NEWSLETTER JUNE 2015
Increasing Store Sales Close Ratio With In-Store Design Stations
The theory is simple. Equipped with a thorough knowledge of products and able to demonstrate all of them, the sales person obtains a good understanding of the customers needs and home environment, and provides a highly personalised service, dealing with things that are important to your customers, solving their decorating problems, and clearing their decision uncertainties. As a result, less customers disconnect at the door (i.e. 'just browsing'), more sales are closed in the first customer's store visit, and you have more high-conversion be-backer traffic.There is, however, only one small challenge: How?
To solve the in-store sales challenges Fagmøbler, a leading Norwegian furniture retailer and a client of the VividWorks since 2013, recently launched a new store design based on extending the use of augmented and virtual reality into the store environment. By deploying a number of large-screen 'design-stations' in their stores Fagmøbler enabled the customers and the sales personnel to visualise the full Fagmøbler product catalogue and to create, in real-time, interior designs in the customer's "own environment". The new store design also included equipping all sales people with iPads which can be used for engaging with the customers on-the-floor, opening customer's own designs (i.e. the customer has already started the design at home with the Fagmøbler online or tablet application), and connecting to the design stations for visualising their designs on the large screens.
The benefits of the new omni-channel concept are clear. As the sales personnel engage the customers in their "own environment" and learn more about the customer's situation and needs they can provide a truly personalised service and go beyond selling just a product with some basic upsell add-ons. Instead, they can help the customer to create an interior design and "fill the room" (naturally with Fagmøbler's products!).
The deployed system also helps the sales personnel to be better prepared for the sales situation. By doubling as a training channel it enables efficient training on new products, enhances the sharing of information on the latest design trends and tricks, and equips the sales personnel with new sales ideas (e.g. based on data-mining the online application use data).
The first Fagmøbler store with the concept was opened in May and while the actual results naturally are a guarded business secret it is sufficient to say that on a same-store basis Fagmøbler has never sold as well. Impressed with the detail gone into the store design we would not be surprised if the ROI-period was counted in weeks.
Long-term User Behaviour: After the Initial Excitement?
We focus on the use of virtual and augmented reality technologies in the sales tools (vs marketing gimmicks), and are always keen to understand how the consumers use the applications, routinely studying the consumer behaviour in order to identify behavioural changes and to analyse the effects of new features and technologies (e.g removing the plugin requirements).
In one of our consumer behaviour studies we recently wanted to analyse how well the technology has maintained its relevance to the consumers once the excitement of the new, shiny toy, has worn off - if it indeed has. We did this by comparing recent consumer behaviour from some of our long time customers - with 4-6 years of application use - to the same characteristics after the capability launch (sample size of 100k sessions from May). The results are, at least in our opinion, nothing short of impressive. While some consumer behaviour differences exist between applications (virtual reality, augmented-reality, live-AR) and client types (PC, tablet, phone), we found that on a high level:
Consumer Use Has Remained Consistent
- The customer take-up varies mostly based on the linkage to the purchase cycle and promotion (18.5%-40.2%),and after the initial fast ramp-up, the use typically continues to increase gradually (suggesting a relatively high Bass innovation coefficient).
- The support of tablet applications typically increased the application use by 15%-20%.
Consumers Have Remain Engaged
- Average session length has remained consistent at 22mins 36s (longest sessions over 4.5hrs!) and the standard deviation at 6min 6s.
- The engagement is similar across all device types with even iPhone (a bit to our surprise) having a session length of 20min 30s.
- The live-augmented reality sessions tend to be shorter than the VR and AR sessions. We believe that this is due to the consumer spending more time in the design sessions while the live-AR feature is typically used only for the final verification of products and colours in the real environment.
Consumers Continue To Design With The Apps
- 35% of all sessions involve modular products and on average 2 products (highest 18) per session.
- When designing with modular products the consumer on average uses 8.8 elements during a session (highest 406 over multiple products).
- On average consumer tries 4.3 different fabrics (highest 313 fabrics during as session).