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Episode 70

Beck Besecker - 3D & the future of retail

Posted on: 06 Nov 2023

Beck Besecker is the co-founder and CEO of Marxent, the 3D enterprise platform for retailers and manufacturers.

In this episode, we talk about 3D product design and how it factors into the future of retail. As Marxent are mainly focused on 3D solutions for the home and for the office, the discussion largely takes place in this context; we discuss the evolution of 3D design, with home being one of the slowest adopters of modern digital technologies, as well as the considerations and challenges of adopting 3D.

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Transcript

“If you were going to buy a car virtually, you wouldn't want to walk through a virtual parking lot to look at cars. Right? And I don't think walking through a mall virtually is really the experience consumers are looking for either. I think it's going to be much more personal.”

Intro:Welcome to the Agile Digital Transformation podcast, where we explore different aspects of digital transformation and digital experience with your host, Tim Butara, content and community manager at Agiledrop.

Tim Butara: Hello everyone. Thanks for tuning in. I'm joined today by Beck Besecker, co-founder and CEO of Marxent, the 3D enterprise platform for retailers and manufacturers. In today's episode, we'll be discussing 3D product design and what it means for the future of retail. And welcome to the show, Beck. It's a pleasure having you with us today. Do you want to add anything or should we just jump straight ahead to the questions?

Beck Besecker: No, thank you for having me. It's my pleasure. Thank you.

Tim Butara: So let's kick our discussion off with some background on 3D design. Can you tell us more about it and about its history and evolution?

Beck Besecker: Sure. CAD has been around for a long time, or computer aided design. What's really the big opportunity of transformation in the market is that 3D is now accessible to web applications. The ability to display a high quality 3D twin of a product on a website, on an ecommerce site, in search, in a promotion is now possible. And that's really matured over the last probably five to seven years, where game engines like Unity and Epic and Babylon and others have made it possible to render a lighter weight 3D model. It's often called a runtime model or a low poly model.

And historically, 3D models were really sort of, they looked cartoony and sort of were intended for games. And now the ability of browsers and devices to display a higher quality model in a browser makes it possible for everyday retail applications to take advantage of 3D. That's really the big sort of sea change in the market in the last five to seven years.

Tim Butara: And I'm guessing that this turned out to be super relevant with the onset of the COVID pandemic, because of what retailers have had to experience and the huge impact that they've been dealt.

Beck Besecker: It's not too dissimilar. Let's take a– I'll use an analogy. So – airline tickets, we used to have to call a professional. And that professional on the other end of the line had a desktop tool that he or she would use to book your tickets. And then the web came along and made it possible to expose those applications to consumers. And then they made it easy and intuitive and fast. And now all of a sudden, we all book our tickets online.

That transformation, while it seems obvious, in a vertical like airline tickets, that same thing is happening to 3D. It used to be that 3D experience was, you know, something like AutoCAD or some desktop application and you were a professional designer and you're working with a CAD tool.

Imagine designing a kitchen or a bathroom. You'd go sit in the store and you'd have a person highly trained on a piece of software. They had to download it on their desktop. You know, all the assets ran on the local C drive. It probably had a big processor in order to sort of show all these assets. Now, you can take something like a kitchen planner or a decking planner or a furniture planner, put it on a browser, it's easy to use, it's drag and drop. It's all intuitive. And so now, all of a sudden, your average homeowner can build a kitchen pretty easily.

And there's all this sort of AI and automation where you can do things like automate the generation of a kitchen just from a photo. And so all of a sudden, now 3D is longer just a tool for professionals. It's a tool for everyday homeowners who really want to take control of their shopping experience or their design experience.

And so, yes, COVID had a massive impact and probably accelerated the market by three or four years, because there was all this latent demand and people couldn't have people in their house and they were willing to invest some time. And, yeah, we saw that our business more than doubled during that time, and we haven't seen a drop off. So I think 3D, as a thing that we all do on the web, is now here to stay.

Tim Butara: And how valuable is it for businesses to develop a comprehensive 3D design strategy rather than just one-off projects or applications of 3D?

