Applying the co-creation approach

When customers cannot find what they want on the retailer's shelves, they can quickly shop online or with competitors. To combat this problem, a retailer was looking for a technology to ensure their shelves stay stocked or appear to have an endless aisle for products consumers are looking for. They wanted to make sure their customers found what they wanted, and that it could be shipped to the store to pick-up or their homes.

ICETS' design practice was used to design an AR solution using a co-creation approach involving the retailer, professionals, and first-time customers. The sessions were set up to understand the user expectations of a solution that would allow customers to search for products not kept in-store and ship them to their homes or back to the store. The solution needed to enable retailers to offer a much broader product assortment without worrying about shelving or storage costs.

The co-creation approach, a human-centered approach, focuses on the mechanism to create value through the interaction between the firm and its customers (Prahalad and Ramaswamy, 2004a; Payne, Storbacka and Frow, 2008), also called "value-in-use" creation (Payne, Storbacka and Frow, 2008; Grönroos, 2011). Prahalad and Ramaswamy (2004b, p.8) suggest, "co-creation is about creating an experience environment in which consumers can have an active dialogue." Consumers can co-create personalized experiences, even if the product is the same.

Different approaches are in practice to implement co-creation. In this approach, companies can gather feedback from their customers about their opinions, desires, and needs and capitalize on their problem-solving and creative skills (Füller, 2010). Companies may choose to integrate customers very early in the process from idea creation to communication, or they may choose to involve them later in the

development process to keep the lead on idea generation (Vernette and Tissier-Desbordes, 2012).

Choosing customers' specific attributes is crucial to enhance new product success (Grüner and Hombourg, 2000). In the idea generation phase, firms can resort to lead users, i.e., avant-garde

consumers who anticipate what needs will shape and influence the market offering in the coming years and increase new product success (Von Hippel, 1986). Companies can also refer to innovator

communities (Franke and Shah, 2003) or customer networks of actors. This approach favors innovation for leading companies, enabling them to be more imaginative when devising their value proposition (Cova and Salle, 2008).

Extant literature suggests that using the co-creation approach has multiple advantages. First, it shows that customer participation improves the new product development process (Fang, Palmatier, Evans, 2008) while influencing product innovativeness and speed to market (Fang, 2008). Second, for customized products, it shows that co-design experience significantly influences the perceived value of the product (Merle, Chandon, and Roux, 2008). Last, customer participation favors an enhanced perception of the firm, a willingness to recommend the firm to others, and higher purchase intent and willingness to buy (Schreier, Fuchs and Dahl, 2012).

Adapting from the popular co-creation techniques, as summarized above, ICETS engages the design professionals, retailer, professional and first-time customers in their co-creation sessions. They range from 2-3 hours each, and there are multiple such sessions to make sure what the solution will address in the specific use case, what it will not and why, so the users know what to expect when the solution is implemented. These sessions were observed, and the following steps were noted:

• Introduction with scenarios and videos: discussion of potential use cases of AR, and first

impressions. In this process, ICETS does overviews of the technology, what the AR characteristics are, and demonstrates practical uses of AR with different devices and formats. This introduction allows the users (retailer and customers) to relate the detailed use cases they would like to address and picture how an AR solution makes sense.

• Experimenting with an existing AR application or solution and reflection on it: ICETS uses a current AR solution or a version of it and tests it against the use case provided. This is to get the users familiar with the use of technology for the specific use case and to spur discussion

• A discussion that includes personal opinions and preferences and general comments: In this phase, users provide their comments, options, preferences based on context and familiarity, and what they want from the solution to address the use case differently or similarly.

The co-creation sessions' learnings are used to develop the solution, with the users being engaged every step of the way.

As the consumers were unfamiliar with AR, the consumer sessions were started with an introduction to AR and what it can provide. ICETS briefly presented different scenarios illustrating an AR solution in retail used to find products. Immediately after the introduction, first impressions and opinions were collected on how realistic the participants considered the presented scenarios to be, compared to what they were looking to solve. No introduction was needed for the ICETS technology professionals, as they were already familiar with the concept of AR technology design characteristics and the types of AR they have used to date in retail.

