In its second-largest acquisition, Amazon buys the company for $970 million.
3-D technology pushes online retailing into a whole new dimension. Reatilers are finding that the effort required to present 3-D images pays off.
When Vermont-based cataloger The Orvis Co. wanted to try out 3-D technology, it wasn’t sure what results it would achieve. And so it took a cautious approach and had modest expectations. “Our approach was: Let’s not hurt our business,” says John Rogers, Orvis’s director of e-commerce marketing.
Orvis applied 3-D technology to 100 items starting in late October, primarily fishing reels and vests. Not only did the 3-D rendering not hurt Orivs’s business, but it helped enough that the company is now expanding use of the technology to other products on its web site. Orvis will soon be showing luggage, clothing and other items using the 3-D and zoom technology from PointCloud Inc., provider of the 3-D technology for the reels and vests.
Clearly, Orvis is hoping to get a boost in sales when other products are displayed in 3-D. Rogers won’t give specifics; sales boosts, he says, “were all over the place.” The best products achieved increases of 60-70%. “You won’t see that lift across the board,” he cautions. But he adds: “We wouldn’t be going forward if we were not seeing something good.”
Orvis is part of a trend toward rich media in all aspects of Internet retailing. From e-mails that incorporate HTML graphics and videos to web sites such as Orvis, gifts.com, Eddie Bauer and eLuxury.com that are using 3-D images, retailers are finding that richer media produce greater sales. Some observers estimate the rich-media market is $2 billion a year now and will reach $12 billion in 2005. “There is a huge opportunity for 3-D technology in both business-to-business and business-to-consumer,” says Paul Ritter, managing director of retail e-commerce consultants Strategic Research Advisors. “One of the primary challenges of the Internet-based business models has been overcoming the lack of tactile experience that consumers get when they are in a store and can actually see, touch and feel the products.”
A measure of the size of the market and the enthusiasm with which some retailers will adopt 3-D comes from the experience of 3-D vendor Scene7 Inc. Scene7 started life as furniture e-retailer GoodHome.com. It developed technology to allow shoppers to view furniture in 3-D. When other retailers asked GoodHome if the company would license the technology-and the prospect of profits as an e-retailer grew even more illusive-GoodHome exited the e-retailing of furniture and entered the selling of 3-D technology.
Last year, GoodHome joined a market of 3-D vendors that includes PointCould, Rich FX Inc., Kaon Interactive Inc., Viewpoint Corp., Virtue 3D, and My Virtual Model Inc. Furthermore, Macromedia Inc. and Adobe Systems Inc. are offering updated programs that run 3-D. And Intel’s new P4 processor chip incorporates advanced 3-D functionality.
But 3-D is still in its infancy. While some of the leaders in e-retailing, such as Lands’ End, Victoria’s Secret and Dell Computers are using some form of 3-D, only a tiny fraction of web sites employ 3-D imaging and even those sites display a small portion of their products in 3-D.
When it comes to 3-D, some experts are cautioning retailers not to fall into the trap that caught them in the early days of the Internet: Just because you can do it, doesn’t mean you should. “Web site design is similar to fixtures in stores,” says Jim Dion, president of Chicago-based retail consultants Dionco Inc. “Some fixtures you have to have to enhance the merchandise and others just get in the way.” Used injudiciously, 3-D can just get in the way, Dion says. “There’s not a tremendous number of products that require 3-D,” he says.
But there certainly are products that lend themselves to 3-D. “3-D makes sense if you have an extremely specialized product, with a high retail value, that aficionados are interested in and about which they want to know everything they can,” Dion says. In that case, “3-D can tip the scale. The consumer gets a high degree of comfort that it’s the product they’re looking for.”
$200 reels and pendants
Orvis’s fishing reels and vests fit those criteria. In the case of the reels, some of which go for over $200, Orvis is selling to aficionados. For instance, Orvis sells a Battenkill large-arbor reel, in which the diameter of the turn mechanism is bigger than on other reels, meaning a fisherman pulls in much more line with each turn of the crank. With a 3-D view of the Battenkill reel, the customer can look at the side of the reel to inspect the large arbor. He can look at the drag mechanism, flip the reel to see where the line goes in and zoom in to view construction details of the handle. “Being able to view this in 3-D helps the customer answer the question: Do I make the investment in a large-arbor reel?” Rogers says.
Similarly, gifts.com, operated by The Reader’s Digest Association Inc., had huge success with a $200 pendant it was selling for Mothers Day. Gifts.com turned to Rich FX to create not only 3-D views of the pendant, but also a scenario that presented the pendant in a little story about mothers and children (see box). “We were looking for some sort of technology that could relay a sense of emotion,” says Dan McManus, vice president of marketing and business development for gifts.com.
What the industry refers to as 3-D isn’t precisely 3-D. The source photos for 3-D images come from traditional 2-D photographers. When they are taking product pictures for a catalog, photographers take numerous photos that the retailer can use for 3-D purposes. The photographer sends the photos in an electronic format to the 3-D processor, which then processes the photos to create a 3-D-like image by displaying numerous views of the product.