Episode 2: How using Augmented Reality Can Improve Customer and Employee Engagement
In the second episode of Communications. Transformed. I was lucky enough to make my 8x8 podcast debut. I interviewed a retail innovator from Bang & Olufsen, a leader in high-end consumer electronics, an 8x8 customer, and one of my favorite brands. Simon Silva, Global Retail & Customer Experience Manager at Bang & Olufsen, is responsible for building customer engagement, both in stores and out in the world. The goal is to not only increase customer satisfaction but also to increase sales revenue.
Struggles in Retail Are Real
The struggles in retail are real. Every week there are news stories about numerous well-known brands’ financial woes. Previously strong brands are struggling to attract their once loyal customers. This is happening at a time when the number of great technology solutions available to retailers is at an all-time high. Getting the technology mix right for customers will surely help those retailers who are keen to try new things and move with the times to improve customer experience.
How to Successfully Implement AR in Retail
In this episode, Simon gives us a detailed insight into augmented reality (AR) as a tool for retail, and how to successfully implement it. Not just as a gimmick, but as a way to improve sales and keep customers returning.
At 11:34, Simon provides great insight everyone should learn from—the criteria he used to evaluate potential technology partners. As the complexity of projects continues to grow every year, success increasingly depends on the strength of the working relationship. Simon provides five factors he considers to ensure success after the contract is signed:
- Core competency: Does the provider have the necessary skills to deliver?.
- Execution: Get hands-on with their past projects.
- Chemistry: The moment the contract is signed you are a team.
- Customer-centric: People before technology. Some suppliers lead with the technology and not the benefit it gives the user.
- Demo: Detail the exact requirements for a demo and make sure the demo that is delivered meets them.
Key takeaways (and timings):
- 02:42 – Introducing Simon Silva
- 05:12 – Kicking off an AR project
- 09:46 – Giving customers an effective evaluation tool
- 11:34 – Selecting a supplier fit for Bang & Olufsen
- 22:45 – Early results and success of the project
- 26:21 – What’s next for Bang & Olufsen and AR
Links that we discussed in the podcast:
Full (edited) Transcript with timestamps and speaker names:
Randy: 00:00 Instead of just seeing a video, instead of just clicking on a website, or reading a review, we wanted to add more value. And AR does that beautifully. Letting people who are interested literally see it in their home.
David: 00:19 You’re listening to Communications Transformed, a podcast from 8x8, where we interview the latest thought leaders and innovators who share their insights about the future of enterprise communications. Let’s get to the show.
Randy: 00:36 Welcome to the “Communications. Transformed.” podcast. I’m your host, Randy Ksar. In our first episode, we chatted with Russ Chadinha on the challenges retailers are facing and how to innovate to stay ahead with customer expectations. Lot’s of great lessons there. If you haven’t listened already, definitely tune in.
Randy: 00:53 In today’s podcast, we continue with the digital transformation topic, and go across the pond to London, England. My coworker, David Chase, connected with Simon Silva, global retail experience manager at Bang and Olufsen, to discuss their latest AR mobile app for iOS that is improving the employee and customer experience.
Randy: 01:12 Enjoy this interview, and as always, post your review wherever you listen to your podcast.
David: 01:17 In this episode of “Communications. Transformed.,” we focus on the retail sector. Retail is an industry which has, like many others, has changed dramatically in the last decade. The changing landscape means online sales now represent almost 20% of all UK retail sales, and a similar number in the U.S.
David: 01:35 Retailers are coping with this in a wide variety of ways, and some more successfully than others. We’ve seen in the news recently, numerous cases of retailers who are struggling to keep customers coming back and struggling to find new ways to ensure survival.
David: 01:51 However, it’s not all bad news. There are some companies who are enjoying this rapid change, and are making particular good use of new technology in order to thrive. And in this episode, we’re joined by a special guest from one of the world’s leading, high-end consumer electronic companies, Bang and Olufsen.
David: 02:09 We’re going to look at a real world example where Bang and Olufsen are using augmented realities that enable customers to enable customers to envision B&O products in their living space. The early results have been very encouraging, as they’re successfully driving sales through this new experience.
