got its own web services and it’s still… The website crashed. [chuckle] And so there’s always gonna be concerns about stuff like that.

11:41 JB: And then… Alright, so let’s talk a little bit about speed or convenience, because it feels like that’s what this conversation is really about; it’s retailers trying to figure out ways to make shopping more convenient for their customers.

11:55 HS: Yeah, the consumer is really changing. [chuckle]

12:00 JB: How do you… Explain that. How are they changing?

12:01 HS: So the consumer is really changing, and they’re wanting faster, they’re wanting easier, they’re wanting to not even step in the store in a lot of instances. And so we’re seeing a lot of different things with grocery pickup even. You don’t even have to pick up your avocado anymore. You can just tell somebody how you like it, and they’ll go do their best to pick the exact ripeness that you want. The consumer just is, overall, wanting to shop in their couch, and if it’s not from their couch, maybe they’re willing to drive to the store. But it’s really changing, that a lot of customers don’t wanna even walk into a store, and if they do, they don’t wanna be there for long.

12:35 JB: So it’s really the entire shopping process, the way people shop is just changing.

12:42 HS: Right.

12:43 JB: And…

12:43 JJ: So, let me ask you a weird question. Joe and I were talking about this the other day. So, if there’s a… Can we both say that there’s a glut of retail real estate right now? Is it a little oversold?

12:54 HS: Yeah.

12:54 JB: Yes.

12:54 JJ: Okay, so if retail real estate is oversold, and I know this isn’t really on our topic, what happens with all that space when it becomes not necessary? Has anybody talked about this to you?

13:04 HS: Right. So yeah, there’s actually a lot of things that are happening. Malls are the biggest ones affected by this because they’ve got these 200,000-square-foot Sears and Bon-Ton boxes that are closing, and they’re having huge issues because nobody wants a space that big anymore. So, we’ve recently seen a lot of them, they knock them down, and they build outward-facing restaurants, or they turn them into self-storage or warehouse space, because with more online sales, they need more distribution centers. That doesn’t necessarily work for a mall, but malls are also looking at entertainment concepts. So there is a ground one entertainment concept which is basically a huge Dave & Buster’s. They’ve got like bowling and alcohol and arcade games, ping pong, all different kinds of games. So a lot of those different concepts that are more experiential-based are growing. Customers really want experiences.

13:54 JB: That sounded to me like you’re gonna be using VR at the mall, whether it’s for shopping or for entertainment because, a Dave & Buster’s or whatever, I know that they’re putting in… There’s lots of VR games they’re going and stuff.

14:04 HS: Right. There are so many ways that augmented and virtual reality are gonna start being used in retail environments, even if it’s not necessarily from e-shopping.

14:13 JB: Oh, do you already have a sense of what some of those would be? Can you give me some examples?

14:18 JJ: Yeah, I’m curious, man.

14:20 HS: Yeah, some of those are the entertainment concepts, and actually, some of them are… I had a recent store just come to our Dayton area, and it’s a permanent tattoo store, and…

14:32 JJ: Wait, wait, wait, wait, wait, wait, wait, stop, stop. What? [chuckle]

14:35 HS: Sorry. It’s a permanent make-up tattooing company.

14:39 JB: Oh, okay. Gotcha.

14:41 JJ: I was gonna say I’m pretty sure that all tattoos are permanent for the most part.

14:44 HS: Right. Yeah, that was a… I missed a word in there. [chuckle] But anyway, so it’s just this new store in the Dayton area who is using an app now that will let you see what your face will look like. It’s that face recognition again. But it’s not necessarily that you’re gonna buy something. It’s like you’re literally changing your facial features by adding permanent make-up in tattoo form, so it’s lip line and lip color. They do hair follicles. So, if you lose your eyebrows, they’ll sell those in…

15:12 JJ: Yeah, this is a good idea for AR.

15:14 HS: Eyeliners.

15:14 JJ: Yeah, I could see that.

15:16 JB: Yeah.

15:17 HS: So, it’s not necessarily like shopping. And then it’s also gonna be that entertainment experience, too, like we just talked about. You’re gonna go into the mall and you’re gonna be… Not to be stereotypical here, but if you aren’t just the shopping type…

15:28 JJ: That’s fine.

[chuckle]

15:30 HS: Yeah. [chuckle] So if you go into a mall and you’re not the shopping type… I mean, I had all the time… My dad, when I was a kid, would not… He’d go in the mall and he’d just sit in the middle.

15:38 JB: Yep.

