AR is changing the world of ecommerce as we know it. Here's what that means for your business.

Utah Business

AR is changing the world of ecommerce as we know it. Here's what that means for your business.

Web-Based AR Transforms The World Of e-commerce

As I’ve frequently been speaking about Failing Fast and the Art of the Pivot, I mentioned a company that reached critical mass as the result of a single well-placed and executed product launch.

That company was AR (Augmented Reality) company, Seek. I took the time to visit further with the company’s founder and CEO, Jon Cheney. Mr. Cheney is a millennial founder just approaching his 33rd birthday at the time of this posting. He completed his schooling in Chinese and entrepreneurship at Brigham Young University while running several side businesses. He’s a proficient pianist and composer, whitewater kayaker, and gymnast (as well as a husband and father of four).

In 2016, four years after graduation, he founded Seek with a vision to become the world’s predominant AR platform. “We didn’t know what that meant when we started,” Mr. Cheney says. “We thought we did. But we didn’t have a lot of reference.”

At the time of the founding, the world was abuzz with Pokémon GO, which premiered in July 2016 and became a national craze. The game crossed a billion downloads in February 2019 and hit $3 billion revenue in December 2018.

Seek wanted to capitalize on the craze by supporting this kind of activity in a way that would provide real value in addition to an AR experience result. So they formulated an AR treasure hunt and worked with vendors to build AR incentives to drive traffic into participating stores for values like a free cookie, discount, or $100 gift card.

The idea produced hundreds of thousands of users in 115 countries, but activity decreased substantially as the interest in Pokémon GO waned. So, in December 2017, the team headed out on a four-day retreat to find an alternate plan. How could they change?

They “stumbled across a vision” to become the “YouTube of AR.” “We would allow users and brands to create AR content and publish it in the same way brands have YouTube video channels,” Mr. Cheney said. They launched the platform, SeekXR, in December of 2017.

“We had the chops and the customers,” he said.

In fact, two and a half years later, SeekXR continues to rank as one of the largest collections of AR content anywhere. But after only six months in, Mr. Cheney says, they realized there were not enough people seeking AR content to allow the plan to succeed.

Now what?

“As a startup, you don’t have a lot of strikes,” he says. “Three and you’re out, right? Many don’t make it past the first. So we had to figure out how to position our tech and our talented team to give the market something it was ready for.”

“We thought about all of the tech we had built,” he continued. “We knew that for AR to work, we had to make it easy. It had to be simple for the user and for the publisher, including the brand in the process of making and creating that content. We had to solve the cross-platform issue. It was difficult and expensive to create support for iOS, then for Android and as many times as necessary to do it again on other emerging platforms like Magic Leap or rumored Apple Glasses possibly coming out in 2020.”

How could they build a system that would work everywhere that people would actually use? In Summer of 2018, the team reached the conclusion that their web-based AR technology was finally ready and the world was also prepared for widespread AR.

“While consumers are still catching up with much of what is possible through AR, there’s a compelling interest and need in e-commerce that users understand today,” he says. “I can view that plant or couch in my living room before I buy it? Can I try on those shoes or that necklace before I click ‘order? I’m in.’ Users see the value immediately, and it creates a superior online shopping experience.”

The team could see the market interest in AR for e-commerce had already been proven out, but the action was happening through apps from various online vendors. Mr. Cheney’s team had a novel and better idea — to make the AR available through any device and platform without the need for an app. In this model, brands provide 3D files (or Seek creates them). Then Seek’s technology transforms them and hosts the content to be compatible with all devices. “This is how SeekView came about,” Mr. Cheney says. “We had all of the right pieces. Finally, we’d hit the home run.”

Then, the launch. The company announced the product at on September 15th in Las Vegas. During the conference, about 40†companies beelined for their booth to investigate whether this app-less AR could be leveraged.

“About one-third became customers on the spot, and another third is working towards launching soon,” Mr. Cheney says.

In a single swoop, the company gained market traction and hit critical mass by lowering the barrier to entry for brands and consumers. “It’s expensive for companies to put something inside of an app,” Mr. Cheney says, “And it’s difficult to get consumers to change behavior. But putting it on the web doesn’t require them to change, as they’re already accustomed to clicking on the picture to see what a product looks like.” It was a perfect storm.

In hindsight, it was perfect timing as well. Just three months prior, the company had downsized its staff from 21†to 6, with several of the remaining team agreeing to defer salary to let the company continue to grow in its pivot. The core members who pushed through now lead the company, which has now risen to strength.

Today, a year later, Seek has progressed from near death to cash positive with 15 + brands live (including Nestle, Vans, Volvo, Ballard Designs) and another 10–15 going live within the coming 2–3 months. The most significant step, however, is a massive partnership with announced several weeks ago to “virtualize” their hundreds of thousands of SKUs.

The deal is a boon for both companies as it solidifies Seek’s position while saving Overstock a process that would have otherwise taken years and millions of dollars to finish. The AR and 3D installation is the largest of its kind, addressing 100 percent of mobile and desktop users through iOS and Android apps and via the web.

Why Seek?

Overstock’s Chief Digital Officer, Sumit Goyal, says, “We’re always ready and willing to take any chance and run any test on something that will make our customer experience better. We take pride in having been one of the first to offer AR for our customers in 2017 through a mobile app, but the technology to provide this experience from the web didn’t exist. We’ve been actively searching. Then we discovered Seek, ready, and able to help us take advantage of this inflection point, directly in our back yard in Lehi [Utah].”

Mr. Cheney says, “We’ve been watching Overstock for a very long time, and have been pointing people to their site as an example of the best-in-class use of AR. But now, with the ability to expand 3D tools directly to the desktop and mobile web — AR is ready for prime time, and we believe the partnership is ideal.”

Development cost aside, the biggest win for vendors and consumers is vastly reducing or eliminating the current e-commerce norm of 30 percent of sales lost to returns. When consumers can see and experience the product ahead of time, buyers’ remorse dwindles, and satisfaction rates soar. On the other side of the transaction, sales conversion increase by more than 30 percent, Seek’s data shows, when a customer views a product in AR. It’s a game changer in the ultra-competitive e-commerce landscape.

At present, the company could continue to fund its own growth. However, striking gold is a bit like a lightning strike, Mr. Cheney says. The team is seeking strategic funding to accelerate growth. Time will tell the outcome for Seek, but for other early-stage founders,

Mr. Cheney’s words of wisdom are this:

• Always listen to your customers. They will tell you what to build if you stop talking and listen to what they need.

• Building consumer-facing platforms is hugely capital intensive. If your platform is free for users, then you have to build two businesses — one to get users to download your platform and then another one to get companies to advertise through you platform.

• Communicate with your investors. If they understand your pivots, they will likely keep supporting you. Business ideas are a dime a dozen. But your investors, at the end of the day, have invested in the team.

• You will make mistakes. Don’t get discouraged. Learn from them, overcome them, and don’t make them again. “It was Thane Brimhall (Seek’s CTO) who brought the web AR idea to the table. I rejected it at first, but then listened to my team and they convinced me that this was the right path.”

• With emerging technologies, people don’t know the space like you do. Be patient with the market. Make things simple as you build products and educate your customers.

• Cool technology only gets you so far. Useful technology that can prove an ROI will get you to cash much faster. Preliminary budgets buy cool technology; then mainstream budgets can drive ROI. 

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