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Augmented Reality: 6 Use Cases for eCommerce & Retail

Posted by Darpan Munjal On December - 5 - 2009
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There hasn’t been a lot of game changing innovation in the retail and eCommerce space lately. However one of the technologies that has a significant potential in this space is Augmented Reality. Although this technology is still in infancy, it is good to think about the potential opportunities because it is likely that next few years will see more and more viable applications within the retail space. What exactly is it? It is a term used for live view of a physical world environment whose aspects are merged with virtual content, creating a mixed reality. Users can view it coming to life on a computer screen by holding an object or a marker in front of the camera or shooting it with a mobile device. If that sounds too technical, watch this video for an illustration of this technology:

You are probably thinking it sounds cool, but does it have any practical or commercial uses in the retail and eCommerce space? Several retailers are already testing ideas with this concept. Although none have been widely successful so far, I see too major catalysts that could help take this technology mainstream.

First, the latest generation of mobile phones such as iPhone and Droid have all the necessary ingredients to help take this technology mainstream -  a compass and GPS to plot position, 3G mobile internet access and high resolution cameras. Second, the much anticipated launch of Microsoft’s project Natal can take this technology into the households. If you haven’t read about Project Natal, you must watch this video.

This is all good you say, but what about retail and eCommerce? I think this opens up several opportunities for multi-channel as well as online retailers. This technology has the potential to bridge the gap between the offline and digital world in a way that was not possible before. Ability to touch & feel products in the online context or the ability to see digital content such as product reviews in a physical store are all possibilities that are very real with this technology. Here are 6 use cases, along with some examples that would help visualize some of these opportunities:

1. Touch & Feel products while shopping online

One of the key deterrents to online shopping is the concern that users are not able to touch and feel the products. This is a concern especially for apparel items where looks or fit play a significant role in a shopping decision. How about a virtual fitting room where shoppers can see the garment on them, without actually trying it on.  The idea is to take some of the mystery out of buying clothes online — will it fit? Will it look good on me? — and let shoppers see how the garment might look on them, albeit on a computer screen.

Tobi has made a decent attempt at a virtual fitting room concept. Although it needs a bit of improvement to be able to see the exact fit and look, this is an excellent start and definitely has good potential for online apparel retailers.

Rayban has also done a good job in applying this technology so users can virtually try different sunglasses in front of their computer, as if the computer screen was a virtual mirror.

The common theme in both of these examples is that you get an online equivalent of taking your friends to the mall to check out some new products, all from the comfort of your own PC. Still not impressed? Here is another video from Cisco for more inspiration around virtual fitting rooms.


2. Bring the product to life in user’s context

Imagine if you are shopping for an item, and you are able see what’s inside the box in a life like 3D view. This is what Lego did in their stores by installing Augmented Reality kiosks. You can hold up a box in front of kiosk and it shows you what the set would be like, assembled. Not all retailers can afford setting up these AR kiosks in their stores, nor do I think the investment would pay off anytime soon, other than generating a coolness factor. However I do think leveraging cellular phones as an alternative to Kiosks could open up significant amount of opportunities that allow customers to “look inside” a box.

If you sell Furniture or Kitchen counter tops, you should take a look at how Ikea is using AR to try virtual furniture within the context of your own room! No more guessing about whether that mocha coffee table will go with that leather couch you already own. See it virtually, in the context of your own room, without leaving your house.

Another AR tool generating buzz right now is the USPS Box Simulator. Of all the examples I mention, this one has the most practical implementation of augmented reality that creates value for users. Basically, it allows consumers to virtually see what size box their shipment will fit in without buying the box

3. Bring digital product content to offline world

You are shopping in a physical store and would like to know about customer reviews, installation videos or other rich content that would help influence your decision. What if you point your iPhone at the product, and you immediately see all the digital content (reviews, videos etc.) layered on top of that object?  Layar recently launched a new Augmented Reality browser for iphone that seems to have significant potential in this space. The camera lens identifies the product, then serves up the contextually relevant digital information layered on top of the physical product.

4. Product Finders and Store Finders

At its simplest form, you could use an AR application such as Yelp Monocle from your iphone to find different type of stores around you.  This is a relatively straightforward application of augmented reality. However, imagine if the same concept could be applied to product finders within a store. You are standing inside a Bestbuy store and your iPhone app highlights all top rated products in the store which are currently on sale for more than 40% off.   Basically, the concept is to add a rich context by highlighting only the products that appeal to you. Whether you are shopping for a cocktail dress or looking for top rated toys for your kids, your mobile device  could make this a personalized experience by highlighting the products and the shelves that match your interest.  The below video from Thundre shows some additional product finder opportunities.

