Despite COVID-19 stay-at-home orders, social distancing guidelines, and non-essential store closures, today’s consumers are craving emotional connection more than ever before. However, yesterday’s rules don’t apply in today’s reality, and traditional shopping isn’t as simple as it once was. That said, with major advancements in augmented and virtual reality technology, people can visit a mall, talk to brand reps, and compare products all from the comfort of their own couch. Welcome to the future of retail, and it’s all happening right now.

HypeHour #5 took place on Wednesday, August 26, and it covered everything you need to know about digital transformation in the retail industry, and how savvy brands are using innovative technology to enhance the omnichannel shopping experience. The HypeHour is a monthly livestream event that covers relevant topics, answers difficult questions, and brainstorms creative ideas with the industry’s most advanced minds. Meet our panel of experts who joined us for HypeHour #5: “Making The Virtual Experience A Reality For Consumers.”

• Andrew Catapano – SVP of Digital Strategy & Marketing at BDSmktg
• Kelly Campbell – Senior Marketing Manager at BDSmktg
• Sean Ludick – BDS Board Member & Former Microsoft Executive
• Colan Sewell – VP of Global Sales at Facebook Reality Labs
• David VanderWaal – SVP of Marketing at LG

You can watch the livestream video above, or you can read the detailed transcription below! Or – if you just want the highlights – here are our top takeaways from HypeHour #5:

1) COVID-19 Accelerated Existing Trends And Caused The Demand For Safety And Convenience To Skyrocket

Although the retail industry has been under pressure for years, COVID-19 accelerated existing trends, and the boost in demand for safety and convenience allowed for new developments to take hold. Of these developments, three in particular stand out. 1) Contactless payment. Although touch-free alternatives were already on the rise, 48% of consumers now agree that contactless payment solutions are the #1 most important safety precaution for retailers to adopt. 2) Omnichannel engagement. Young consumers, especially Gen Z, are more inclined to engage with e-commerce ads, buy on social media platforms, and spend money with brands that have unique personalities. In fact, brands with robust omnichannel engagement strategies retain about 89% of their consumers vs. just 33% of their more “traditional” counterparts. And 3) Augmented reality and virtual reality. More so now than ever before, the adoption of AR/VR solutions can create real emotional connections and bring the in-store experience into the homes of consumers anywhere and everywhere.

2) Augmented And Virtual Reality Can Provide Customers With An Outstanding, Memorable Shopping Experience.

Global spending for AR and VR is currently at $18.8 billion, and experts predict that figure will rise to $571 billion by 2025. Not only does AR/VR help consumers better understand products, but it also helps them make intelligent purchase decisions from the comfort of their own homes. Additionally, AR/VR helps grow conversion rates; research shows that brands that implement AR and VR sales tactics convert 40% more customers compared to brands that don’t. One company that’s already leading the way is IKEA with its IKEA Place app that allows shoppers to upload a picture of a room, and then automatically measures the space and provides furniture recommendations. Another innovative company is Sephora, with its virtual artist app that uses facial recognition technology to allow customers to digitally try on and buy cosmetics with just a few clicks. When correctly implemented, AR and VR can provide customers with an outstanding, memorable shopping experience that they want to share with friends and family.

3) Although Physical Distance May Separate Us, Emotional Connection Can Make Us Feel Closer Than Ever

At Facebook Reality Labs, the core mission is to give people the tools to feel connected anytime, anywhere. But most of all, Facebook Reality Labs’ goal is to develop ways to commercialize future technology to ultimately make our lives better. One of the ways that Facebook is fulfilling that goal is by creating emotional connections between people, even when physical distance keeps them apart. In today’s environment, we can’t always be in the same room, and even seeing our families can require special planning and precautions. One solution that Facebook has developed is Portal, which is a smart video calling system that automatically pans and zooms to keep up with the action and fit everyone on one screen. Portal’s tagline is “if you can’t be there, feel there,” and the technology allows its users to do just that. As the demand for human connection continues to grow, the industry will inevitable develop more solutions that enable effective communication, even from thousands of miles apart.

4) Augmented And Virtual Reality Needs To Operate Completely Error-Free To Enable Mass Adoption

COVID-19 has caused volatility, uncertainty, and ambiguity, and consumers are reacting by changing their shopping habits. To enhance the digital transformation process, the retail industry needs to evolve from a “rack it and stack it” mentality and focus on improving the entire shopping experience. Additionally, retailers need to respect that shoppers no longer shop just to shop – instead, they’re on a mission to buy supplies and get out. That said, the demand for touchless alternatives means display manufacturers need to change the way they operate. No longer do shoppers want to physically engage with any type of retail display that’s been previously handled, which complicates the product comparison process. Although AR and VR could solve that challenge, the technologies need to operate flawlessly if they want to completely replace the traditional display experience, and it’s extremely important for brands to conduct extensive field testing and take consumer feedback into account to ensure innovative in-store technologies are completely error-free.

5) The More Accessible A New Technology Is, The More It Will Be Used By Everyone – Even Baby Boomers

It might take longer for Baby Boomers and Gen X to warm up to the idea of augmented and virtual reality vs. the younger population of Millennials and Gen Z. That said, brands need to find ways to educate older demographics on how to use new technologies, and also make those technologies easily accessible. For example, QR codes have been available for a number of years, but smartphone owners used to have to download a specific app in order to access them. However, about two years ago QR readers were incorporated directly into the operating systems of Androids and iPhones, and all people have to do is simply open their camera app, point, and click. QR codes are seeing a major resurgence as a touchless alternative in restaurants and retail, but their boost in popularity may not have been so impressive if Android and iPhone developers hadn’t previously thought to make that technology inherently native to smartphone hardware. By eliminating extra steps, you an advance technology adoption.

It’s no secret that it’s been a tough six months for the retail industry. However, as Winston Churchill once said, “if you’re going through hell, keep going.” With the advent of innovative augmented and virtual reality technology solutions, we can hopefully adapt traditional retail experiences and create an exciting “New Normal” way of shopping. What do you think? Do you see AR and VR as being an important part of retail in 2020, 2021, and beyond? Let us know in the comments below or on Hype Hive’s social media channels!

