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Williams-Sonoma is buying a 3-D imaging and augmented reality startup for $112 million

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Williams-Sonoma, the home furnishings company that also owns the West Elm and Pottery Barn retailers, has agreed to acquire the San Jose-based startup Outward for $112 million in cash, the companies just announced.

Five-year-old Outward specializes in replicating physical products in high-quality 3-D imagery that can be used for visual merchandising on retail websites and apps.

Outward has also worked with companies, including Williams-Sonoma’s Pottery Barn, to use its product renderings in augmented-reality apps that help customers visualize how a piece of furniture or decor would look in their home.

For Williams-Sonoma CEO Laura Alber, the deal marks just her second acquisition since she became CEO in 2010 and the first of a technology company.

“One of the key components here is the quality of the image,” Alber said on the choice to work with Outward over other companies in the space. “If you look at other 3-D images, they are very cartoon-like or take a lot of time to produce.”

“We believe the quality and scalability is unparalleled,” she added.

The move underscores the impact that retailers in home decor and furnishings expect augmented reality to have for online shopping in their categories. Retailers from Wayfair to Ikea to Amazon have all introduced AR shopping experiences over the past 18 months.

Williams-Sonoma has been a client of Outward’s for three years and originally used its technology to allow customers to get a 360-degree view of a piece of furniture on its websites and to easily swap out different color choices.

Over the past year, the companies also worked together to launch Pottery Barn’s augmented reality app and plan to roll out new shopping experiences together that could include virtual reality applications.

Outward founder Clarence Chui will stay on to run his 100-person team independently as a subsidiary of Williams-Sonoma, and his startup plans to continue to do business with other clients. The company, which raised less than $12 million in venture capital, has a customer base that includes furniture company Bassett and Rocky Mountain Hardware.

“We want to transform the shopping experience for all customers,” Alber said, when asked why Outward would continue to work with other companies. “We’re quite aware that nobody has just one brand in their home.”

The deal is expected to close by the end of next month.

Here’s Alber’s interview from Recode’s Code Commerce conference in September:


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