Marxent Labs has signed contracts with 11 of the top 25 furniture retailers in the United States, as a growing number of shoppers want to virtually experience a new couch, table or chair in their home before making a purchase.
The company also is expanding into kitchen design, providing cabinet manufacturers a tool for do-it-yourself remodelers to use that’s “like designing from Pinterest,” said Beck Besecker, co-founder and CEO of Marxent.
Marxent, with virtual reality and augmented reality technology, is the kind of company local business and government leaders want to grow in Tampa Bay, with its high-skill jobs and cutting-edge technology. The seven-year-old company, with 70 employees at offices in St. Petersburg and Dayton, Ohio, has raised nearly $14 million in venture capital funding and expects to post its first profit next year, Besecker said.
Virtual and augmented reality defined
Virtual reality (VR) is an artificial, computer-generated simulation or recreation of a real life environment or situation. It immerses the user by making them feel like they are experiencing the simulated reality firsthand, primarily by stimulating their vision and hearing.
Augmented reality (AR) is a technology that layers computer-generated enhancements atop an existing reality in order to make it more meaningful through the ability to interact with it. AR is developed into apps and used on mobile devices to blend digital components into the real world in such a way that they enhance one another, but can also be told apart easily.
Marxent has been growing steadily since it was founded in 2011, but it shot into the national spotlight earlier this month after Macy’s (NYSE: M), released a case study on its partnership with Marxent.
Customers design their living space and, using a VR headset, immerse themselves in the virtual rooms they create, Hal Lawston, Macy’s president said.
“VR is a practical application proven to drive sales and a terrific example of combining technology and the human touch,” Lawton said.
Macy’s is seeing a 60 percent increase in average order volume, Besecker said.
“If I say a couch needs to two-and-a-half feet from a coffee table, that’s an abstract concept. But if you put on a headset you can walk around the space and feel the distance, which is a much different thing. What also happens is, it’s not just the couch you came in for, but I’m showing you the rug and the lamp and the mirror and the side table and you end up buying the whole room, not just one item,” he said.
It’s the largest VR rollout in retail history, and validates the work Marxent has been doing, Besecker said.
“We are the pioneers. We were the very first company to put VR in retail. We sold the first product that VR ever sold – first kitchen, first living room, first bathroom,” Besecker said. “It’s no longer will this work, but how quickly can we get it rolled out.”
American Furniture Warehouse, based in Englewood, Colo., unveiled an augmented reality furniture application partnership with Marxent last week, and another five or six retailers are expected to go public about their work with Marxent over the next month, Besecker said. Marxent also signed its first international client.
“What happened was a lot of people were testing and piloting. Once Macy’s shared their results publicly, it got the whole market moving,” he said.
Marxent’s technology is a platform, or a base upon which applications and processes can be developed. The company has a “white label” application that is pre-built.
“It gets rebranded with the retailer or manufacturer’s brand and then we also put that retailer or manufacturer’s 3D content into the system,” Besecker said. “It’s the same platform, repurposed over and over again, but customized and we’re branding the content for each client.”
All the content is hosted in the cloud.
“People buy the cloud from us and then they pay for each application they add on. We’re very much a standardized product. You tell us you want to work with us and we build your content and we charge a monthly subscription like Salesforce,” Besecker said.
Marxent also is working with a couple of kitchen cabinet manufacturers.
“It’s almost impossible for the lay person to design a kitchen by themselves,” he said. “We call our tool ‘photo to floor plan.’ We take a 2-dimensional photo of a kitchen and then we map it to a 3D model. You can drag from a 2D image into your floor plan and place it in a 3D model of your space. You can design from photos you like. … It makes it possible for the average person to do complex design, just by saying I like that photo, put it in my room.”
Marxent is staying focused on the home goods space, with a potential market of $2 billion to $4 billion.
But the total market potential for augmented reality and virtual reality is much larger, Besecker said.
“Advertising is going to be a huge vertical, gaming, entertainment, medical, industrial, education — pretty much every major vertical you can think of is going to be touched by this technology,” he said. “We’re in a pretty specific vertical but there’s billions and billions coming into this space.”
Marxent has about 20 employees in its downtown St. Pete office at First Central Tower at Central Avenue and Fourth Street. In Dayton, its staff of 50 recently moved into a new 20,000-square-foot space.
The company is adding staff “incrementally,” including in leadership roles, but won’t be rapidly expanding its workforce as it did in earlier years, Besecker said.
“We’re not a start-up anymore. We’re moving into being a real business, an ongoing concern.”