1. The Oak Interactive Fitting Room: Enhancing consumers’
experience through digitalization
Retail marketing GM1108
Liudmila Pape
November 29, 2016

2. The Oak Interactive Fitting Room: Enhancing consumers’ experience through digitalization
2
Abstract
The Oak Interactive Fitting Room is a platform that takes the best from the online customer
experience into the physical store. We analyze the functional and emotional experience
outcomes that are brought by the novel software. Lead by the service dominant logic
framework, we present how this technology can bring value in use for the cusomer and help the
him to be a co-creator for the retail value. Consequentaly, retailer can have a higher level of
engagement, more sales and improved inventory management.
Introduction
The object of this research paper is the Oak Interactive Fitting Room, a connected store platform
that brings technology to the physical store. This platform combines e-commerce assets (cart),
inventory, CRM, transactions through POS (Cypher, 2016b). The Oak Interactive Fitting Room
appeared for the first time in the Polo Ralph Lauren flagship store in New York City (Opam,
2015). Later they Today it is presented in 15 different stores in 6 countries (Cypher, 2016b).
The Oak Labs main office is situated in San Francisco, CA, while the showroom, office and lab
is on the Lower East Side of Manhattan (Cypher, 2016a).
According to the official website, Oak Labs wants to bring together the worlds of tech and retail
to design intuitive, meaningful customer experiences and capture “previously unattainable
shopper insights” (Oak, 2016).
The aim of these research paper is to illustrate the service experience of Oak Interactive Fitting
Room through a theoretical framework of service dominant logic (Vargo, Lusch, 2004) and
present how this service experience is linked to the value in use (Sandström, Edvardsson,
Kristensson, Magnusson, 2008), what is valuable for the customer in this service experience,
finally, we will discuss how value is co-created with the customer. From a research perspective,
this analysis can serve as a background to understand how customer experiences through
technology-based services influence the perception of retail value in the physical store. From a
managerial perspective, this research paper can give some insights on how retailers can
differentiate their service offerings and how digitalization can improve both customer
experience and enhance operations in the physical store.

3. The Oak Interactive Fitting Room: Enhancing consumers’ experience through digitalization
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Theoretical framework
Conceptual model of customer experience creation consists of social environment, service
interface, retail atmosphere, assortment, price and promotions, as well as potential interaction
between the retail brand and previous customer experience (Verhoef, Lemon, Parasuraman et
al., 2009). In our analysis, we will concentrate more on the service interface component.
For our research, we will follow the service dominant logic, which is based on assumption that
all the participants are benefiting from service through interactivity of actions between the
service provider and the customer. In practice, it means that all the parties, eg. customer,
employees, owner, are working together on aligning the resources for value co-creation (Greer,
Vargo, Lusch, 2016).
It is also important to define the concepts of service experience and value in use. According to
Vargo and Lush (2004), service experience is born only after consumer experiences it. This
means that retailer can only create “the prerequisites for the service experience and the value
for the user”, which can be named as value proposition (Sandström, et al., 2008). A value
proposition can express how retailer’s offering will bring benefit to the customer (Greer, et al.,
2016). Value in use is a cognitive process that depends on each individual customer and
consumption conditions (Sandström, et al., 2008). However, many retailers find it hard to define
what kind of value they are bringing to the customer and how to estimate it.
According to Sandström et al. (2008), the main dimensions of service experiences are the
physical/technical enablers, the individual and situational filter, the emotional and functional
value propositions, and the outcome dimensions. From Figure 1 (see Appendix) we can see
how value proposition creates value in use for the customer. Physical/technical enablers are
constituting functional and emotional values that can be brought to the customer through the
service experience. Researchers of service experience emphasize the importance of delivering
both emotional and functional values through holistic consumer experiences (Sandström, et al.,
2008). Emotional value can express corporate culture and brand values. Further on, the values
are passing individual and situational filter, which means that consumer can be seen as a co-
creator of retail experience. Finally, the customer experiences functional and emotional
experience outcomes. Emotional outcome can be positive, if customer’s expectations are
satisfied, or negative, if the level of service was lower than expected. Consequently, customer
can evaluate his experience in the form of value in use. In our analysis, we will try to cover
technology-based retail experience in the Oak Interactive Fitting Room in order to define
functional and emotional experience outcomes.