The Head of Retailing described the specific retail experience scenario used in these co-creation sessions:

¨You have arrived at an apparel store to purchase a specific set of clothes. You find one you like, but there are different combinations of the clothes, only one of which is available in-store. You think you like a specific combination. The sales associate confirms that while the desired combination is not in-store, they do have it in stock, and it can be shipped directly to your home.

But is the desired combination the right one? The sales associate helps you identify the specifically requested combination and other combinations in 3D on your phone. From there, you can tap into AR to place the desired combination in front of you, walk around it, and explore it up close. If you're not entirely sure, you can view a similar combination and place it next to the original one in the store via AR to see the difference in size and style. If you are still not convinced, you can try out this combination when you get home via the AR-enabled retailer's site, just like you did in the store.

Not only does it match what you desire, but it is also exactly what you want. You can purchase online from there.¨

The sessions were continued by experimenting with the AR solution they were introduced to in practice.

Participants were instructed in advance to bring to the sessions a few digital photos of retail settings they had seen and liked or had experienced before. ICETS then used a publicly available online retail

experience image to augment the images. The application was used to activate discussion, emphasizing that the participants should not deliberate whether ideas were possible, but think creatively. The users had no prior experience using AR; however, they concretized what AR could provide with the augmented images. ICETS engineers operated the solution to prevent usability and other technical

limitations from affecting users' perceptions negatively. It was done to allow users to think more of what they wanted rather than whether the functionality was technically feasible.

The users were then encouraged to make some conclusions on what they experienced. These were organized as themes: would they use this solution to find products as customers; would retailers train their sales associates on how to encourage customers to use this solution to find products that were not available in-store; what features were desired and would that lead to a purchase of something they did not physically see; were they confident of testing combinations virtually; and were they willing to share what they wanted?

The co-creation sessions provided context that professional versus first-time customers had different needs and wants. Those users who had brought pictures and images of how they imagined the ideal retail setting seemed to ideate more, wanted more features, and tested different AR options. It indicated that more engaged users who had the familiarity of possibilities came up with more use case scenarios to test out, in line with the human-centered concepts (Maguire, 2001).

ICETS operated the application throughout the session to allow participants to focus on generating ideas and the general concept rather than on the particular application and its user. The participants expressed their opinions freely, with statements such as, "I'd like to remove this piece of the aisle", "I want to see products based on my preferences¨, "Ï want the ability to check brands and prices¨, and "I'd like to add here...". If a participant came up with an idea that was not achievable with the application in question, it was discussed in detail. If the participant's idea was doable, it was executed while it was being discussed.

During the experimental part of the session, the following themes were discussed: desired functionalities, potential or actual problems, and the naturalness of the real–virtual combination.

Figure 13. Infosys web app for ¨Endless Aisles¨ using co-creation

Each co-creation session ended with a discussion of the following themes: Would you use this kind of solution when buying a new product? Would you use such a solution to buy products from an online store? What are the essential features of such a solution (when purchasing a new product or matching products or comparing products)? Would you use this kind of solution to share designs? What sorts of products could be tested virtually? Any other comments?

The co-creation sessions revealed some important takeaways regarding how retailers and customers perceived the AR solution (Figure 13) could address the retail experience of finding products not available in-store and having them delivered.

The first-time customers did not consider accuracy important; their need was whether what was presented

"looked realistic". On the other hand, the professionals needed accuracy; otherwise, they would not select the products virtually. The current state of AR allows users to choose products virtually; however, these virtual objects can be moved over physical objects or overlap with other virtual objects, and this was seen as a drawback by the professionals.

Both professional and first-time customers expected a catalog where they could browse pages of combinations of clothes. Thus the "atmosphere, assortment, setting by brand, and price" was important for the experience. Customers wanted the ability to choose different colors and textures by price and search for specific brands. They also wanted the ability to "conceptualize or dream of possible combinations"

using the AR solution.