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Making The Virtual Experience A Reality For Consumers: Video Transcription

Speaker 1:
BDS Marketing presents The HypeHour, with your hosts, Andrew Catapano and Kelly Campbell, featuring special guests Sean Ludick, Colan Sewell and David VanderWaal. Today’s topic, Making the Virtual Experience a Reality For Customers. Let’s get started. Here are your hosts.

Kelly Campbell:
Hello, very excited to be on. I think Andrew’s audio is a little bit off right now but mine is on so that’s a good sign. We are excited to be here … there you are.

Andrew Catapano:
Sorry about that. I was doing my TikTok dance. I was doing my TikTok dance and I forgot all about my microphone. Here we go. We’re in business. Good to see you Kelly, how are you?

Kelly Campbell:
I am good. How are you, we are a month into August, almost over, I can’t believe it.

Andrew Catapano:
Almost over, can’t believe it, love to see you in the new studio, you look fabulous in the new studio and we’d love to see it. So, nice little Irvine feel we’ve got there.

Kelly Campbell:
It’s awesome.

Andrew Catapano:
Kelly, what do we have today? Very excited.

Kelly Campbell:
I am extremely excited about this topic today. We are talking all about AR/VR, virtual reality, if you don’t know what those mean, augmented reality, just amazing technology that’s out there today. I cannot wait to get into this with our guests, I’m very excited.

Andrew Catapano:
We have some fantastic guests today.

Kelly Campbell:
We sure do, yeah.

Andrew Catapano:
Hot ticket show. Do we charge for this show or still free?

Kelly Campbell:
I think it’s still free but we might want to rethink that.

Andrew Catapano:
Fantastic. Who do we have, Kelly?

Kelly Campbell:
Well, we’ve got Colan Sewell, who is VP of Facebook Reality Labs now, so excited to have him on. I’m going to talk to him about some really amazing things that Facebook is doing right now and then David VanderWaal, formerly SVP of marketing at LG, very excited to talk to him about VR, AR and making it a reality at retail. So excited about that and then of course, we have Sean Ludick back to give us our insights, as usual, always does a great job. We’re super excited to have him on, to sort of set the scene for us.

Andrew Catapano:
Well, Kelly we’ve got an exciting show. We only have a half hour to get through it, so let’s jump right back into it and we’ll jump into it and we’ll see you when we introduce Colan, correct?

Kelly Campbell:
Yeah, that sounds good.

Andrew Catapano:
Fantastic. See you in a little bit.

Kelly Campbell:
Okay.

Andrew Catapano:
Okay. Age of Aquarius. Spent six weeks at the top of the billboard charts in 1969. We are six months in to COVID, welcoming in, in 1969 the Age of Aquarius. Welcomed in, ushered in a new age, a new era. I believe were on the cusp but the same so couldn’t have picked a more appropriate song. Six weeks at the top of the charts, six months into COVID, ushering in a new reality, entering into fourth quarter, into a new era, how can today’s retail be successful? What are the new normals and we know that yesterday’s rules won’t apply, right? We’re looking to transform the physical space. We know that retailers and brands have to do that.

Andrew Catapano:
The path to develop customer information without compromise, with total immersion and experience. We have to rethink the four walls altogether, we know that too. Embrace the concept of bringing the store to the customer, not only the customer to the store. We have to really examine the relevance and importance of potential effect of the physical, the digital, the human experience and today, the virtual experience, AV/AR, all right. So, the question is have you adopted and enhanced your traditional retail strategies to meet your customers in today’s new normal? Have you examined your end-to-end buyer journey to engage customers in this new permanent normal?

Andrew Catapano:
I’ll tell you what, why don’t we take a look at some people doing it and with that, I get to introduce the duke of data, the archbishop of analysis and our resident majesty of market research, bring back in my friend, Sean Ludick.

Sean Ludick:
Andrew.

Andrew Catapano:
Sean, so happy to have you here. You know we’ve set it up on transforming the physical space, rethinking the four walls and thinking how we’re going to adapt to this new reality. I am going to turn it to you my friend and why don’t you take us through what some brands are doing, what we can expect and what we’re seeing in the data.

Sean Ludick:
Absolutely. Thank you, Andrew, and yeah, really looking forward to the show today with some real special guests, so if we can get into the first slide. Look, when we think about retail today, retail has been under pressure, it was under pressure before COVID-19, right? COVID has really accelerated some of these new trends we’re seeing and people are becoming more and more comfortable shopping online, why, because it’s convenient and two, because it’s safe. So, some of these emerging trends we’re seeing today are three big ones. The first one is contactless shopping. Now, contactless payments were actually already on the rise in the United States but with the ongoing pandemic, this has heightened the number of Americans that are actually using these various touch free payment methods.

Sean Ludick:
In fact 48% of consumers believe this service is probably the most important safety measure for retailers to follow. Then two, omni-channel retail, omnichannel on steroids. A retailer’s brand coverage, their social media presence and the overall lifestyle affinity wins consumers, especially Gen Zers. Consumers are moving more and more towards this comfort of eCommerce by engaging with more ads, they’re buying on newer platforms and they’re actually putting their money where a brand’s personality shines. So, we are seeing … and research has shown that companies that have a really robust omnichannel engagement strategy retain on average about 89% of their consumers compared to about 33% of companies with weak omnichannel sort of customer engagement.

Sean Ludick:
So, I think … and then in comes AR/VR, number three, one of the biggest trends we’re seeing and this AR/VR brings the in-store experience into homes of consumers but more importantly creates that emotional connection. Now, when people feel … when they interact with the product, the more they want to feel connected to that brand and we know that the two largest drawbacks of any online shopping is the inability to touch and try products. So, AR/VR can provide customers with that unforgettable shopper experience and they want to have it again and again and again. So, if we can just go to the next slide, I want to give you some examples of retailers today that are already embracing AR/VR, especially in the bricks and mortar retail and companies that are really leveraging this to the health.

Sean Ludick:
If we think about furniture, I’m going to call out one, IKEA’s augmented reality app, they call it IKEA Place. What a consumer does is they take a picture of their living room and the app automatically measures the space and it provides recommendation on furniture, that fits into this space, very cool. Shopping and clothing, I mean Nike, come on. Nike Fit. Nike Fit is this cool app they do which actually allows you to get your true shoe size. All you do is point your phone at your feet and the phone camera will actually then measure the size of your shoes and will determine what the best shoe size is for you.