David: 02:27 The person driving this innovation for B&O is with us today, Simon Silva. Simon, welcome to “Communications. Transformed.,” it’s great to have you on the show. First off, I’m making it about you, and if you could tell us a little bit about yourself and what you’re doing at Bang and Olufsen, that’d be a great start.
Simon: 02:42 Thanks David, yeah that’s great. My name’s Simon Silva, I’m the Global Retail Experience Manager for Bang and Olufsen, and I’ve been here now for about five years, but I’ve actually started this role in early 2017.
David: 02:59 Fantastic. Thanks Simon, that’s a really nice intro. So, augmented reality. It’s something that’s been spoken about, sort of, in the tech world for a little while now and the story that you guys have, and that you’ve started [inaudible 00:03:12] is a particularly interesting one. So it’d be really great for you just to give an overview of what you’ve managed to achieve so far from the project, and how AR is really helping B&O move forward.
Simon: 03:23 Sure. Well, I think it’s really important that I give you some context of where the AR tool sits in the overall strategy. When I came into Bang and Olufsen, into this role in 2017, we had a customer promise. And that customer promise was really a way to sort of navigate through the business of how we could deliver smiles on faces and money in the till.
Simon: 03:49 So, we had this vision. We built this vision where it was really a hearts and minds piece that we could get people behind. That was supported by some key things, like being surprisingly thoughtful or delivering an immersive experience. And then those things were supported by commitments. These were the daily standards and rules that we had to live by.
Simon: 04:11 And that was quite effective because people understood the why. They understood the why those standards were so important, and the rules to play were so important. But in order to succeed, or teams need tools. Tools to help them live those commitments day-to-day. And one of those tools is the AR tool, the augmented reality tool. And we call it the B&O AR experience.
David: 04:37 Fantastic. So, it sounds like it’s really customer first, customer focused and the real benefit of this tool is about driving the customer experience and making that high value customer experience a much better one and ultimately to deliver, like you say, money in the till, but also making sure customers like using the tools that you provide just as much as they like using the high tech consumer goods that you guys provide.
David: 05:05 What was it that really started this project, and, kind of, drove the move towards this AR experience.
Simon: 05:12 I think there was two things. One is, getting a new Chief Digital Officer, so Christian Birk joined the company as well, and he’s a really open guy and let me pitch him an idea about how we could utilize augmented reality.
Simon: 05:28 The second part, where I got the idea from, is actually looking at the customer value map. So, we mapped out the customer journey. We identified areas that were really essentially gaps in our experience that needed improving, and I’m really interested in emerging technologies and how we can utilize them. And I could see that there were some pains and some gaps within the experience that AR is pretty useful to resolve.
Simon: 05:56 So, an example would be awareness. Bang and Olufsen, to me, is one of the best kept secrets. And I think, being part of an innovative technology and really utilizing it in an effective way can build awareness. Where I saw most of the value in the customer journey map was evaluation. We can help customers fill their imagination gap. They can literally see what our products are gonna look like in their home.
Simon: 06:23 And of course, the purchasing. It helps to make purchasing decisions, whether it’s a particular size of the TV, whether they want a larger one or a smaller one, a color preference perhaps, or even a placement of a product, ’cause some of our products are either on the wall or on floor stands.
Simon: 06:40 And then, again, post-purchase, when we’re installing the product, before we even install a large TV, we can show the customer what it’s going to look like before it’s even installed, and get their approval. That’s where I saw a lot the value. In order to actually deliver this, of course you need a great team.
David: 07:00 Absolutely, so I just want to come on that in a second, the team and the day-to-day of how you actually ran this project, ’cause I think that would be really useful. Just before we do so, what’s interesting for me, is kind of how you’re using this on a day-to-day basis, so it would be really great just to get an understanding of the customer journey map.
David: 07:17 The way that somebody uses this application, so is it a customer downloads the application from an app store and they use it in their own home, and then purchase online? Or do you have members of staff that are using this with potential customers? What’s the process, and how did you ultimately get where you are today with the application?
