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Retailers turning to virtual shopping platform Obsess amid pandemic

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Yahoo Finance’s Alexis Christoforous and Neha Singh, Obsess Founder & CEO, discuss the virtual shopping platform’s growth amid the coronavirus pandemic.

Video Transcript

ALEXIS CHRISTOFOROUS: With foot traffic way down because of the pandemic, some retailers, like Ralph Lauren and the Gap, are experimenting with virtual stores. The VR e-commerce startup, Obsess, has created more than 60 virtual stores for about 20 companies. And joining me now is the founder and CEO of Obsess, Neha Singh. Neha, good to have you here. First off, just what is a virtual store? And how can we as consumers, experience it?

NEHA SINGH: Hello. So a virtual store is basically a 3D, 360 web-based experience. It's a way to experience a retail store without actually going there. It is completely digital, and it gives you the feeling of being in the store without having to actually be physically present. What we are seeing from retail industry is that this was something that had been in play for a while, but the COVID has really accelerated the demand for these experiences. And retailers are really thinking of their dotcom as their new flagship store.

And so think of like the experience that you have on e-commerce, it's today, very different from what you see in a retail store, like online, whether you're shopping for fashion, like this example, or you're shopping for beauty or furniture, it's all just a grid of thumbnails on a white background, right. And this interface is really the same, whether you're buying toothpaste and hasn't changed in a long time. So that's what retailers are really looking to change now with the pandemic and with really upgrading their online shopping experiences.

ALEXIS CHRISTOFOROUS: So do I as a customer, have to wear the glasses, the 3D glasses for this VR experience if I want to do this with a retailer?

NEHA SINGH: No, actually not. So that's where technology has progressed now, that it's actually all available just on your phone or on your desktop computer. It is part of their website, so it is just another page that you can look at on their site. You don't even have to actually download an app. You don't have to wear a headset. So it's really kind of the progression of this technology to something that's become very accessible to consumers and very accessible to brands as well, which is why you're seeing the proliferation today.

ALEXIS CHRISTOFOROUS: We said that you have already come up with 60 virtual stores. Can you give us an idea of some of your clients and who do you think is really embracing this VR experience in retail right now and sort of getting it right?

NEHA SINGH: Yes. So our clients include fashion brands, beauty brands, some home brands. We're also working with a bunch of big box retailers. So it's really going across different, different categories. And there are two ways in which these customers are creating virtual stores. One is that they are actually taking their physical stores and virtualizing them, which means you can essentially visit a store remotely. In that case, the experience looks exactly like the retail store. And it is a way for them to promote their retail stores, as well as for customers to get that experience.

The other really interesting way in which some of these retailers are using these experiences, is creating things that are entirely digital. So environments that don't exist in real life, which really allows them to go beyond what they may have in a physical store. So in that case, they can make anything that they want to make. For example, my background here is actually a virtual store. I'm not showing the products here in it, but it really allows retailers to create these unique immersive experiences for customers, which they can also keep updating very easily. Because unlike changing something physically in a retail store, in a virtual store, we can just do it with a drag and drop. We can change the colors and it can create really unique experiences for customers. So those are the two ways that we are seeing the retailers who are using this best to either make virtual experiences of their digital stores or create something completely digital.

ALEXIS CHRISTOFOROUS: What about the ability of these virtual stores to bring foot traffic back? I mean, I guess that's the ultimate hope, right, that you whet the consumer's appetite, and that makes them want to physically go to your brick and mortar store. I guess I question though if that's really going to happen. Is that really going to translate for the consumer? What are your thoughts?

NEHA SINGH: Yes. I would say some of our customers are using it for that purpose and for that use case, where it is about driving foot traffic to virtual stores, sorry, to retail stores. What we are also seeing [AUDIO OUT] cases is they are activating the virtual experiences for in-store pickup. So that, I think, is actually a very interesting use case where these virtual experiences get activated when you're close to the store. And then you don't have to stand in line at the store, but you can get the store experience order, discover your products, and it's brought out to you.

In terms of data, there is not a lot at the moment that necessarily shows, as you were saying, whether these virtual experiences will eventually get people to go more in person to the stores. So what we're really looking at is a much broader application, where it is not just about driving foot traffic to retail stores, but is really about bringing those experiences together and bringing that in a much more accessible way to customers where they already are. So that's really what we are seeing as the bigger use case.

But we certainly do have customers who use it before pandemic, they used to use it for store openings, for pop-up stores, which would show the experience and the services that they offer in store, and then elongate the life, actually increase the investment on the real estate, because now a larger audience can see the experience that you've built. So that's certainly something that I think will wait and watch over the next year, whether that translates to foot traffic too.

ALEXIS CHRISTOFOROUS: All right, Neha Singh, founder and CEO of Obsess. Thanks for being with us.