Sean Ludick:
Another big one, we’ve all seen this, makeup, beauty. I mean Sephora has this virtual artist app and this uses facial recognition technology to allow customers to digitally try it on products. They scan their face and the app can try in different shades of makeup by using this app and then lastly, jewelry. Laura Lively, this jewelry company selling necklaces, earrings and accessories, gives the customer the opportunity to see how necklaces look right for them on their phone. This adoption of AR/VR is very, very exciting in retail. So, if we can go to the next slide please. Let’s think about investment. Let’s think about the share and the forecast of AR/VR.

Sean Ludick:
No doubt, gaming takes top spot but look in that chart there you see that retail is now one of the top industries that’s actually forecasted to grow nearly 300% in the next few years. Research is showing in 2020, China will deliver the largest AR/VR spending total, about 5.8 billion followed closely by the United States at about 5.1 billion. Regions like Western Europe and Japan are the next two largest regions that we’re going to see in 2020 with regards to AR/VR. What was surprising when I looked into some of this data and the fastest growing regions for a forecasted period of 2023, there’s two regions that stand out as the fastest growing, that’s Western Europe and the United States.

Sean Ludick:
No doubt, investment is growing in this space. Global spending is about 18.8 billion. We’re seeing that estimated market values at 2025 is going to be at 571 billion. So, huge growth in this space, very, very exciting technology. Then, mobile AR, mobile AR opens doors to many other things that we are seeing today and people love to use a device. We have a billion people today on the planet that use mobile AR today. The innovation is just fantastic. If we can go to the next slide please. AR helps many things and I’m going to focus on three. AR helps consumers understand the product, 39% of AR retailers use AR for the consideration phase in the funnel.

Sean Ludick:

They all helps consumers make buying decisions, 60% percent of retailers today use AR for the sales phase of their funnel. The third AR helps drives … or helps grow conversion, using these 3D technologies not only in store but online, we are seeing conversion rates of up to 40% of companies that use AR versus companies that don’t use AR. My final thoughts on AR/VR is very simple, three things, AR/VR is an effective marketing tool that works both for shoppers and retailers. When it’s correctly implemented, it can provide customers with an outstanding memorable customer shopping experience and guess what, they want to share that with their friends, so people love to talk about their experiences.

Sean Ludick:
Number two, this technology is immersive, has a wide range of benefits both for brick and mortar and online stores and three, with its capabilities of visualization, entertainment, gamification, deep engagement, helps improve this decision-making process and augmented reality provides this … in fact, it’s an effective investment for retailers to do to generate more sales. So, a very exciting technology, very excited to hear from the experts. If we just go to my final slide please. BDS is investing a lot in the way we’re driving our digital journey, everything that we do, everything that we drive digital [inaudible 00:13:06] complement our core. So, we’re very excited to hear from Colan, as well as Dave about their experiences. Andrew, I hope that helps and sets you up for the rest of your show.

Andrew Catapano:
Sean, insightful and awesome as always. I actually had the chance to use that IKEA app where you can place the furniture in your room. You can see how it looks inside your environment. I also got to explore a little bit of the place in your room that Amazon is doing. You are dead on correct that we’ve got this new culture of couch customer, right? Let’s call it the couch customer. Let’s deem that right now, where people are at home and they want to simulate that in-store buying experience and they want to see it in their environment and I think that’s really what I took from that, is looking at all those people doing it well, if we don’t embrace this, this couch customer and bringing that store experience to them through AR/VR, I think that’s how we’re going to see some success. Sean outstanding. Thank you, insightful as always and I appreciate your time.

Sean Ludick:
You’re welcome thank you.

Andrew Catapano:
KC. I had my pen going. I have my pen going on the notes.

Kelly Campbell:
That was amazing. I mean, I think that really sets us up for our next conversation. I can’t wait to dive into this, knowing where we’ve been with AR and VR and it’s been quite a journey and quite a road in this technology space and trying to get it to the next level, right? So, I can’t wait to jump into our next conversation.

Andrew Catapano:
Yeah. I’m not going to lie, Kelly. Normally when you’re interviewing, sometimes I do sneak away something and take a break. I’m glued for this one. I’m glued for this one. If anybody can tell us it’s the next guest, take it away Kelly and have some fun with it.

Kelly Campbell:
So excited about this one. Colan Sewell from Facebook is here. He is the VP of Facebook Reality Labs where he heads the company’s efforts in growing their hardware business along with so many new things, so many new technologies coming out of Facebook. Before Facebook, Colan was a VP of sales at HTC, where he helped establish vibe as a leader in the VR industry. So, if you are familiar with VR he’s been all over this road map here of technology and in the VR industry. He spent most of his career in technology and gaming, which includes various sales and marketing roles even at Microsoft. So, I’m just super excited to bring him on, to talk a little bit more about what Facebook is doing. So, let’s bring him on board. Welcome Colan.

Colan Sewell:
Hey, Kelly. How are you?

Kelly Campbell:
Good. Good. Welcome on to The HypeHour. We are so excited to talk to you a little bit more. How are you doing?

Colan Sewell:
I’m doing great, I’m a full-time kindergarten teacher this week, actually first grade teacher this week.

Kelly Campbell:
My goodness.

Colan Sewell:
Yeah, and my daughter is in a mandarin school and I don’t speak mandarin so, that’s fine.

Kelly Campbell:
No. Yeah that could be quite a challenge, right? If only we had something that could translate as we’re going through stuff, I’m sure that’ll happen at some point in the near future but that’s quite a challenge for sure.

Colan Sewell:
Right, write that down, yes, absolutely.

Kelly Campbell:
Right.

Colan Sewell:
Next product.

Kelly Campbell:
Awesome. Well, I’m really stoked to have you on. I just want to dive right in and I didn’t even know that Facebook had a team working in VR until recently so tell us about leading this team and what goes on in this area that’s just so different from the rest of the company?

Colan Sewell:
Yeah. I mean, we’ve been working on augmented reality, virtual reality, telepresence, a lot of different technologies over the past few years. I mean, we made the acquisition of Oculus but we’ve kind of kept it as Oculus. What we’ve really done is now taken all of the different efforts that we’ve been doing to create the next computing platform and kind of put those into one division called Facebook Reality Labs. So, we’re working on lots of future tech and then taking that future tech and trying to commercialize it and make our lives better. If you look at Facebook, the mission of Facebook is to connect people together, right?