Simon: 07:35 Sure, well it’s both. But, the weight is actually more with our store staff utilizing it as a sales tool. And that’s where I feel where we differentiate from other brands. I think a lot of people, or a lot of brands use AR just as an awareness strategy, and some in a bit of a gimmick aspect, but actually, I wanted our teams to serve customers in a better way.
Simon: 08:06 So, it was about putting it in the hands of our teams, and allowing them to get really comfortable with this emerging technology, and help customers make decisions. So, primarily, it’s a sales tool, but of course we want it open to anyone who’s interested in Bang and Olufsen, to have a go, to explore and to discover.
Simon: 08:27 For me, I never pitched this tool as an audience builder, because it’s too niche. You know, it’s just about Bang and Olufsen, and it’s just about showing Bang and Olufsen products. So, for me, it’s not a tool to build an audience, but what it’s there for is to deepen engagement. Deepen engagement of those that are interested in the brand, and are interested in specific products. Instead of just seeing a video, instead of just clicking on a website or reading a review, we wanted to add more value. And AR does that beautifully, letting people who are interested literally see it in their home.
David: 09:07 Absolutely, I couldn’t agree more. And that idea around, you know from the outset of you guys wanting to build effectively a closing tool for your sales staff as well, you know, rather than that brand awareness. Ultimately, we’re going to come into some of the early results in a moment, but that just sounds like, having that mentality from the outset is really gonna build a positive project. With regards to the project, how did you guys sort of scope that out. What was the time scale, the people that you choose to work with, how did you kick that off and what were the important factors within Bang and Olufsen and also externally to get right.
Simon: 09:46 One thing I will say is, actually, it’s not just about the closing, because the tool is really effective in the evaluation stage. Because we want customers to make the right choice, and when people feel comfortable in making the right choice for their homes, the closing just happens …
Simon: 10:00 … in making the right choice for their homes, the closing just happens. The sale just happens because you’ve served the customer in a way that they can make the right decision for their living space. [crosstalk 00:10:12].
David: 10:12 Yeah. Absolutely. Yeah. So building that customer engagement through the whole process. It’s offering an extra level of engagement rather than just the standard, “Come into the showroom. Have a look or look online.” It’s really allowing customers to picture it, which kind of offers that real high- end customer service and customer satisfaction tool.
Simon: 10:33 That’s exactly it. Should we talk about how I built the team and how I delivered it through the team?
David: 10:39 That would be fantastic. Yeah. Get a bit of understanding about how this came to life.
Simon: 10:42 Sure. Okay. The process was once I got the thumbs up from Christian to be able to chase this ambition of delivering this tool, it was about finding the right suppliers. So it was doing a lot of research, utilizing our teams in procurement to identify key candidates that communicated that they had the core competencies to deliver in this space. Then I would go for a process of having phone calls, emails exchanges, meetings, and getting an understanding in terms of what they actually could deliver and their price point.
Simon: 11:34 And I’ll tell you something really useful, actually, in terms of price points. Money matters because we all have budgets, but it doesn’t mean that we’re looking for something low cost. So when I looked at all the suppliers, there were a couple of suppliers that were actually coming in at a very low cost. Well, I’m quite familiar with this space, and I know that there are challenges. And the costing that they were coming back to just seemed unachievable. To be able to deliver something of a high quality at that low price was impossible. So I had to dismiss them.
Simon: 11:59 But also, on the other hand, we saw suppliers that perhaps maybe looked at the brand, knows that we’re a high-end luxury brand, and priced it a little bit too high, some almost double than what was competitive. And of course, you don’t get through the door that way either.
Simon: 12:21 Once you start shortlisting, it’s all about going through, well really, a scoring system. And how I like to score suppliers is through five key areas. Number one, competencies, of course, start with the core competencies of if they can deliver.
Simon: 12:38 Number two, execution. I want to see their past work that’s being delivered at a high standard. I want to be able to be tactile with those experiences that they’ve delivered. I just don’t want to see PowerPoints. I actually want to get hands on with their past projects so I can get a feel of the quality.
Simon: 13:01 The third thing is chemistry. The moment that contract is signed, it’s no longer customer and supplier. It’s team because we’ve both committed to delivering something special. So we’re a team now. So I really needed to make sure there was a chemistry there, that the people that I was going to be working with, one, wanted to work with me, but also I wanted to work with them.
