Taking payments through the looking glass (literally)

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Buying clothes can be a tedious process of waiting in lines to get into the dressing room, and then waiting in line again to make a purchase. As it turns out, eliminating the second half of this process can also reduce the first half.

The San Francisco startup Oak Labs is introducing its Oak Checkout concept today, building on an interactive fitting-room system based on mirrors that's been in development since 2015 at stores from designers including Ralph Lauren and Rebecca Minkoff. The new version adds Near Field Communication technology to accept payments from within each dressing room booth.

Founded by former eBay executive Healey Cypher and colleagues, Oak Labs aims to wipe out the pain points that still exist in physical retail stores. Its interactive mirror serves as a live merchandise catalog, improving stores’ efficiency and reducing shoppers' various frustrations, according to Cypher.

In addition to handling payments, the mirror can also allow shoppers to pick different sizes and styles, just as they would be able to when shopping online; the system can then signal the shopper's choice to a store associate. In doing so, Oak Mirror reduces the average time spent in a fitting room by 40%, cutting overall waiting time for fitting rooms, Cypher said.

“The typical experience in a fitting room isn’t a good one,” Cypher said. “You’re in there with your pants off and you need another size, but you have no easy way to signal you need help from busy store associates.”

Through its app, Oak Labs supports a system for merchants to equip products with an RFID tag containing detailed product information, which appears in condensed form on the mirror when a customer wears it in a fitting room.

Shoppers can tap the product information displayed on the mirror to browse different sizes or styles, and to request help. Store personnel receive notifications through the Oak Labs app on their mobile device and can signal they’re on the way back to the fitting room with information or additional merchandise.

When they’re ready to pay, shoppers tap the items they want to purchase on the mirror’s display and hold their NFC-enabled payment device near the mirror to complete the transaction. San Francisco-based payments gateway provider DotDashPay provides the payments technology for Oak Mirror.

Oak Labs faces some steep challenges in persuading retailers to adopt its full system, including managing inventory through RFID tags, and the total cost is difficult to calculate, Cypher admits. But a growing number of retailers already carry merchandise with RFID tags, which cost pennies and will play a key role in inventory management as the omnichannel evolves, he believes.

“We’re at the beginning of the next wave of retail, kind of the post-Amazon era, where retailers are competing now on the experience they can give shoppers, and we’re getting lots of interest,” he said.

Oak Labs is in discussions with several major retailers who plan to test the concept this year, Cypher said. So far Oak Labs has installed its mirrors—minus the payments element—in Germany in several outlets of upscale women’s apparel retailer Gerry Weber, and also in New York City with Ralph Lauren and Rebecca Minkoff, which will soon test the concept in San Francisco, Los Angeles and Chicago, Cypher said.

The challenge for merchants is building a system to connect to Oak Labs’ system for managing inventory in stores and online, but Cypher said this is a direction many retailers already are going.

“The long-term goal is to help retailers cope with colliding trends, where consumers want access to vast inventory that’s unavailable in stores, and online merchants are losing money on shipping and returns because consumers are often guessing when ordering online and there’s a tremendous amount of disconnection and inaccuracy,” Cypher said.

In initial retail tests, Oak Checkout drove double the average basket size for purchases, as consumers blended the experience of trying on merchandise in the store with shopping online to get all the colors, sizes and combinations they wanted in a single transaction, Cypher said.

The NFC-enabled Oak Mirror also allows shoppers to adjust lighting to see their outfits in other settings, such as how evening wear looks in candlelight.

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Internet of things Mobile payments NFC Retailers U.S. Germany