Kelly Campbell:
Yeah.

Colan Sewell:
It’s actually not different from the mission of Facebook Reality Labs which is to then take that connection and create an emotional connection, so if you heard Sean talking about creating emotional connections for shoppers, we want to create an emotional connection for our users despite where their atoms lie. So, it’s really a problem of physics that we’re trying to solve. How do you and I feel emotionally connected, metaphysically connected in the same spot regardless of what our physical atoms are? That’s the problem that we’re taking on, which is a big challenge, especially in these times, people want to … in these times, people want to feel connected, right?

Kelly Campbell:
Yeah. Definitely. I mean, I think we all feel that, right? We want … we crave that connection. I know we’ve said it before, it’s so important to today’s environment where we are having to be socially distant. We can’t be in the same room always. We can’t see our family. We can’t see our friends. I mean, so how has this demand and sort of use case changed for Oculus and Portal over the last few months in relation to everything that’s going on with this pandemic and what we’re seeing?

Colan Sewell:
Yeah, I don’t think that the … I don’t necessarily think that the use cases have changed. I think the use cases have always been there. If you think about gaming, gaming has been a use case. It’s been there. If you think about Portal and telepresence and connecting with loved ones, it’s been there. People have really engaged with Portal, the people who’ve had Portal and understand it. They love it. It’s the best video calling experience you can have. What’s happened though is that COVID has shifted that demand curve out, right? Instead of kind of moving along that demand curve of price and supply, we’ve actually really shifted out and said, “Okay, we have now a product market fit.” People love the product and now more people realized that they need that product, right?

Kelly Campbell:
Yeah.

Colan Sewell:
So, that’s what we’ve seen is kind of the shift in this demand curve out and then people now, getting the network effect of now people using it in the social way, particularly Portal. Now, other people using and understanding that it’s the best experience that they can have. I think people are looking to again, stay emotionally connected and VR is a way to put people in the same spot.

Kelly Campbell:
Yeah.

Colan Sewell:
I also necessary think it’s a shift in use cases because use cases are still evolving but it is definitely a shift in demand.

Kelly Campbell:
Yeah, for sure and I’m sure you personally have used these products to be able to connect with people in a variety of different ways and like you said, the use case hasn’t changed but it’s just evolved to becoming more of a need in our everyday life, right?

Colan Sewell:
Yeah, absolutely.

Kelly Campbell:
Anything that you can share from like a personal experience that you’ve even encountered with this type of technology?

Colan Sewell:
Yeah, I’m going to tell you, there’s a couple. My daughter lived in Seattle up until very recently and I lived in Menlo Park and so, she’s six years old at the time and have you ever had have a conversation with a six-year-old on the phone? Maybe it doesn’t work, right?

Kelly Campbell:
Yeah. It doesn’t work.

Colan Sewell:
Exactly and even if you’re a Facetiming, right, they look at the phone, it’s all over the place, they put the phone down, it’s not there. Before we launched, I got a dog food unit and sent one to my daughter for Portal and we had our first conversation on Portal, was an hour long. An hour long with a six-year-old, right?

Kelly Campbell:
That’s amazing.

Colan Sewell:
We had it in her room, we could walk around her room, she was doing like cartwheels, she was like showing me her gymnastics routine and I’m like, “Hey, let’s have a tea party,” so we had tea party, right? She’s just doing everything naturally but we’re interacting as if we’re in the same room. For me, that was super impactful and that it truly helped me keep a connection to my daughter when during those times, if you can’t be on the phone then you kind of drift apart. So, that was really impactful for me. That’s a good, I think, example everybody can get around, knowing what Facetime and other video calling technologies can do, that this is a much more robust video calling technology.

Kelly Campbell:
Yeah.

Colan Sewell:
Another one on the VR side is that my HRBP, her son had brain cancer. Yeah and it was benign they were able to operate and get everything out, so it’s awesome. He’s made a full recovery. During the process they used, and he was at … I think they went to Stanford. Yeah, they went to Stanford Medical and they used VR to show him his brain and what was in his brain and so he could … virtually see, “Okay, here is what this looks like in your brain. Here’s where it’s at. Here’s what we’re going to do,” to really remove a lot of the angst for him and for them around what was going to happen. I think that things that have a tremendous amount of impact on the world, right?

Colan Sewell:
So, there’s so many use cases for VR and how it can be impactful but I’d say those are really two good, ones that come to mind.

Kelly Campbell:
Yeah, I mean speaking of Oculus, it just seems like there’s so many opportunities for this brand and product and we’ve seen, obviously for personal things like that but then also in the B2B world and in that space various trainings, kind of getting everybody into the same space even if it’s virtual, right? Then, of course I heard a little bit about this NBA partnership. I would love to just hear a little bit more about what you’re most excited about with this product and-

Colan Sewell:
Yeah, it’s really good at the NBA. I love NBA. I wish we could start a lot of games. I wish we still had the Sonics, so RIP. So, I had to like adopt them, but not being able to go to NBA games sucks but being able to see it in VR is amazing, it’s almost like you’re in the game, which is fantastic. So, that one is fun and I’m sure there are many other examples of being able to do something in person like that. I think that those commodified things are great, but I think that the mass adoption of VR will happen because you use it to be productive first. You use it at work, similar as how the pc came from work into home which is the opposite of kind of where you saw kind of the iPhone phenomenon or iPad phenomenon where you used it at home and then moved to commercialization of IT or consumerization, right?

Colan Sewell:
So, I think that we’ll see it definitely in your jobs or things like that. So, some of those examples, a lot of them are around training right now. I think productivity and co-location will be really important but right now, the most thing where you can see the most impact is in training and we have … Walmart has put a significant amount of resources into driving trainings for their associates within VR and they train millions of people, driven cost down for their training and put lots of people through VR. So, I think people having the experience with technology there will then demystify it so to speak, for them and then, they’ll start to bring it into their homes and their personal lives.

Kelly Campbell:
Awesome. I mean so, what’s interesting is we actually have a question from the audience that came in during this … while we were talking. The question is what is the most impactful VR experience you’ve encountered. Do you think it could be … like what is that for you? Where do you think it could go?