Simon: 13:21 Number four, customer centricity. Now, this is all about technology, but we’ve got to put people before technology. Technology is meant to be there to serve a purpose, to serve us, not the other way around. And some suppliers led with the technology and not the benefit that it gave to the user.
Simon: 13:43 And the last thing was the demo. We were very clear with the brief and a possible concept. And we wanted to see how far people would go. And I was looking for personalization and a high-quality demo to really help fill my imagination gap in what these suppliers could do.
Simon: 14:01 And we partnered with a great partner called OutHere. They scored 98 percent on the scorecard.
David: 14:09 Wow. That’s amazing.
Simon: 14:11 We were onto a winner there. And they were great people to work with as well.
Simon: 14:16 So once that was sorted, it was actually looking at Bang & Olufsen as a whole. We have got so many talented individuals. I’m blessed to work with fantastic, talented individuals at Bang & Olufsen. I have weaknesses. I have some really great strengths, but I certainly have some weaknesses. So I looked internally for those individuals that could really fill the areas where I’m not so great at. Yeah, just approaching them with the project, getting them on-board, getting them committed, and we were able to do some really good things.
Simon: 14:53 Also, it comes from the top level as well. What’s really lovely about Christian is that it’s like working with a mentor rather than a boss. So you feel comfortable about going to him with challenges, and also sparring as well. You can spar ideas and feel comfortable in that space to not have all the answers, but to get them, to find them.
Speaker 1: 15:17 Let’s take a quick break and learn more about 8x8.
Speaker 2: 15:21 8x8’s communication solutions help businesses transform their customer and employee experience with one system of engagement for cloud voice, video, collaboration and contact center, and one system of intelligence on one cloud communications platform. Businesses can now communicate faster and smarter, to exceed the speed of customer expectations. For additional information, visit www.8x8.com or follow 8x8 on LinkedIn, Twitter, and Facebook.
Speaker 1: 15:58 Now let’s get back to the show.
David: 16:00 Absolutely crucial. There’s a few things that you’ve said now there, which I really believe in myself that we see a lot in the similarities in the markets that we serve as well, so some of the things around people before technology and making sure there’s a solid team are absolutely crucial to any project, I believe as well.
David: 16:19 And one final question, I guess really, around the project itself. You mentioned kind of strengths and weaknesses, and some of the things that can be run from head office, and having that great support of your boss to be able to spar with and run ideas off, and that kind of thing. I guess, just for my imagination of running a project like this, I guess one of the things that would be really important to get feedback around is the people on the shop floor and their experience with customers. So is there anything special you did around there in terms of getting that feedback from the feet on the ground?
Simon: 16:53 One hundred percent. That is actually super-key. One of my weaknesses was that whole process of UX and UI testing. And I brought a fantastic individual from my Innovation Lab in Struer, in the northern part of Denmark, called Cashmerie, who really drove that aspect of the project. So we did continuous beta testing, and the people that we used in the beta testing came from actually a WhatsApp group that I’ve created. So every store that I visit … Bang & Olufsen has over 400 stores. I’ve personally visited around 100, and every time I go into the store, I look for the most passionate individual. I look for the person I connect with who really loves the brand, who wants to be there in the long term, and I just say, “Don’t be shy. Here’s my number. Join the WhatsApp group because we’re sharing best practices.”
Simon: 17:52 And what we’ve done is we’ve built a group on WhatsApp of CX rock stars, a community that shares best practices on how they’re putting smiles on faces on our customers. That, of course, leads to money in the till because Bang & Olufsen is an emotional purchase, and if we serve our customers really well, then, of course, we’re going to be profitable.
Simon: 18:15 At the end of the day, the people in our stores, our partners, they do critical jobs, and I’m here to serve them. I’m here to give them tools to help their jobs be easier. So we opened the tool to them. We opened it to everyone in the WhatsApp group. We ran beta testing. We ran in-person testing. And we kept them, just getting all their feedback, and making the tweaks, and validating their learnings. But really, all credit for that needs to go to Cashmerie and all the people that did sign up to the beta and give their feedback.