15:38 HS: At that point, he might go to some kind of virtual reality type experience where he’s on some kind of entertainment concept like a golf course or…

15:47 JJ: Wait. Wait, wait, wait. Is the arcade coming back? Is the arcade making a comeback?

15:52 HS: It might be…

15:52 JJ: Oh, my God, I’m so happy.

15:54 HS: In some type or form.

15:55 JB: Yes, that makes both Joe and I now aging gamers, but…

16:00 JJ: Fabulously, fabulously happy.

16:01 JB: We wanna go back to the mall just to play games. I’m guessing they’re more than a quarter now. That’s probably…

16:05 JJ: Actually, they might end up free. The reality of the situation is that, any way you can get people to retail locations and spend time there, they’re probably going to end up spending money. So, in a certain sense, let’s just talk about the landscape, the cultural landscape of the American mall over the last 50 years. Why not, right?

16:22 JB: Yeah.

16:22 JJ: The arcade was a good way to keep your kids busy, or to keep your husband engaged while you go shopping, or whatever, if we’re gonna use stereotypes, or alternately, just to have a way to entertain people on an open space so that other people can get shopping done. In a certain sense, my own participation in the American mall has declined dramatically because there is zero reason for me to be there.

16:42 JB: So I like that though, the idea of new technology as a [16:45] ____ leader, to just get people into the stores.

16:47 JJ: I mean, it kind of always has been.

16:48 JB: Yeah, yeah. Alright, well, so anything else for this holiday shopping season, Holly? Is there anything we’ve left out, or the listener should hear about? What… It sounds like what we’re saying is they should expect, hopefully, a speedy and convenient shopping experience…

17:06 JJ: I know that’s what they all wanna hear, going into the holiday season for sure.

17:10 JB: But what… Actually, let me ask it this way. Let me ask it this way. So, when this is all said and done, what will you be looking at from the holiday season to sort of figure out how it went?

17:18 HS: So, I guess my post-holiday coverage is going to look like trying to figure out where people actually spent their money. A lot of it’s gonna be online, and probably on your smartphone as well. But also looking at these technologies and seeing how much they were actually picked up, the different virtual reality, augmented reality. Walmart’s got the new price check app that uses augmented reality to help you scan through a whole assortment of products to figure out what’s the best deal. Amazon’s got the time, Wayfair, Macy’s. There’s a lot of different in-store, in-app technologies that are showing you what something will look like in your home before you actually buy it. And so there’s a lot of ways that I think I’m gonna be evaluating how technology was used [18:01] ____ to maybe what… The holiday shopping season is gonna be the biggest season. And so, how customers pick it up this year is gonna really forecast what the rest of the 2018 and into 2019 is gonna look like.

18:12 JJ: Yeah, naturally.

18:13 JB: Alright, well that’s great. We will look for all of that in January, I’m guessing. And just thank you, thank you very much for being on. Thanks for taking us to the story. I learned a whole bunch, so thank you, I appreciate it.

[music]

18:29 JJ: Hey, real talk though, is there anything you wanna plug?

18:33 HS: I will plug the Dayton Daily News, [chuckle] daytondailynews.com.

18:36 JJ: No, man. Don’t plug the Dayton Daily News. Plug something for you.

18:39 JB: I’ll plug something for you, Holly. You should follow Holly on Twitter. She’s @HRShively, H-R-S-H-I-V-E-L-Y.

18:46 JJ: You already screwed it up. You already screwed it up.

[chuckle]

18:50 JB: Why?

18:50 JJ: What’s her last name?

18:51 JB: Oh, I said Shively, didn’t I?

18:52 JJ: You did.

18:52 JB: Dang! Oh!

18:54 JJ: Try again. Hang on. We’re gonna do round two. We’re gonna go round two. Everybody quiet.

18:58 JB: I’ll plug something for you, Holly. I’m gonna plug your Twitter account. You are on Twitter as @-H-R-S-H-I-V-E-L-Y.

19:08 JJ: Nailed it.

19:08 JB: Thank you.

19:09 HS: I love it.

19:10 JB: So, everybody should go follow her. I already did. And thank you…

19:13 JJ: I did not. I don’t have a Twitter.

19:15 JB: Thank you… [chuckle] Again, with the technophobia.

[laughter]

19:17 HS: You should get a Twitter.

[chuckle]

19:19 JB: But thank you, is what I’m trying to say. Thanks for being on with us and talking to us.

19:22 JJ: Yeah, thanks, Holly.

19:23 HS: I really appreciate it. Thanks.

19:24 JJ: You can come on anytime. Have a good one.

[chuckle]

19:26 HS: Alright, you too.

[music]

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