Colan Sewell:
Yeah, I mean, I said earlier around … the medical fields is phenomenal. There was a study done with training new physicians around putting in an artificial knee. They went through and trained a new set of physicians on this procedure for an artificial knee in VR and then without VR. They did some control and experimental groups. They found that the people that did it in VR were more retentive of the information. They could do it almost twice as fast than the people who didn’t. So, just being able to learn and do that is tremendous, right? It’s absolutely tremendous.

Kelly Campbell:
That’s awesome. Cool and then, I know there’s so many awesome products in the lineup. I want to sort of dive into obviously the quest and not having those wires I think when I first tried it out I was like, “Oh my gosh what do I do. This is … I don’t know what I’m doing,” but like removing that was such a huge step. Is there anything that you can sort of publicly share about what’s next for VR in this space?

Colan Sewell:
You’re trying to get me to go, aren’t you? You’re trying to get me to go there.

Kelly Campbell:
Not that one in there.

Colan Sewell:
I would be in trouble, I can tell. The second I say something, they’re going to be all over me, my PR team. Here’s what I can say. We’ll continue to see technology evolve and we’ll continue to invest in it. If you see at the … you talk about the wires, right? When VR first came, you had wires, you had external sensors, you had a pc. So, it was this really complicated, very complicated setup. It really was then for enthusiasts and it was really hard to break out of kind of the … not even early adopters like innovators, right? If you think about technology adoption curve, right?

Colan Sewell:
Then I think … then, as we’re able to remove those sensors, have inside out tracking and remove the wires, remove the pc then it’s like, “Okay cool so this is … I can get rid of these things,” but when we did that, it wasn’t a three … a full six stop experience, six degrees of freedom, it was three degrees, right? So, with Quest we’re able to combine six degrees of freedom, no wires, no pc and have almost pc-like performance. Fantastic, right?

Kelly Campbell:
Yeah.

Colan Sewell:
Now, we’ve kind of moved into that early adopter phase. Now, I think it’s going to take to jump the chasm, right, is we’re going to have to see increased resolution. We’re going to have to see price still come down if you look at what was the other barriers to entry, it was not just the technical setup but then also the content and then the immersion. So, you’ll see us to continue to invest in content, content, content, content. That’s important. Have great experiences because great experiences will drive adoption of the hardware. Yeah, that’s about as deep as I can get but you’ll see us continue to innovate, absolutely.

Kelly Campbell:
That’s awesome, yeah. I know, I’m excited. My husband is a video gamer. I mean he just … the whole thing is a great experience whether it’s for games or even just in your personal life, so we’re a big fan and then, I just want to know, I mean kind of going off of that, how do we bring that into the B2C space, sorry and also B2B space. How do we … I think we’re kind of at this point, right, of almost the tipping point, if you will, and how do we provide this unique experience to shoppers now, no matter where they are, kind of going into their retail space now and retail industry. I think that’s been kind of the next big frontier, right is to sort of get over that tipping point and into the next phase.

Colan Sewell:
Yeah. I think we’ll need to ensure that as the VR platforms grow, more people would have access to it, that should bring developers into the ecosystem who are really focusing on different niches. I do think that retail is one where we can absolutely disrupt retail through VR experiences. I think what we’re seeing now is AR experiences first, right and being able to try on glasses so to speak or try clothes on or things like that or being able to shop from home in a certain way so I don’t have to go and actually physically touch the product. I think what would be important for brands is to figure out how do they intercept the shopper with this technology from the time that they … time they order to then pick up and are there opportunities for you to intercept the shopper within that journey. I spend lots of my time now doing click and collect.

Colan Sewell:
I actually like it. I was full on only Amazon and then once I discovered like click and collect from these different retailers, I’m full on click and collect for everything. So, it’s actually changed my shopper journey. I would assume that others will follow there but when you do that and you move away from pure online shopping and you move to this model that’s a hybrid click and collect model then brands have to figure out, “Gosh, where do I intercept the shopper now? I don’t intercept them indoor because they’re getting it curbside. Can I intercept the shopper while they’re picking up in some way?” Those type of innovations.

Colan Sewell:
I don’t know what it means, I don’t know how we do it but it’s something that I’m thinking about on a daily basis.

Kelly Campbell:
Yeah, I think a lot of other brands and just people in general are trying to figure out like what is that next step for everybody? Where do we go from here? Obviously the whole experience has changed but how do we make it great again? How do we make it enjoyable again too? I think that’s been going through our minds at BDS is how do we make this awesome again, knowing the circumstances of what it is today. One thing I want to sort of touch on and I know this is really big at Facebook is just community. How do you see these products and even just AR/VR sort of playing a role in bringing a community together and sort of this new way of collaborating and playing and learning? How does Facebook envision doing that or even for yourself and your team, where do we go with this?

Colan Sewell:
Yeah, like I said earlier, being able to create an emotional connection despite your physical distance, that’s huge. So, the more immersive that we can be within that, the better but there are all these different use cases. I think collaboration quite honestly will be the thing that like really gets people there. Collaboration at work. If I’m in a virtual conference room and I have other people on my team in that virtual conference room, we learn not only through the words that we speak but we also learn through our actions and our body language but then we also learn kinesthetically by doing things, right? So, writing or having whiteboard, things like that. You need all of those things to communicate effectively with people.

Colan Sewell:
So, I think that, being able to bring collaboration in the workplace and get people to be able to use all three of those modalities, when they’re communicating, I think that’s what sticks and I think that’s what really gets people in there. If you talk about playing games, yes, games are great but I think games are just the tip of the iceberg, right? These other things that are transformative in the way that we live our lives and I truly believe that we’ll get there.

Kelly Campbell:
I think so too it kind of brings us, one final question from the audience that I thought was really interesting especially because you mentioned you’re back to school with your daughter what opportunity do you see for AR and VR in school systems and higher education, do you have any thoughts like especially being now at home and where do you think there are some opportunities?

Colan Sewell:
Yeah. Going back to learning and getting people all in the same place and getting kids again to interact, my daughter is on Zoom calls all day but it’s like where do you pay attention to, who’s there, half the people are looking, paying attention, there are not. Again, if you look at those modalities of learning, kinesthetic learning and then also verbal and physical interaction is super huge. So, I think that’s getting to that level of emotional connection during … in a collaborative scenario is probably I think where the most important impact will come.