Simon: 18:52 Having that process in place really determined … really saved us, one, a lot of money because we could catch little issues really early. And it saved us a lot of time.
David: 19:04 Yeah. Absolutely. And I guess almost getting that … or having access to that near real-time feedback as well, having an instant bit of communication like a WhatsApp group with people on the ground, people that are doing development, having that near real-time feedback must have been crucial to the project sort of timings as well, I guess.
Simon: 19:22 Again, they are different values. So we ran surveys, which gave us a sort of quantitative approach and insights in terms of preferences and usage, but also the in-person, the qualitative stuff, the in-person testing, was incredibly valuable, just watching people and how they use the application was really super-interesting.
David: 19:49 So in terms of the project sort of scale then, from start to finish, what were the timeframes like and, I guess, what were you … some of that quantitative stuff, what were you trying to mark against in the early days of the beta testing? Was-
David: 20:00 … trying to market it in the early days of the beta testing. Was it money in the till? Was it customer experience? If we could just get a bit of background about that.
Simon: 20:09 Yeah. So the whole project from conception, finding a partner to deliver this, and a team to deliver this, to actually being live on the App Store was seven months.
David: 20:22 Wow.
Simon: 20:23 Which is pretty, pretty incredible. And I think the process for that was all I cared about was outcomes. So on a Monday, we would have a stand-up call in the morning and it was basically each stakeholder saying what will they achieve this week. And we all agreed that. Wednesday, we had another stand up call to update me. Where can I serve you guys? Are there any barriers to prevent you from achieving what you said you would do by Friday? And then we’d iron those out. And then on Friday morning, it was did we achieve what we said we were going to do?
Simon: 21:02 So that was a really clear process to be able to get everything done in seven months. You know, I didn’t care about activity. I cared about outcomes and then I cared about being there to [inaudible 00:21:12] the team as the owner, to remove any barriers so then they could perform at a high-quality level. And in terms of what we were looking at in all the different sorts of data points, what I cared about actually was users and how they found the experience. so in terms of effort, effort scoring. How easy is it to use this product? And we marked that at the beginning of the beta and at the end. And of course we wanted to make sure that we saw increases in that.
Simon: 21:44 Would you recommend this to a colleague? Are you finding this a useful tool in day-to-day work? Was another thing. So we used it like a net promoter score. And then satisfaction. How satisfied with it are you? By the end of the beta testing, when we went live, among all beta testers we had no detractors. Everyone was in the positive side of the graph which was really lovely to see. And we started off with a few detractors, of course, because it wasn’t perfect and we needed to learn. So that was really lovely to see that journey.
David: 22:20 And also quite amazing in that timescale, to be honest as well. And like you say, no matter what the technology is people they sort of change. So the fact that you managed to work really closely with all of these colleagues of yours and ultimately the people that are going to use it and hopefully benefit their sales as well is amazing. And like you say, in terms of being able to swing all of those people around is a fantastic job and I guess ultimately marks the project as a success from your point of view.
Simon: 22:45 Yeah. It’s been a great success in terms of one, employee engagement. Everyone on the team is super proud of what we achieved. A lot of people had ownership in getting us to this spot. But also, the brand as a whole. I’m very fortunate to go to head office quite regularly and meet people in the corridors and they’re saying, “Well done. It’s a great tool.” And of course I’m telling them, “It’s a team effort and it’s colleagues that they probably sit next to that’s helped us deliver this.” So I can see already within the brand that people are super proud.
Simon: 23:17 But then there’s the other side of it, the hard business impact. And early results are phenomenal. In that beta testing, within a month, well just over a month actually, we generated enough revenue to pay for the project two times over.
David: 23:35 Wow. That’s amazing.
Simon: 23:36 That’s amazing, right. That’s incredible.
David: 23:39 That’s amazing.
Simon: 23:40 That’s why you just have to focus on the customer. Put the smile on the customer’s face. Help them be able to achieve what they want when they’re coming in touch with retail. They want to make a purchase. They want it to be friction-free. They want to feel confident and comfortable that they’re making the right decision. And time is the ultimate resource. Make it easy for them to understand and to make a choice. And make them feel comfortable that they’re making the right choice. That it actually does fit their home and that it is going to give value to their life. And then people are willing to pay for that.