4. The Oak Interactive Fitting Room: Enhancing consumers’ experience through digitalization
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Methodology and approach
We collected the data from secondary sources, like newspapers, magazine articles, videos and
interviews with the CEO and the founder of Oak Labs, Healey Cypher, that were taken during
exhibitions on innovations and digitalization in retail. Due to the fact that the Oak Interactive
Fitting Room was launched in Ralph Lauren store a bit more than a year ago, and also due to
the lack of empirical data on the web, we were limited in our analysis and had to rely on the
information presented by Oak Labs mostly, or by articles in magazines devoted to innovations
in tech and retail. Unfortunately, there are no yet exact figures on the results of the customer
engagement, except for those presented from the interviews with Healey Cypher. However, we
hope it is just the matter of time, and the Oak Labs will provide its innovational ideas with more
in-depth statistics.
After collecting more empirical data through involving customers in innovation process, the
Oak Labs will have more information to analyze customer experience from technology-based
service and choose the most favorable experiences.
Analysis
1. Value in use
As we discussed before, value in use is not the experience itself, but the evaluation of total
service experience, including functional and emotional outcomes (Vargo, Lush, 2004). As says
the founder of Oak Labs, interactive fitting room has 94% engagement rate during 20,000+
sessions (Cypher, 2016a).
If we take the framework of Sandström et al. (2008) as a starting point, we would say that
technical enablers for the service is a software, Smart Mirror, that includes e-commerce assets,
inventory, CRM, transactions through POS. Functional experience outcome for outcome is a
self-curated shopping experience, when the customer doesn’t need to leave the fitting room,
possibility to choose, change and ask for the item, pay for it or save it for later inside the fitting
room. While emotional experience outcome is the ease of choice, ease of purchase, convenience
and speed. As for the individual and situational filter, it is influenced by the help from the sales
associate, personalization of the advices through the data collected.
From the functional experience outcome perspective, after the customer walks into the fitting
room, the lightning comes up, and the mirror shows all the items that customer brought into the
fitting room through RFID product recognition. From there customer can change the lightning
or he can look at the items that he has chosen and request for another size, color and receive
style recommendations based on what is available in the store. After making a request it will
go the sales associate who will not only bring the customer the items requested, but also the
items that can fit to the chosen outfit. The sales associate has the insight what customer has in
his fitting room that is gathered through a corresponding iPad, moreover, he also has statistics
on the items from previous customers. After checking the items, customer can email his

