Movie Magic Makes a Move to E-Commerce at Threekit

Movie Magic Makes a Move to E-Commerce at Threekit

By Karen Knapstein, contributor via the Underground Group
7-minute read

In short: 

  • Threekit’s technology was created for movie-making. The company changed course to serve the retail industry in 2016, enabling shoppers to visualize products before they buy.

  • 3-D configurator technology gives retailers insights on customer preferences and popular products, but it can be a complicated sell to company leadership.

  • Threekit developed a strategy to help its sales team help potential buyers understand the product’s value — and stop wasting time on prospects unlikely to convert.

In 2005, Ben Houston knew he could make movie magic by combining his knowledge of software with his passion for visual effects. The result? Technology that helped bring CGI wizardry to films including the award-winning “Harry Potter,” “Star Wars” and “Avengers” franchises.

Nearly 14 years later, Houston changed courses to launch Threekit, a visual effects company that enables retailers to build interactive 3-D demos of everything from furniture and stilettos to forklifts and cookware. These demos close the “visual experience gap,” as Threekit president and COO Joachim Klein calls it. 

Consumers today are “always online, always using phones,” said Klein. That obsession with visual, immersive experiences means they want to see what they’re about to buy online in the same way they could pick up, rotate and compare items at a brick-and-mortar store.  

Houston met Klein in 2016 through a mutual client. At the time, Houston was trying to figure out what to do next with his business. Klein had graduated from Harvard Business School and spent 20 years facilitating major deals, like the sale of BigMachines to Oracle in 2013 for $400 million and SteelBrick to Salesforce in 2016 for $360 million. He saw an opportunity to help Threekit on its next adventure: moving from special effects in entertainment to the consumer product space. 

Threekit’s 3-D visual product configuration software uses CAD models or design specifications, depending on the product. For example, say a company has a CAD manufacturing file for a new chair. Threekit can convert it to a 3-D visualization, with the addition of available fabric choices. Or, in the case of a clothing item, the company could work from photos and samples. One retailer uses the technology to allow customers to configure workstations and visualize them instantly in 3-D. 

Threekit's software allows retailers to show off their products, like watches, in 3-D online.

Once an item is digitized in the Threekit platform, a shopper can choose from a menu of available colors and configurations. Threekit can set a piece of furniture in a virtual space or place a suit on a virtual body.  

That sort of augmented reality can be a game-changer for certain retailers, because it eliminates the “expectation gap” between the product shoppers thought they saw online and what actually arrives at their doors, said Klein. The technology drives revenue by giving consumers a way to visualize purchases in a way that hasn’t been possible until now. It also reduces costs for photography, a win in the competitive retail marketplace. 

Furniture retailers including Crate & Barrel, Steelcase and Herman Miller have signed on with Threekit. Tailored Brands, parent of JoS. A. Bank and Men’s Warehouse, is a customer too.

But the fact is that, while 3-D visualization has been used in companies’ research and development and design processes for some time, consumer-facing use of the technology is not yet widespread. And not everyone in leadership roles at a retailer can visualize the value it delivers, Klein said.

So he had to get creative.

💪🏼 The challenge

“We have a number of prospects who are interested [in Threekit],” said Klein. 

These initial contacts are usually project managers, who see the Threekit platform’s potential but don’t have the authority to approve the project. The roadblock tends to be getting executive signoff for what’s inarguably a cutting-edge technology but also requires work from various internal constituencies, from IT to marketing, and starts at $6,000 annually for a starter plan. 

“Potential customers have said, ‘I know how to calculate the ROI, but the boss didn’t buy into it,’” Klein continued. 

“Potential customers have said, ‘I know how to calculate the ROI, but the boss didn’t buy into it.'"

Klein realized that prospects may not have successfully presented the full business case for the product to their managers. After all, just saying “‘I think this tool is going to reduce marketing costs” isn’t enough to get funding for a new initiative from your manager.


📝 The plan

To combat this, Threekit starts with listening.  

“We go onsite,” said Klein. “We start at noon on day one and end at noon on day two.”  

The goal is to understand how the potential customer runs its business and confront challenges around adoption of the Threekit technology.  

Klein says that face time is key to winning a commitment: If you as a potential supplier can get five to seven people to sit down in a room for one-on-one conversations and demos over a couple days, that’s a signal they’re interested. If they won’t commit that time, he rarely sees a sale happening in the next year. 

“Do people come to dinner?” he said. “If they come, it tells you something. They’re not going home, but spending the evening with the vendor.”  

To build confidence in prospects, the Threekit team (below) goes onsite.

At the end of the two days, Threekit provides a report to its prospect with a business case, including projected ROI and costs to get up and running, that’s detailed enough to present to executive leadership.  

This takes an investment in time, Klein’s expertise and the T&E budget. However, we can see the return for any company that, like Threekit, sells cutting-edge technology that requires buy-in across the organization. 

“When companies invest in enterprise software, they want to make sure it solves their problem and has a great ROI,” said Klein. “To be able to give companies this confidence, a vendor needs to fully understand the customer's status quo, their requirements and challenges.” 

That understanding, built from the onsite assessment, is an investment in fostering a mutually beneficial relationship. The bottom line for an optional technology like this is always “How can it make us more money?” 

Threekit’s proposition is that it both reduces costs and increases sales. 

“Companies with complex products spend hundreds of thousands of dollars on studio photography,” said Klein. 

That’s because every combination — a chair in leather vs. tweed or a handbag in black vs. leopard — is a new image for photographers to capture.

But, “with our technology, you only need one 3-D model, which will then allow you to render out all possible permutations,” he said. “So photography costs can go down by 50-80%.”

Threekit imagery allows shoppers to see all possible permutations of a product, like a couch in various colors.

On the other side of the ROI coin is the potential increase in sales. When purchasing an expensive sofa online, seeing it in your chosen fabric and in a space with your room’s dimensions adds a level of confidence. 

During the onsite with prospects, “we take an example and go through it line by line,” Klein said. “How much can this increase revenue? What is the return on investment?”

“We take an example and go through it line by line: How much can this increase revenue? What is the return on investment?”

Even though the Threekit technology can be a significant investment, Klein said he’s seen companies achieve an ROI in 12 to 18 months, sometimes even less than that.  

“About 50% of the time … [the onsite visit] works,” Klein said. 

After Threekit takes the time to go onsite, truly understand the potential customer’s challenges and pull together a robust business plan, executive stakeholders see a growth path and Threekit closes the deal.

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🔮 The future

Threekit’s goal is growth. The company’s revenue has grown fourfold in the past year, and the team has tripled to 40 employees in the last 15 months. Additionally, Threekit raised $10 million in early 2019 and pulled in another $20 million round with Shasta Ventures at the end of the year. 

Klein said that funding indicates that investors see big potential. 

“It’s a new industry; there are so many opportunities,” he added. 

“It’s a new industry; there are so many opportunities.”

The company’s next big idea is to use its technology to create a platform on which retailers can upload files and make the renderings available to a number of different sources, including Amazon and 3-D ad servers.  

In addition to making customers’ products more visible, Threekit will be sitting on a data goldmine.

“The power in this is in the analytics,” said Klein. “If it's hosted centrally, you can get a lot of data.” 

For example, Threekit could let a designer know that hundreds of customers across various outlets have configured a garment in a particular fabric and color. That’s the sort of deep insight that drives new product lines and advertising spend.

“We’re very excited,” he said. "You [can] have a 3-D model that people interact with and generates data to give back to the retailers and brands.”  

It’s a matter of time until Klein and Threekit change the way we all shop online by bringing some Hollywood magic to the small (smartphone) screen.