David: 24:18 Those numbers are just amazing as well. Just still catching my breath about those. But you’re absolutely right, you know. We live in a world now where ultimately the customer absolutely does come first. You know, they hold all the keys in terms of what we can learn. How we can improve on a day to day basis, no matter what industry we work or have customers in. So seeing that as a real seven month project from start to finish and that impact on customers but from the feedback you’ve had first-hand, is just amazing to listen to and it’s sort of a fantastic story for you to go for it. Yeah, that’s really great.
Simon: 24:52 Well thank you.
David: 24:54 Simon, what’s next then for the AI application for B & O? You mentioned you had beta testing. You may have mentioned there that it was live now or going live soon. So what’s the latest? What’s the update? What’s next?
Simon: 25:05 It’s on the App Store. We’ve done a silent launch so that our stores have full access first and feel comfortable because the app can be used in stores in a way that we don’t have all of our product selections visually merchandised in our stores. You know, there’s only so much space for TVs, and speakers, and all-in-one wireless speaker systems. So different color variations and sizes, we don’t have all of them in-store. So they can use them in-store, get comfortable with that to show customers all our different finishes and options. But also, for them to get comfortable so they can visit customers’ homes and so complimentary site surveys and show them what it’s going to look like in the customer’s home.
Simon: 25:47 So we’ve done a silent launch. It is on the App Store. We’ve got some really lovely numbers in terms of downloads. We’ve communicated through our CRM to some exclusive customers about the application and see how they feel about it. We’re getting some lovely reviews coming through as well. But I think what’s next is maintenance, added features. Wouldn’t it be great if you could digitally wear your headphones and make a choice like that. So maybe that’s coming. And also some really exciting things. Bang and Olufsen has got new products.
Simon: 26:21 Imagine being able to start dreaming about having this product in your home really early on before even seeing it in store and actually visualizing it in your home. So I’m really excited for the new things that are coming, collections that we may be releasing. Yeah, there’s some really beautiful stuff that we get to play with at Bang and Olufsen. But also, what I’m really excited about is how we can utilize AI in different areas of the business and that’s something that I’m sort of unpacking right now with, again, some really talented leaders in the business in Bang and Olufsen about how we can influence the customer journey in different ways.
David: 27:03 Well Simon, it sounds like you’ve got a lot on your plate and you’re really going to make the most out of this technology, which is just fantastic to hear. It’s really nice to hear a story of real value that’s being given to customers through AI, real money in the tills. It’s a real fantastic story. Thank you so much for sharing your time today and sharing that with us. Anything just to close?
Simon: 27:22 Well, if I will close on something is know that the people in the stores do the critical job. They put the smiles on faces and money in the till. We’re not here as leaders without them doing that job-critical role. Bringing them in early into projects because they have an eye on the business that people internally do not have. So it’s really important that you bring them in early and you serve them. And also, the second thing, surround yourself with A players. Surround yourself with talented people. Work with people that you feel comfortable with and enjoy it. When everyone’s enjoying themselves, great things happen as well.
David: 28:07 Perfect. Thank you for that, Simon and I’ve had a lot of fun on this podcast and that was a really great story. So thank you. Yourself and your team are real retail innovators and like I say, this is just a fantastic story and thanks again for sharing it with us. So everyone thank you. That’s the end of the podcast this week. Please go and check out the application. You can download that from your App Stores for B & O and if this podcast’s anything to go by, there’s going to be a lot more added to that as well. Which is really exciting and that’s something that I’ll definitely be going to do right now.
David: 28:39 It’s great to hear a story of how AI is really affecting a business in a positive light. It’s not just being used as a gimmick. It’s really affecting sales and customer experience. So thanks again Simon. And please join us again soon.
Speaker 3: 28:52 You’ve been listening to “Communications. Transformed.” To ensure that you never miss an episode, subscribe to the show in your favorite podcast player. Thank you so much for listening. Until next time.