Kelly Campbell:
Yeah, I think that’s been a question on a lot of parents’ minds, obviously of late and trying to help their own kids sort of get the feel of school without actually being there physically, right? How do you keep that attention, so I appreciate those insights, it’s awesome. That’s all I have for today. We had some amazing questions and my gosh, Colan, these insights are awesome, really appreciate you hopping on board and I’m sure we’re going to see some amazing things coming out of Facebook really soon and I can’t wait. It’ll be exciting.

Colan Sewell:
Thank you. Thanks for having me on.

Kelly Campbell:
Thanks Colan. That was awesome.

Andrew Catapano:
Unbelievable. I’ll tell you Colan did a lot of great things. I mean, some takeaways I wrote down is he’s exactly right, developer content will push the hardware but connection, that creates the most memorable experiences. We can keep focused on understanding that’s what it is. The tool for connection, right and the more we can embrace that, that’s when it will come to full fruition and I’m telling you, I guarantee you, watch out. Facebook, what they’re going to come up with for the shopper journey, for the engagement process, for the experiences, I know he’s probably got all kinds of PR people around him telling him what he can and can’t say but watch out. I guarantee it.

Andrew Catapano:
Great things to come and what an outstanding interview and a heck of a guy. I got a chance to get to know him during this whole process, heck of a guy.

Kelly Campbell:
Yeah, very cool. I know we’re excited to bring on our next guest even talk about some more around this idea of bringing AR and VR to retail. So, do you want to take it away?

Andrew Catapano:
I do, life’s good with Dave VanderWaal, let’s do it. Dave VanderWaal coming up next. He’s an experienced marketer with 20 years of consumer brand marketing, shopper marketing and category management. He’s most recently senior vice president of marketing for LG electronics in North America. Hands down, my favorite television, where he was responsible for marketing activities in all of LG B2C business units, home appliances, consumer electronics, mobile communications. I’m excited. It says we’re excited but I’m excited to get his take on VR, AR and how to make this technology more accessible and mainstream for today’s shoppers.

Andrew Catapano:
I think though, I will probably let the expert talk more about that. Get into the hive. Welcome, Dave VanderWaal. How are you sir?

David VanderWaal:
I am great, Andrew. Thank you for that very, very high level introduction. I’m feeling good. I’m ready to talk about the new normal at retail and certainly the technologies that can be used to make what is the new normal really at retail.

Andrew Catapano:
Well, seeing as you are wearing the hat which was our remembrance of COVID, I’m going off script 30 seconds a day because did I learn that your daughter won America’s Got Talent and you have another daughter going to the Savannah Art Institute or what’s going on in the VanderWaal household?

David VanderWaal:
Okay. I like that. I can be a shameless plug for my younger daughter, Grace who won America’s Got Talent at 12 and now is 16 years old, has done an incredible amount of things, more in four years than most of us do in an entire lifetime. She’s off now at an art academy with normal teenagers around her which is going to be really good for her. She also was a star in a Disney Streaming Film, one of the first original films they made called Star Girl and Grace was the lead actress in that movie as well. So, check her out there and SCAD Dad, that’s Savannah College Art and Design and that is where my older daughter, Olivia will be going to this fall, COVID permitting.

Andrew Catapano
Papa. Okay. I don’t know if you can hear me in the back. We need to book her. We need to book those two next. Dave, I’m not going to say and I don’t have a lot to say but that sounds like a very exciting young people so congrats and I’m sure you’re a proud papa but let’s get into it.

David VanderWaal:
Yeah.

Andrew Catapano:
David first question, things are starting to normalize a bit, right? We’re coming out of the innovation fog. Now we’ve gone through complete digital transformation. Everyone already knows the term new reality, new normal, how do you think that the customer shopping habits are going to continue to change?

David VanderWaal:
Sure, Andrew. Put up the slide, if you could, the first slide at a very high macro level. We know that the consolidation of retail is already happening. It’s going to continue to happen as the economy continues to sputter, certainly from the retailer perspective, although I was on the manufacturer’s side for most of my career, on the retailer side things like BOPUIS and direct to consumer, that’s going to accelerate. If it wasn’t already, now COVID is really going to accelerate that to another level and at the brand level, it’s really understanding that brands are going to have to change. Everything that we knew and learned and what was working has to be reevaluated at this point and lastly, the consumer itself like you said, an amazing amount of new behaviors are going to come out of this. Go on to the next slide if you could Andrew.

David VanderWaal:
It really comes down to … the upheaval has caused all this change, this volatility, this uncertainty, this ambiguity and consumers are pretty scared and they’re very scared of retail. So, that’s going to lead of course to more online shopping, already the advantage of convenience of the online but at the same time, they are looking for a way to have a different retail experience and I think that’s the real challenge for all of us and yes, I know the main topic today is AR and VR but it really is broader than that. It’s recalibrating everything about the retail experience for this new consumer and that’s the challenge.

Andrew Catapano:
I think you’ve hit it, dead on there Dave and thank you for grounding us because while the topic is about AR/VR and I’m going to jump to the next question about kind of the tests and what have you seen, how do you think main street shoppers are ready to fully embrace the virtual reality but I think you’ve nailed it there when you say it’s an end to end. It’s an end to end of really understanding from digital transformation to the four walls, to virtually connecting, to maintaining our human experiences, how are we going to rethink this holistically and I’m very insightful and thank you for grounding us on that because that’s what I don’t want to be missed but to your point on AR/VR specifically.

Andrew Catapano:
We had Sean Ludick kind of set us, tee us up with the data and what brands are doing things with VR and AR. Some of our viewer audience goes, “Well yeah, okay I get that or I get this or boy that’s too far past me.” Do you think that shoppers are ready to really fully embrace virtual reality as part of their shopping journey?

David VanderWaal:
Yeah, that’s really the $64,000 question, right, because it is really three-fold there. One, you’ve got the need for retail to change. No question and retail has to be more than rack it and stack it. It’s got to be something that has to do with experience. I think everyone is recognizing that. Secondly, you’ve got now consumers during COVID and post COVID that aren’t going to be browsers and explorers, are going to be task mission shoppers. They’re looking to come in and out and that’ll probably last too. So, that’s almost like two ends of the spectrum. You want to create experiences at retail but at the same time, you got a consumer who’s very task oriented.