Beck Besecker: Sure. So I'm going to speak in retail because that's where we focus at Marxent. So we work with La-Z-Boy, Macy's, MillerKnoll, some big manufacturers and retailers that typically have, or almost always have, highly configurable products. So kitchen, bath, decking furniture, office and closets. So these are all categories where you just can't buy the thing. You've got to combine multiple items together into a single scene. They all have business rules and connect together.

And so in our world, 3D is like a utility that these retailers use to actually sell their product. Like, it's very hard to buy an office chair at MillerKnoll unless you can actually configure the office chair and then put it into the cart. And so there are elements of 3D that are really simply configure, price, quote, tools that used to be used by a pro and now are available to a homeowner or a business owner so they can do this themselves.

And a lot of these transactions are moving from the physical store to online. And so if you can't work with an associate sitting in a store and do your design and you want to do it at home, this is the only way you can really do it. And so all of a sudden, the big moving parts are: one, 3D is now available web, and then people want to do this at home. And stores are looking for ways to engage consumers before they get to the store and online.

So it's central. I mean, it's becoming– things like online kitchens and furniture, still single digits in terms of the percentage of sales volume online, but it's going to grow very quickly likely. Home is kind of the last category to get online, behind other categories, like books and shoes and fashion. And so now you're seeing these big $10,000 transactions actually move online, which is pretty exciting.

Tim Butara: Yeah, it's interesting because it's something – similar to shoes and clothes and stuff like that – it's something that you'll want to be comfortable with for a longer amount of time. And it's just, a home or a kitchen or something like that, it's intended, its use frame is much more extended than just simply for shoes. So this is probably one of the main reasons why it's, as you just pointed out, one of the last to move online, because it's one of those cases where you really need to experience it if you want to live in the home for like maybe 10, 20 years. But I'm guessing that all the evolutions in 3D design are bringing the actual experience closer to people who are just experiencing it on the web.

Beck Besecker: Yeah, it's a broad range of use cases. It could be something as simple as visualizing a product in your home using augmented reality, like a hologram, you can see it. And then that may be a few hundred dollars transaction all the way up to $10,000 or $20,000 kitchen or deck.

But it's not an either or. It's not like, okay, homeowners can do this and they just do it on their own. What really happens is, if you think about that, you mentioned that these are like what we call high consideration purchases. There's quite a funnel. Like, you may spend 12 to 14 months in the purchase funnel. You may only ever redo a kitchen one time in your life. It's a several thousand dollar transaction. You want to be comfortable.

And so it used to be, if you wanted to do this, you might have to go to Lowe's or a place like that and sit with a professional, and you felt like you were trying to cram in this transaction in a three hour visit. Now, a homeowner can spend months at home, which they were kind of doing already, just not without good tools and researching and evaluating. They can build their project. They can share their project.

And then these tools, just like a video game, have collaboration capabilities. And so I could work on a project for several weeks, and then you and I, if you were the designer, I could share my project with you on a Zoom call. Right. And you can edit the project or make recommendations, or we can change the wall color together. And so all of a sudden, it's not like this linear path. It's like, the homeowner and the pro can work simultaneously.

And what's also nice for the pros is they don't have to be on a Zoom call to work with a customer. They can let the customer edit a project or change a project or annotate a design. And so they could work with a lot of customers at once instead of one on one in person.

And so it's really all very new and exciting, but it's really changing kind of, sort of how retailers think about, well, I can engage them 14 months out and watch them matriculate all the way through the sales funnel. And we can actually track like, okay, we know if you spend five sessions and more than an hour in the planner, you're ready to buy. So you can start to sort of preempt the customer, looks like you're doing a great job, do you need some help? Would you like to talk to a designer? So it's creating all these CRM, remarketing opportunities as well.

Tim Butara: The way it sounds to me is it improves the experience of both the customer as well as the salesperson, which is exactly the thing you want with something like that. So what would be the main considerations as well as kind of the main pitfalls to watch out when you're incorporating 3D into a content strategy?

Beck Besecker: So I'll use another analogy. Let's say you're going to buy a CRM system from, say, Salesforce. And you're a big enterprise, multi billion dollar company and you got, you know, the tool might be used by marketing, e-com, merchandising, store operations. There could be all these stakeholders, right? And maybe it had ten divisions, right? This part of your organization.

