• Tom Janssens

About the COVID-19 pandemic and online configurators

It has been a while since we first heard about that strange virus that held the whole world hostage: COVID-19.

An artistic impression of the COVID-19 virus
This is one ugly virus

It was identified for the first time in Wuhan in December 2019, but I can only assume most of us severely underestimated the impact of this novel virus.


As the pandemic went global, a couple of things happened:

  • Social lockdown

  • Economical lockdown

  • And, as a consequence, widespread supply shortages

As I heard from several of our customers, not all was negative for people in the construction industry:

  • People spent less on travel, social activities, so they saved some extra cash

  • People spent more time at home, and were confronted daily with pains and potential improvements for their home, and thus generated more demand for the construction industry

According to our professional network, this resulted in a huge influx of new projects (30% to 60% more turnover, some of our customers even reported they more than doubled their influx).

However, increased demand and supply shortages made the logistics and execution for people in the construction industry very challenging


How online product configurators helped during the pandemic


During the pandemic, the following insights emerged from our customers regarding our configurators:

  • Our online configurators are usable by consumers in the comfort of their own homes. The fact that people were hesitant to go outside, surely drove more people to online configurators. (There is a rumour that one of our customers had so much orders flowing in, that they had to stop all marketing actions - I cannot acknowledge or deny this statement ;) - )

  • Most of our customers' prospects were better informed because they experimented with the configurator before. (Some on-site visitors acknowledged that experimenting online with a configurator raised their curiosity)

  • The quality of the leads via our configurators was unprecedented (Less time spent on leads that didn't convert, and a better idea about the needs of the client from the start)

  • Sales and lead gen efforts could be heavily reduced, if not decimated



Why online 3D product configurators will be the bees knees for 2022 and beyond


Disclaimer: It goes without saying that this is a very biased opinion, as I'm the owner of a company that offers online 3D configurators.


We are currently very bullish on the global market for configurators, and expect exponential growth for both us and our competitors in this emerging market, as momentum is picking up.


We notice this on the amount of leads that we receive that is expanding every year, the usage of our configurators on multiple platforms, and the fact that the public currently expects an online 3D configurator if you sell anything configurable that might benefit from visualisation.

A graph growing exponentially
Usage of our configurators over the years...

We believe that, after this huge influx of leads and projects in the construction industry during 2020 and 2021, it will become harder in 2022 to acquire new leads, and that you need to invest in lead acquisition now, in order to be ready to go when things go haywire.


... And some strong indicators that support our view


However, as we understand that the size of our personal sample data might not be statistically relevant, we will show you 3 indicators that online 3D configurators are becoming the norm, and are no longer considered a novelty.


1/ The growth of and consolidation in the global CPQ market


CPQ is an acronym for "configure, price quote", and is about automating the B2B quotation process for configurable products.

from wikipedia: Configure, price quote (CPQ) software is a term used in the business-to-business (B2B) industry to describe software systems that help sellers quote complex and configurable products.

The biggest impact of CPQ software is a shorter sales cycle, a slightly larger deal size and better closing percentages. More about the emergence of CPQ can be found in this article.


Well known enterprise examples are:

Other vendors don't offer CPQ themselves, but offer integrations with CPQ providers, for example:

According to Gartner, this is a highly fragmented market estimated at $1.4 billion in 2019 where the largest vendor was capturing only 17% of the global share.


This market is booming and consolidating.


As online 3D product configurators are a natural extension of CPQ, it only makes sense that the market of online 3D configurators will follow the growth of the CPQ market, albeit a decade later.



2/ Investment rounds and acquisitions in the emerging configurator market


As the market for online 3D configurators is expanding, it attracts investors and large companies mostly interested in acquisitions.


Over the course of 2020, a lot of our competitors either got acquired by large companies, and others raised capital. The capital rounds were mostly series A, but yesterday for example I heard one of our competitors raised a series B to support global roll-out; congratulations Ben; that's a huge achievement!


The influx of all this capital will surely help to spread the concept of configurators to the general public.


My personal guess is that consolidation of this market is at least another decade away.



3/ Consumer internet usage is only rising


I have 2 sons aged 14 and 15, and a large aspect of their social lives happens online, in games like Fortnite, Roblox, Minecraft, ... or online communities like Snapchat, Instagram and whatever the next big thing will be. If anything, the pandemic somewhat enlarged this even more.


This is a generation that has grown up with computers, tablets and phones, and while they can be very computer-illiterate sometimes (my kids and their friends call an Ethernet cable a WIFI-cable ** WHYYYYYY? **), things like online configurators and interactions in 3D/VR/AR/XR come natural to them. They will become the generation that never experienced a world without a cellphone or wireless internet, or has seen the a phone booth that was still in use.

A phone booth
Yes kids, you had to enter this strange construction, and slide in some coins in order to call somebody while on the road! And if you were on the road, people could not reach out by phone. Imagine that!

I think the rebranding of Facebook to the metaverse could be considered a good indicator that some share the same opinion. (You can read my opinion about the Facebook metaverse here)


Combine this with the emergence of faster and better consumer peripherals, and soon people will expect 3D/AR/VR/XR experiences in ways we cannot even imagine right now.


In closing


The COVID-19 pandemic has had a huge impact on the global economy, and I am afraid we haven't seen the end of it yet. We strongly suggest you to prepare for the whiplash that might be coming next in 2022; it's better to be prepared and hope that nothing happens than to be sorry afterwards. We strongly believe online configurators can be a big contributor to that.


Maybe you have better solutions; feel free to let us know in the comments!


Oh, and while we're at it: keep it safe, and enjoy your time with friends and family as much as possible!


"You're only here for a short visit. Don't hurry, don't worry. And be sure to smell the flowers along the way." - Walter Hagen

 

Addendum: Why we don't mind mentioning competitors


At Virtual Sales Lab, we believe in the strengths of our product, but also acknowledge sometimes other solutions are a better fit.


Our ultimate goal is that our customers are happy and stay with us forever, so we are very peculiar in our qualification. If a prospect is not a perfect fit for us, we tell him where he can find a more suitable solution for his challenge.


The reasoning behind this is simple: starting off with something you "forgot" to mention - like a competitor that would be a better fit - is not the best foundation for a long and stable relationship.


If you are curious: here are the most occurring reasons:

  • The prospect does not gather enough leads per year (typically less than 250/year)

  • They sell a product where you can change some colors/materials and add/remove some options (there are cheaper and simpler solutions for that)

  • We don't have the right components for the configurator the prospect wants (for example: clothing, or very complex architectural constraints)

We believe that the market is big enough for all of us, so we are willing to go the extra mile to find the customer that loves what we do.


For the record: this does not imply that we are not open to new opportunities, but our first priority is becoming the best in our niche - currently consumer configurators for construction - before we expand. Anything that derives from that is not a priority for us.