David VanderWaal:
Then, thirdly, you’ve got this new need for touchless retail and we already had kind of a … my 25 years around retail one of the things I learned is that all these elaborate displays that manufacturers create are oftentimes unused because people are passive when they go into stores and they don’t like to touch buttons, they don’t necessarily like to engage that way. Now, with the COVID, you’re not going to have anybody, wanting to touch anything. You got to mix all those three things together and determine okay what could work and obviously, AR could be a way in but the problem with AR like Colan mentioned earlier, the experience has to be great.

David VanderWaal:
I mean first and foremost, it’s got to be great for the consumers to start using it but I’ve lived through a couple of failures at retail, in stores with experiences that just weren’t working right. I mean if it can be broken at retail, it will break. I mean literally you can have a store perfect and have a rep in there, cleaning the store. The display or the experience works perfectly and a half hour later somebody does something to it and it doesn’t work. So, AR, it’s going to be a challenge in that respect because you’re going to have millions of consumers going through, trying to figure out how to use a hardware which they’re not that familiar with to start with and then you got to make sure it’s completely error-free. If we can get there, that obviously would be a great solution for all of this.

Andrew Catapano:
That’s a great point and I think Colan did allude to … of course the hardware is only as good as the content on it right and then you’ve got … as the developers continue to make this great content and continue to push that out and to your point, the experience on top of that content needs to be genuine, authentic and experiential. So, I couldn’t agree with you more, so the way to answer that question is yes, I think they’ll be ready when it’s ready.

David VanderWaal:
Yeah and we’re going to need to do … I would recommend anyone that, take it with testing, take it slow make sure that you’ve done field testing with the amount of technology we have now, it makes a ton easier to get retail shopper feedback than ever before and that’s really what the slide is speaking to, make sure that you have built this from the consumer back and not the manufacturer or the brand forward.

Andrew Catapano:
Well, and I think unless you want to keep doing it or talking to it, unless we’ve covered it but the kind of hesitation I think you’ll see shoppers will have in the virtual experience and before they fully embrace both and I think Colan explained the difference between virtual and augmented reality, I’ll just deem it and I’ll coin it mixed reality, what can brands do to help overcome these obstacles? You started touching on it a little bit with testing it and maybe doing in a target demographic, maybe doing a focus group, maybe playing with it a little bit but do you want to expand on that at all or do we feel like we’ve answered that?

David VanderWaal:
Well, I think like anything in marketing, I think it’s, don’t force feed it. In other words, look for the natural fit, the organic fit, the one that the consumer would see it and do it naturally anyway. So, a lot of the flavor of the month technologies that have been used at retail often are just because it was cool but it really didn’t serve a need and in the end, well, for example, the reason that we saw earlier, furniture is right at the top of the list and frankly, the category that I used to market appliances, with return rates up in the range of 6%, they are natural for something like AR but we can’t force feed it and that I think will help acceptance, as well as the testing.

Andrew Catapano:
Well, so the question came in and I’m not going to … my mother watches this show religiously and of course, as a Jewish mother of a Long Island Jewish Italian, she thinks I’m just the best thing in the world but we’ve all seen the Geico commercial where the mother, talking to her son and she says, let’s get on the Facetime. My mom told me the other day, she’s like, “What’s the TikTok? How do I get on the TikTok,” exactly, so that begs the question today, Dave, is what do we do with non-millennials and non-gen-z and some of the people who aren’t maybe as savvy in the technology and we had a customer question, do you think we’re leaving them behind, they shop, my mom knows Chico’s brand real well, right? Are we leaving them out and what can we do to help them adopt this new technology and thoughts there.

David VanderWaal:
Yeah, great question. I think that’s really at the heart of everything because the technology curve is always going to be early adoption mass stream and then finally late adopters and it’s usually going to be by generation and my kids I know are extremely proficient at using every piece of the technology that’s built into their phone but certainly my mom isn’t and she still buys things and so, we kind of have to have different solutions for different generations. I mean, I’ll give you an example, we had … even as late as two years ago, we had a lot of consumers who didn’t even know they had a QR reader that was built into their phone. So, at LG, we had an idea that hey, we’ve got these dead appliances on the floor.

David VanderWaal:
People want to see how they actually work and we advised our retailers, let’s put a QR code so you could get a quick 30 second bit piece of video content right on your phone. What we realized was a lot of the shoppers didn’t even know how to use a QR code and even if they did know what it is, they didn’t know that they had a QR reader built right into their hardware. So, I mean that’s like where we’re at, there are a lot of people still out there. So, we have to figure out, “Okay, for all these different areas, generations, what’s the right technology solution,” but certainly the largest buying generation at this point now is millennial on every category, including even durables.

David VanderWaal:
That’s your future as a brand marketer anyway, so anything we can do for millennial and Gen Z and AR, it’s great. We just had a terrific personal experience. Grace did a super fan concert that was driven by AR. She was on her tree house but 10 lucky fans got to experience as if they were in the tree house with her and at the same time Grace was getting the feedback from those 10 fans who were all remote so, it really felt like a true experience and it was phenomenal. If we could duplicate that kind of thing at retail we got a winner.

Andrew Catapano:
I could not agree with you more and I tell you Dave, we could get off topic all day but you brought up QR codes and how do we introduce certain technologies to certain generations and ease them in and find the right one for them. You are dead on the money and for some of our viewer audiences here, let’s just tell them because you went through that point, the QR code is now native to the operating system on both the android and iPhone devices, right? It is embedded in the camera app and it’s a point-and-click situation, which is why we’re seeing the resurgence of the QR code technology because before you had to download the app and no one wanted to do that.

Andrew Catapano:
Now, both versions of the phone, open your camera point it at QR code, you got content. You got experience.

David VanderWaal:
There it is. I mean you just nailed it. That is a fact but yet, there’s many, many people that don’t even know that and now, we’re expecting them to figure out some kind of augmented reality but again, I think for the right people who are a little bit more tech forward especially with like appliances, I mean it’s a natural there’s a business reason to do it. There’s a consumer reason to do it, let me see how might this appliance will fit into my kitchen. Do I have the right width? Do I have the right specs to make it happen? There’s all kinds of great opportunity there.