You wouldn't buy five different CRM systems. You'd buy one CRM system that would have a single view of the customer online and in-store that everybody could access and have a single point of truth to understand the consumer's behavior and the ability to activate opportunities with that consumer. So everybody understands that now if you're buying a CRM application, right.

The same thing holds true for a 3D PIM or a 3D content management system that if you're going to create a 3D asset of say, a chair or shoe or handbag or whatever it happens to be, that 3D asset is going to be used in planning tools, augmented reality, search, visual merchandising – like, you can render a product and use it for photo content on your site. It'll be used to create content that you might provide vendors so they can put information on the product page.

But it's going to have all these use cases. And so you want one single point of truth for that 3D asset so that it goes through as it changes and updates and gets modified. You may use it in– like, imagine you're a big CPG, like a Procter & Gamble or Nestlé. Like, you might use 3D to test different labels. And so you want one single platform that can serve all the use cases and have a history of the object as well as all of this metadata.

So that's what's happening right now is, people are beginning to understand that, early in 3D, somebody might call us and say, hey, I'm looking for a sectional configurator or I'm looking for an AR app. But as soon as you start to think about multiple applications, multiple channels, multiple divisions, you're like, oh, I need more than an app, I need a single platform that can serve and grow and scalable and extensible.

That was really the vision of our company, was to be the 3D PIM, or 3D content management system for the home vertical and potentially beyond. But it took a long time. It's really even the last two years that we're starting to hear that language from buyers where it's no longer just the marketing person calling, it's like the enterprise architect who's calling and saying, hey, I have all these stakeholders to serve, will your platform support it? So that's the biggest takeaway, or that's the transition that's happening in the market, is this is, just like buying a CRM system, you're going to need a 3D platform.

Tim Butara: This really ties back to what we talked about earlier, about having to really incorporate 3D into your whole strategy, not just using it in a one time manner. Because if you're going to be using it company wide, there has to be a significant investment and it probably only makes sense that you would incorporate it in a more full scale manner.

Beck Besecker: When I sort of close my eyes and think about, okay, what is e-commerce going to look like seven to ten years from now? Well, we have the saying, everything is better in 3D. Right now, if you go to a product page, they have a picture of the product. Maybe you have multiple angles of the product. You probably have a picture of the product in context, like a background, maybe multiple different versions. Or you may show the product in multiple colors or from different angles. We're desperately trying to create this really nice product page that can all be replaced with a single 3D model of that product.

And so when we think about what e-commerce looks like, we imagine an area where it's just a 3D model on the product page and it's fully articulated, an average consumer wouldn't know that it's a 3D model, it looks real, I can download it, I can put it in AR, I can share it. So all of a sudden, once it's in 3D, it becomes transposable, I can move it and put it in the context of a buyer myself as a user. I can make it part of another application, I can make it part of my own collection. So all of a sudden, 3D really changes the dynamic of a product page.

Now, the reason that's not happening today is, the quality of a 3D model, like in real time, could still look kind of cartoony and it's not the best representation of your product, but that's now changing. Like, WebGL, what they call WebGL 3D models can now look hyper real or approaching real.

So if you think about it in that context, every single product– and also there's performance, right? I mean, once you have these models are a little heavier weight and so performance on the site is going to have to catch up. But if you think about it in that context, it's like, wow, everywhere there's a 2D asset, it's going to be replaced by a 3D experience. It's like, okay, that's a huge, huge opportunity. And it's sort of working its way through categories, like chairs and tables make sense now, handbags and shoes and cars and toothpaste and shampoo bottles and all those long tail categories will essentially be part of that experience.

Tim Butara: So do you expect that we'll soon see the tech investment in 3D go from just being an IT cost to an actual profit center?

Beck Besecker: That's a great question because there are simple utilities like product configurators, right, which is kind of a cost of doing business and might be considered a cost center. But if you work in a retail that has like a design service, your design team is probably using some kind of 3D planning tool to engage with consumers. And so that's kind of a combination, right? It's a utility, but it's also like, you know, you might have your sales if you're a design-centric retailer going through these tools.

