Stefan Hauswiesner of Reactive Reality: The Future Of Retail In The Post Pandemic World

Fotis Georgiadis
May 3 · 9 min read

Interactive and fun — Few technology providers realize that any technology is only as valuable as its ability to be adopted by users. Make it useful, interactive and fun for users and they will come back and spend more.

As part of our series about the future of retail, I had the pleasure of interviewing Stefan Hauswiesner, CEO and co-founder of Reactive Reality (www.reactivereality.com), the Austrian augmented reality leader enhancing the e-commerce experience for retailers and consumers

Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?

During my research and PhD studies at the Graz University of Technology, I worked on creating a virtual fitting room. It was a room-sized box with multiple cameras which allowed users to step in and see themselves wearing virtual outfits on a large TV screen. Around this time, I met my co-founders Philipp Grasmug and Philipp Pani. We quickly realized that software allowing consumers to try on outfits before buying them online had huge market potential, but that the existing technology was geared primarily towards laboratory use and was far too expensive for wide-spread adoption. We saw the need to scale up the technology, bring the functionality to mobile devices and lower the bar to entry for e-commerce businesses of all sizes. This is when Reactive Reality was born.

Can you share the most interesting story that happened to you since you started your career?

The most interesting story we have to tell is something fascinating we have learnt about consumer behavior. We set out to solve the return rate problem of e-commerce, caused by online shoppers being unable to try on and experience the products before buying, leading to return rates of up to 50%. Our virtual try-on solution, PICTOFiT, helps to solve this problem of high returns by letting shoppers pick the right size and styles, leading to lower returns; however, what we hadn’t anticipated is how fun and addictive consumers would find this. As soon as our PICTOFiT became available publicly to users, they started to mix & match thousands of outfits and spent hours doing so every month, leading to significant increases in sales and user loyalty, and engagement. This ‘fun factor’ was a big surprise to us back then, and has now become a major focus for us. We now know that a frictionless, fun experience is just as important as e.g. accurate size recommendations.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson or takeaway you learned from that?

There is no typical workday of a founder, and every stage of the company comes with new and different challenges. The beginning was dominated by technical developments and a lot of testing, and when working with early adopters of our technology, we learnt that, often, their creativity knew no limits. People came up with hilarious combinations of clothes, such as putting a swimsuit over a coat, to see what was possible. Naturally, this really stretched the technology’s limits and triggered intense development cycles. Often, it was challenging but also funny. In the end, all this helped us to make PICTOFiT what it is now — a robust solution scalable to millions of products and users.

Are you working on any new exciting projects now? How do you think that might help people?

We are working on exciting developments all the time. For example, advanced rendering methods which can reproduce the appearance of products at an unprecedented level. It shows the reflections on a shirt button, and complex reflective materials like satin and leather. Another great example are interactive user avatars, which can not only be used in virtual try-on applications but even in 3D teleconferences, gaming and health & fitness.

These developments help people to enjoy their days even during the pandemic, when friends are far away or time is too short to go to stores, cafes, gyms and other places. The world is fast becoming more and more digitalized and people will increasingly look for personalized, virtual embodiments of themselves for communication and interactive shopping experiences.

None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?

Professor Dieter Schmalstieg, head of the Institute for Computer Graphics and Vision (ICG), has been a long-term supporter of our development as a company and of our invention of new technologies, and is a real inspiration to all of us. He is a world-renowned researcher in the field of AR/VR, who has been awarded for his achievements, and is the author of the definitive book on AR. We still work closely with Dieter and the institute on solving some of the most challenging problems in computer graphics, vision and deep learning.

How have you used your success to bring goodness to the world?

In recent years, online shopping has delivered great benefits to consumers in terms of cost and convenience. However, the huge increase in items being returned, as consumers deliberately purchase several of the same item in different sizes and turn their bedrooms into fitting rooms, means that this shift is unsustainable. It is not only having a very negative impact on the environment, as billions of kilos-worth of returned items end up in landfill, but also on retailer profits, as many are poorly equipped to deal with the complex logistical challenges posed by returns.

With PICTOFiT, we are preventing the need for consumers to over-order by enabling them to create avatars of themselves together with true-to-life products that can be tried on in a ‘virtual fitting room’, giving a clear indication of what a product will look like when worn by the consumer. According to customer surveys, our technology is highly effective in enabling frequent and well-informed purchase decisions.

Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?