5. Interactive Product Catalogs For multi-channel retailers such as Bestbuy or Sears, this could be a significant opportunity in future. Allowing users to see a 3D rendering of the product from a paper catalog could bring this channel much closer to a engaging, digital experience. I would love to see a Sears Wishbook catalog where the toys come to life using this kind of technology:

6. Interactive Marketing

Several retailers and product manufacturers have started testing this concept to enhance the effectiveness of their marketing campaigns. Some of the current use cases are very rudimentary but seeing the examples below would help you imagine the future possibilities in the area of internet marketing.

Toy maker Mattel has added augmented-reality technology into a range of action figures released to tie in with Avatar, the forthcoming 3D film. Each toy will come with an iTag – a small plastic card that children can hold up to their webcam. When the card is recognized by the computer, a three-dimensional digital image is superimposed over the card on the computer screen, giving the child the ability to “manipulate” the character or vehicle on-screen by pushing virtual “buttons”.

BMW Mini tested a marketing campaign late last year using simple black and white print ads that would bring the car to life in a 3D view when held next to a web cam.



It is too early to say what kind of impact this technology would have on our day to day lives. I do think a lot of above examples would lose their appeal in some time once the “shiny” effect of this technology fades off. It is important to think about applications of this technology that minimize any extra work from end user perspective, and provide a utility or value that would otherwise not be possible. Even though above examples may sound too impractical or costly to implement, I do think that the stage is being set for a future that would see game changing and practical implementations of this concept in the retail and eCommerce space. Perhaps, the boundaries between offline and online channel will no longer be as rigid as they are today, giving a new meaning to the phrase multi-channel retailing.

Future of Social Shopping – Key Opportunities

Posted by Darpan Munjal On October - 15 - 2009
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Chicago, 2010: Dan is looking to buy a decent home theater system to complement the new LED TV he purchased. Dan doesn’t know much about home theater systems so he logs on to Bestbuy.com where he has setup his online “Media Closet” which tracks all the gadgets and electronic devices he currently owns. Dan is able to find 18 “Audio Gurus” who also have an expertise on the products that are currently in his media closet. These gurus have been voted as the experts by the online community so Dan thinks that he can trust their recommendations. Dan invites one of the experts to view his “Online Media Closet” – which shows the information about the Blu Ray player, LED TV, a Netflix streaming device and a WII console that he would like to connect to the home theater system. The expert makes recommendation for two high end home theater systems that are currently on sale. Dan purchases one of the home theater systems and the Audio Guru receives affiliate points from Bestbuy for his help in the consultative selling.

New York, 2010: It is 11:30pm and Sally is looking to buy a new dress for the upcoming Christmas party. She logs on to Looklet.com, picks up a dress and matching shoes and saves the new look in her profile. She gets prompted by Looklet if she would like to get an opinion from her friends. Looklet displays all her online Facebook friends via Facebook connect . Sally sees that her best friends Nancy and Tina are still online and invites them to give an opinion on the new look. They are able to chat and view the products in real time. Both Nancy and Tina love the new dress but aren’t too crazy about the new shoes. Sally is able to find other “Fashion Experts” on Looklet who have favorited the same dress – and she is able to find better shoes based upon recommendations from those experts.

Welcome to a new phenomenon in online retailing – “Social Shopping”. Read the rest of this entry »

Sears – Winning the crowd by crowdsourcing?

Posted by Darpan Munjal On August - 16 - 2009
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It was about 5 years ago but I still remember when my refrigerator stopped working two days after I ordered it from Sears. It took me more than 8 phone calls to get the situation addressed. I remember calling different customer service hotlines and finally getting a resolution after contacting some internal departments. All this happened when I was working at Sears!! I shared my experience with the appropriate groups in the hopes that others wouldn’t have to go through similar frustration. However, at that moment, I couldn’t help but empathize with the situation of other customers who had no good means to “escalate” the issue within the appropriate internal departments. .

Fast forward 5 years – enter the connected world! I recently visited MySears.com and was amazed at the community involvement! Even though you see customers occasionally venting about product issues and their experiences, what is really impressive is that Sears has taken a bold step to let it all out in the open. They have provided an online platform where Customers are free to post their experiences. This is bold because it demonstrates leadership as well as compassion that Sears not only cares about listening to their customers, they are also not afraid of letting customers openly talk about their experiences online, however negative they might be. Interestingly, Read the rest of this entry »

Online Business Models for India

Posted by Darpan Munjal On June - 22 - 2008
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The stakes are getting high in the eCommerce space in India. As more and more online retailers enter the market, they are driving up the cost of customer acquisition. Although this level of entry in the eCommerce market is good from a long term perspective, the challenge is that most entrepreneurs don’t have the resources or capital to wait for years before they can see some signs of profitability. The good news is that there are still some business models out there, which are mostly untapped. If you execute these well, you can not only create uncontested market space, you can make it difficult for others to compete in the game. These ideas do require some innovation –however, I am not talking about a significant technological innovation – I am talking about innovation in service offerings that can help you leap outside the traditional industry boundaries. I have written most of my articles around B2C opportunities, in this article I will focus primarily on the B2B opportunities within the online space in India.