So those are all sort of like utilities, cost of doing business, sort of just part of the typical workflow. Then there's what if I take those same tools, like a planner, and expose it to a homeowner? And so now you start to think about, oh my gosh, this is a customer engagement tool. You can engage people earlier in the sales cycle, they start to sell themselves. You can remarket. Now, it's a profit center, where you're unlocking your revenue.

And so it's like, there are both, okay, this is an IT cost of doing business workflow tool. And then there are these marketing promotions, like Macy's, last year we did 50,000 rooms online. Right. And of course not all of them bought. So here's a huge opportunity to remarket and advertise to those shoppers. So that's the exciting part about 3D. There are net new revenue opportunities emerging as well.

Tim Butara: So this actually leads perfectly into the final question I have for you today, Beck, and one that we already alluded to in the intro. So it's about the future of retail, and how is 3D helping to usher in this future of retail? And also, are there any other related technologies and trends that are relevant here that we should highlight?

Beck Besecker: Obviously there's a lot of stuff out in the ecosystem, talking about Metaverse and these sort of transitional consumer experiences. And I'm still trying my own head, trying to work out what is the real opportunity for a Metaverse experience? There are brands like a Nike or a Gucci or something that's like an aspirational brand where if I'm an avatar and I'm in the Metaverse and I attach my avatar to Nike or Gucci or Chanel, that makes sense. Right.

But in other categories like home furniture and kitchens, I'm not sure, how do they translate the same way to some of these opportunities? There's a lot of activity out there right now around creating a virtual walkthrough of a retail experience. And to me, I'm not sure those are the right answer either. It's kind of like, if you were going to buy a car virtually, you wouldn't want to walk through a virtual parking lot to look at cars. Right. And I don't think walking through a mall virtually is really the experience consumers are looking for either.

I think it's going to be much more personal. In other words, what I think is going to happen with 3D and retail, is that consumers will be able to create their own physical space or recreate their own physical space digitally. In the future, when you buy your house, they'll give you an exact copy of your house in 3D that you can go online and navigate. Like, that will be actually a part of purchasing your home.

And then once you have that space, you'll go out into the Metaverse or these other 3D experiences or stores. Imagine you go to a store and you hit a QR code on a chair and you get home and you got a 3D copy in your 3D home. Right. So I think it's going to be more about creating your own digital space that you can manipulate and engage with, and you go out into the market and grab things. So I don't think it's going to be so much like we're all going to go out to retail experiences and engage in these. I think it's going to be very personal.

And that will start to become– imagine you're a contractor, and I engage you to do a project at my house. Like, I'll send you my 3D house. So you can send it back to me with your proposal. I think it'll be more unexpected than just, hey, let's walk around in a virtual mall. That's where I see the future going.

Tim Butara: Yeah. Because with the changes in innovation of the technology, it only makes sense that to take full advantage of these changes, you would also have to completely shake up the ways in which you use them. Right. If you're using new technologies in the same kind of old fashioned way, then you're not really getting the advantage that you're supposed to be getting out of them.

Beck Besecker: Well, that happens. I mean, if you go– I'm old enough to have been here at the dawn of the Internet. My first company, back when on Amazon was starting, and if you look at all those version one e-commerce experiences, we were emulating physical stores, right? How the taxonomy of the catalog and sort of how you engage with the website. And of course, all that has dramatically changed. We figured out better ways to get it. So I think it's natural, right? First thing you do is you copy what you have today in a new medium and then you start to innovate from there.

Tim Butara: Yeah, just like computers were initially, just a much more efficient way of documenting stuff. So, yeah, that makes perfect sense. Well, Beck, this has been a great conversation. I certainly learned a lot of new, interesting stuff today, and I'm excited to see where the future will take us and what your predictions wil–l I mean, when they'll come to prediction, let me put it like that. So just before we wrap up the discussion, if listeners would like to reach out to you or learn more about Marxent, where can they do that?

Beck Besecker: They can go to 3dcloud.com.

Tim Butara: Awesome. I'll make sure to include that, the link to that in the show notes, and Beck, thanks again for joining us. It's been great.

Beck Besecker: Thank you. Thank you.

Tim Butara: Well, to our listeners, that's all for this episode. Have a great day everyone, and stay safe.

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