More and more companies are implementing consumer engagement technologies like AI, augmented reality (AR) and virtual reality (VR), accelerated by the pandemic. We have multiple projects helping brands and retailers present their collections at virtual fashion shows, virtual shopping malls, or directly in online e-commerce shops: for example, our PICTOFiT platform enabled the digital shows of young fashion designers during the Milan Fashion Week last fall. Another great example showing the power of AR in retail is our recent collaboration with Microsoft and the London College of Fashion on the Digital Human Stylist. It is a lifelike digital twin of the online shopper, animated and voice-controlled through AI, which understands what the shopper needs to make their daily outfit decisions, not only in terms of fit and size but also taste, style and occasion.

These developments are not only exciting to us — our customers reported that shoppers spend 5x more time with the brands and products, and make up to 6x more purchases through PICTOFiT, our AR-enabled fashion shopping platform. These are extraordinarily good results, and show that online shoppers will adopt and welcome these new technologies.

In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?

We already know the traditional model of retail will not completely return. Bricks and mortar stores need to find new ways to attract consumers, as many have discovered the convenience of online shopping during the pandemic and will be reluctant to switch back.

Brick and mortar stores will be centered around customer experience i.e. less about a purchase process and more about shoppers’ engagement and brand loyalty. Retailers will provide services to connect online and offline channels, and shoppers will expect a consistent level of service between digital and physical. To vastly improve shoppers’ omnichannel experience, retailers could implement AR allowing, for example, brick and mortar customers to view & try on clothes that are not currently available in stores on their own avatar. The shopper could then leave the store with their own online sign-in credential, where all the experiences from the store and their own avatar would be captured, allowing the shopping experience to be smoothly picked up later at home.

The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?

We would advise that retailers get out on the front foot by innovating and differentiating before their competitors do so. We often see in fashion retail that the adoption of the new technologies is rather slow, with retailers behaving conservatively and waiting for the first mover. However, those first movers then ultimately secure a significant advantage for themselves, while others play catch-up.

Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?

Despite the cost-competitiveness of these new Chinese companies, U.S. and European retail companies can take heart from the fact that online shoppers are not solely motivated by getting the lowest possible price. Therefore, these companies can gain the upper hand by offering the most enjoyable and frictionless online shopping experience possible. All too often, today’s online shopping experience is transactional and repetitive, with most online stores essentially appearing the same to shoppers. Integrating things like AR and interactive virtual dressing rooms into the e-commerce experience allows online shoppers to have more fun while gaining confidence in the buying decision, with the ability to try garments on their own body virtually, share on social media, hear the feedback, and more, before buying. Our customers reported extraordinary user engagement numbers after integrating PICTOFiT into their shopping apps, with average users spending over 3 hours every month — a 5x increase.

Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.

Interactive and fun — Few technology providers realize that any technology is only as valuable as its ability to be adopted by users. Make it useful, interactive and fun for users and they will come back and spend more.

Frictionless — E-commerce experiences should not distract shoppers from making purchases. They should facilitate the process by providing value to the shopper.

Seamless — Not all AR/VR technologies work together seamlessly. They may be compatible, but have different visual styles, leading to an incoherent result.

Scalable — Solutions for e-commerce need to be scalable. Shoppers only benefit from the technology if a large quantity of products are available for viewing, virtual try-on etc.

Photo-Realistic — AR/VR assets, such as avatars of shoppers and virtual representations of products, need to be photo-realistic. People are particularly sensitive to inaccuracies in their own depiction. Product visuals need to be realistic to enable users to shop with confidence.

Since we founded Reactive Reality in 2014, we worked with numerous retailers, brands and shoppers to figure out these core attributes. Needless to say, our journey was full of hard work and dedication, setbacks and progress driven by continuous development and verification, to bring us to where we are today. PICTOFiT incorporates these 5 core attributes in a single solution.

13. Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

Our PICTOFiT platform has a positive impact on the environment by bringing down product returns. This is important to us, but we find it equally important to create an excellent user experience. Any technology is only as valuable as its adoption, which is driven by the quality of the experience. We are dedicated to, and take pride in driving AR forward and making it an everyday technology. First in e-commerce, and then later in gaming, teleconferencing, health & fitness. There will be a big shift away from flat screens to entirely immersive visuals, and the early adopters of today have the opportunity to shape what this future will look like.

How can our readers further follow your work?

They can visit our website (www.reactivereality.com) to find out more about the company, and they can follow us on LinkedIn (https://www.linkedin.com/company/reactive-reality/) to hear our latest company news and updates.

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