Andrew Catapano:
Unbelievable, you’re exactly right. Shifting back because, Dave, I feel like I’ve got to meet you in the intro of the show and stuff and we’re getting … I’m just enjoying talking to you. I’m forgetting the camera is here and I got to get myself back on track because I consider, it’s both being in this … you, a veteran in this world, me, finding my way through it as the SVP of marketing. I’m telling you, I could sit here and talk to you all day but to get us back on track on the AR/VR, to stand out at retail and opinion, let’s just get to it, what’s the golden ticket? Do you feel there is one and do you feel like there’s one thing you want our viewers to leave with, about AR/VR at retail, what is it?

David VanderWaal:
Boy, I’d probably go back to something I said earlier, make sure you’ve got it working, error free. I lived the 3D experience on television at several of our retailers, which I won’t mention but it was a disaster. We were trying to demonstrate the capabilities of 3D TV at retail and across the board, every manufacturer, every retail, it was a botch and so, my number one recommendation would be make sure this thing is retail proof and just test it.

Andrew Catapano:
I do want to remind my viewers of something you said because Dave, I’m not sure if that was in the script or whatever, use the right technology for the right demographic. I think that to me is a key point too and one of my favorite takeaways of what you said. So, I’m going to end it here with one more question, Dave because of all your experience, all your knowledge and all your know-how and I’m telling you, I feel like the young Jedi here learning from the master. I will tell you that retail has changed. We know we’re in a new normal. We know we’ve seen … we’ve seen some amazing things and you’ve been part of some amazing things with a household brand, right?

Andrew Catapano:
What is the next two, three years, taking the first part of your conversation, let’s leave the AR/VR world or combine it into your last answer, it’s a holistic end-to-end approach to embracing the new normal and the new retail. What is this shopping experience going to look like in the next two to three years and in your opinion, what’s going to be left behind? What’s the shiny thing in the room that we say, “Let’s leave that in 2020,” but this is really what the legacy is going to look like?

David VanderWaal:
Learn you must, Jedi, learn you must. Sorry about that. No, I think it’s really leveraging the power of the physical and I think Colan said it earlier. I mean, we crave physical connection as a human being and although we’ve come a long ways virtually and we continue to advance technologies that make that closer and closer, there are still things that cannot substitute for something physical. Particularly in considered purchases where the risk is high, both in terms of currency and in terms of social, like a durable, something that costs more than $500. I think our manufacturers and our retailers have to come together to really reinvent retail and take advantage of the one thing that the Amazons of the world cannot do and that is have experiences.

David VanderWaal:
The experiences could be varied but the rack it, stack it convenience let’s say, of brick and mortar is just getting left behind.

Andrew Catapano:
I could not agree with you more Dave. You’ve been amazing to talk with through this. I believe that now, I understand connection being vested in a brand and understanding that experience drives the customer decision making process and what are we going to do in this new normal to augment, replicate the in-store, support the physical four walls and what are you going to do to adapt to that, that’s the legacy that we’re going to take in a 2021 and I could not have said it better. Mr. VanderWaal, thank you so much for your time. Now, I’m going to go home and watch the Star Wars original trilogy because that’s what I’m going to do for the rest of my day. Thank you getting me in the mood for that and it was an absolute pleasure with your time today and I hope we can have you some time back on The HypeHour. Thanks Dave.

David VanderWaal:
Okay, Andrew. Thank you everybody, see you.

Andrew Catapano:
Ms. Campbell, I don’t know. I don’t know who had the better guess but we’ll call it a draw, they were phenomenal today.

Kelly Campbell:
I don’t know we were competing. That’s awesome. I mean such great insights, so many little nuggets. I don’t even know where to start but I learned so much today and two amazing experts in this area of VR, AR and even just retail and within the industry, it’s awesome so I’m-

Andrew Catapano:
You know what though, as we finish this out with the experience of doing whatever and Kelly, we’ve known each other for a long time. I will tell you, part of doing this show is what you guys just saw. The authenticity, we get to do this but I would have never have spent as much time with a Colan. I would have never been able to do that with a Dave, right? That experience that I just had and that experience we were able to bring to you that, I’m sorry we can’t be here physically, we can’t touch each other but part of the HypeHour and part of what BDS is trying to do in this show is bring that experience to you that you could not have had anywhere else and I’m thankful that … if there’s ever a silver lining on this COVID, that’s it.

Andrew Catapano:
That’s the ability to make these connections and to bring this media that we never could have done before and I’m just thankful. I’m thankful even though, I got to wear this. It’s worth it to meet two fine individuals like that.

Kelly Campbell:
I think it’s great. You make such a valid point. It’s all about connection. We’ve said it before, we’ll say it again. Everybody wants to feel that connection so even though we’re not all in the same space right here, we’re doing it virtually. I mean, this is essentially what it is, right? We have our community here on the HypeHour. It’s just been awesome, it’s been a great show. So, I hope everybody really enjoyed it. Of course, if you are interested in learning more about this space and even talking more with some of our experts about how we can you know reinvent retail and redefine it together as one community of experts, we’re ears, we’re all ears here.

Kelly Campbell:
So, would love to … just ping us, follow us on our social media platforms, anywhere you want to connect with us, feel free to send us a message.

Andrew Catapano:
I love doing this and in this final minute that we’ve got here, Kelly, I just want to remind everybody, listen, it’s been a tough six months. It has been challenging in a lot of ways. Colan even mentioned he’s trying to … as he does all of his awesome duties at Facebook, he’s now trying to figure out how to teach school at home, right? Dave, I’m sure is dealing with a lot of those issues. I’ve got a two year old son at home. No longer can I have a caregiver to help because my wife is too concerned about what will happen. So, there is a reality, we like sharing this but I want to tell everybody, we’re Americans.

Andrew Catapano:
We’re resilient, we’re humans, we’re going to get through it and as Winston Churchill said, one of my favorite quotes, “When you feel yourself going through hell, just keep going.” All right, it will end and we love to be a bright spot in your day and with that, I’m going to end it with this. We’ll see you in future episode.

Kelly Campbell:
Awesome. Thanks everybody.

Andrew Catapano:
Don’t forget to let us on sign in.

Kelly Campbell:
Bye.