So what are some of these ideas? Well, before discussing the specific ideas, I want to start with some of the key traits of these business models. Most of the ideas that I will discuss have one common theme – low cost of initial acquisition and high switching costs. Read the rest of this entry »

Is Web 2.0 Overrated?

Posted by Darpan Munjal On December - 21 - 2007
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At least that’s what I felt after attending the Web innovation conference held in Bangalore this week. I don’t understand why folks spend so much time slicing and dicing what web 2.0 means. I could hear some people even talking about Web 3.0 – some of the gifted ones even offered a glimpse into Web 4.0!!  Now, come on! Isn’t that a bit too much? We are not talking about a software release which comes in different versions with a predefined set of features. We are talking about evolution of the internet economy here. Don’t get me wrong – I definitely think Web 2.0 is a beautiful thing and the power of communities has a huge potential for the new economy. But that’s exactly my point – people need to think about the applications of this concept, as opposed to getting hung up around the text book or Wikipedia definitions of Web 2.0. Ok, enough with my ranting – it wasn’t all that bad. There were some decent speakers as well – like Rohit from Techtribe who offered some good insights into the dynamics of online communities.

It would be great to see more businesses in India that are built around the power of online communities. A lot of people feel that online communities may not be a good fit for the Indian culture, but I strongly feel that the communities can be very successful if the right incentives are offered to them.  I am posting the slides that I used for my topic at the conference – “the future of eCommerce”. eCommerce is definitely an area
Read the rest of this entry »

Turning Web Analytics Upside Down

Posted by Darpan Munjal On December - 13 - 2007
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When I first heard about Woot.com a few years ago, I couldn’t quite understand what’s all the fuss about. Since then I have been following this phenomenon closely, and have learnt quite a few things from this small retailer which now enjoys almost a cult like following from millions across the US. Woot is one of the very few sites that has a rare combination of simplicity and innovation – and yes, a great sense of humor!!. Here is an excerpt of a few questions from the FAQ section of Woot.com

What is Woot and who is behind it?
Woot.com is an online store and community that focuses on selling cool stuff cheap. It started as an employee-store slash market-testing type of place for an electronics distributor, but it’s taken on a life of its own. We anticipate profitability by 2043 – by then we should be retired; someone smarter might take over and jack up the prices. Until then, we’re still the lovable scamps we’ve always been.

Will I receive customer support like I’m used to?
No. Well, not really. If you buy something you don’t end up liking or you have what marketing people call “buyer’s remorse,” sell it on eBay. It’s likely you’ll make money doing this and save everyone a hassle. If the item doesn’t work, find out what you’re doing wrong. Yes, we know you think the item is bad, but it’s probably your fault. Google your problem, or come back to that product discussion in our community and ask other people if they know.

What are my shipping options?
Currently, your shipping options are limited. An item can ship if you order it, or not ship if you don’t. We will ship by common carrier and try to stick with the same service for most items.”

I am sure that reading above FAQs probably doesn’t give you a warm and fuzzy feeling about doing some serious shopping from this online retailer. But, it gets better. The site only sells one product a day. That’s right. The product changes every night, and there is only one product available for purchase at any given time. Products are never announced beforehand and can easily sell out in a few hours or even minutes of hyperactive buying and then the users have to wait till the next midnight for the next product to be listed – unless there is a woot-off which I will save for another discussion. The Woot model relies on the elements of simplicity and surprise – unlike the traditional online environment which is focused on expanding the product assortment. It is fun to read the product descriptions, which often mock the product being sold, and the community is encouraged to write negative posts to highlight the flaws in the products being sold.

It takes courage and leadership for an online retailer to be as transparent as Woot in educating the customers about the good things and not so good things about the product being sold. But more than this transparency and sense of humor, Woot has been able to do something that no other retailer has been able to effectively. Woot has literally turned the world of web analytics upside down, and made this analytics information available back to its own customers. Take is a look below at a typical product page, the page contains a sea of analytics information – enough to make the likes of Amazon and Overstock.com turn green with envy and more than enough to turn a casual browser into a well informed buyer. Read the rest of this entry »

The Future of eCommerce – Web 3.0

Posted by Darpan Munjal On June - 12 - 2007
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The other day I visited a website called Kaboodle.com which is an online shopping community where users can build, maintain and share online collections of their favorite products with other users. There is even a style compatibility test on the site where users can see how compatible they are with other users in terms of their shopping habits, taste and style. Since then, I have been thinking everyday about the role online communities will play in eCommerce and then it finally struck me Read the rest of this entry »

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