5. The Oak Interactive Fitting Room: Enhancing consumers’ experience through digitalization
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selection to his email address or to his phone number for future consideration. If the customer
wants to buy the chosen items he can do it easily though the POS integrated into the mirror
(Digiday, 2016). The whole shopping experience can be executed within the Oak Interactive
Fitting Room. In fact, the customer doesn’t need to go out of the fitting room to change the
items, to save the items if he wants to buy them online later, to pay and check out.
From the emotional experience outcome, though it is a smart mirror, “everything felt very
smooth and responsive” preparing the customer to make a purchase (Opam, 2015). Oak Labs
make sure that customer can customize not only the items chosen, but also the retail atmosphere
through changing the lightning mode, by choosing the sales associate or by choosing the
language of the fitting room. Customer can get “an almost self-curated shopping experience”
(Lawrence, 2016). From other benefits are ease of choice, ease of purchase and speed of
shopping experience. With the help of interactive fitting room it is easier to find outfit without
leaving the fitting room. Customers can be more satisfied to make a purchase instead of
abandoning their selections when they don’t need to leave the fitting room and when they can
get a well-prepared guidance from a sales associate. According to statistics, retailers have
received an average basket lift of 59% after using this fitting room (Cypher, 2016a).
Furthermore, customers spend 40% less time in the fitting room (Cypher, 2016a). It is not
saying about the time that customers save by not staying in the line to pay for the chosen
garments.
Overall, there are many benefits for the customer that previously were not expected from the
physical store, but from the online store instead. The idea behind it is that the founder of Oak
Labs wanted to bring customer expectations trained by the convenience of the online store to
the fashion retail that is still resisting on fast transformation and digitalization (Lawrence, C.,
2016).
2. Technology-based self-service
Introduction of new technology-based services in the physical store can play an important role
in the perception of quality of services and of retail value (Verhoef, et al., 2009). Nowadays
these kinds of additional services in the store are becoming an integral part of shopping
experience, moreover, they can become critical for the overall customer experience in the store.
Moreover, digitalization has empowered retailers to introduce information-intensive services
that increase connectivity of parties and increase the variety of services (McPhee, et al., 2015).
Though interactive fitting room from Oak Labs is a technology-based self-service, it still
includes interaction with service oriented employees, for example, when the customer asks to
bring another item of clothes and employee in the shop can give style advices. The fitting room
was invented to be inviting and engaging, therefore, the Oak Labs want to create “rehumanized
experience” (Opam, 2015). Consequently, retailers can also track service level in the store.
Therefore, building loyalty among the customers through keeping up their service expectations
on the high level.

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3. Co-creation process
User involvement with service activities can result in favorability of these service experience
and increase the uniqueness of it for the customer (Sandström, et al., 2008). When customer is
involved, he is also becoming a co-creator, thus service experience can become more
personalized and again enhance the value brought to the customer (Prahalad, Ramaswamy,
2004). The Oak Interactive Fitting Room is very data-driven. It can work as a style
recommendation engine with the help of the information that was collected from the previous
customers or previous purchases. With the help of the Oak Interactive Fitting Room, retailer
can collect data on how long each item stays in the fitting room and what items convert (are
bought) more often than others (Digiday, 2016). Finally, the increasing information intensity
of service can transform into value for the users, because retailer uses the collected data for the
benefit of the customer (McPhee, et al., 2015). Mutual value creation here can be defined as
improving inventory management. The Oak Labs fitting room enables retailers to see what
customers bring into the fitting room and what items they are buying together. Retailers can get
to know which items are always tried in one size but bought in another or tried but never
purchased (Lawrence, 2016).
The main goal of the retailers in contemporary digitalized world is to develop unique customer
value proposition through favorable service experiences (Sandström, et al., 2008). It is not only
about functionality, but also about what problems this service solves for the customer. In case
of the Oak Interactive Fitting Room the benefits are easier, faster and personalized shopping
experience.
Conclusion
The Oak Interactive Fitting Room is an interesting example of an emerging trend when physical
stores are being transformed as the main point of sales generation. Though the growing number
of online stores, e-commerce is still less than 7% of all retail transactions, while in-store sales
account up to 95% of all retail experiences (Opam, 2015).
It is essential for the retailers to analyze how software can define the development of the
physical store and how value is co-created in the era of digitalization. In order to enhance
customer experience and technology-based service in particular, retailers should identify what
benefits it can bring to a customer and analyze favorable or unfavorable service experiences.
This is the way retailers can prepare a knowledge base for designing services that deliver value
for the users. Consequently, retailers can benefit from the collected data and improve their
operations. In perspective, it would be interesting to analyze this project from practical
perspective. Is it easy for the retailer to implement this novel software to his store. The fitting
room can even look for new engagement resources: how customer can share his experience
with the friends by using his mobile or any other channel. Moreover, what are the perspectives
of the fitting room for the mass-market, or is it only concideres as a high-end consumer
experience.

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References
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Appendix
Figure 1, Value proposition and value in use creation
Source: Sandström, Edvardsson, Kristensson, Magnusson, 2008
The promotional video of the Oak Interactive Fitting Room can be found here:
https://vimeo.com/141758597.