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Lowe's 3-D room makes remodeling a (virtual) reality

It's a question retailers everywhere are grappling with—how do they get shoppers to turn off their computers and step back into the store?

Lowe's thinks it may have found the answer: Give them something they can't get online.

The second-largest home improvement store announced on Wednesday that it will transform the in-store experience by building a 30-by-30 virtual reality room that enables customers to view a 3-D representation of their renovation projects before they start with demolition.

The proprietary technology, developed in partnership with SciFutures technology firm, starts by letting shoppers design their ideal room on one of the store's iPads.

By first entering the dimensions of the space they want to renovate, they then select the features they are considering for their home, including flooring and countertop options. Once the selections are made, the customer enters the Holoroom, which projects a realistic 3-D rendering of what their future room would look like.

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If they're satisfied, customers will be handed a list of their selected items, which can be purchased in-store or online. If, say, the tiling doesn't match the faucets, they can swap out different aspects of the design to get the look they want. And if they're still not sure, they can get a printed copy of the design, which can be scanned using a free app to be revisited down the road.

"Many homeowners are overwhelmed by defining and articulating their vision for a home improvement project and may never even start a project for that reason," said Kyle Nel, executive director of Lowe's Innovation Labs. "The Holoroom removes a significant barrier for customers in helping them visualize how a finished project will look in their homes."

Source: Lowe's

The Holoroom will debut later this year in two of the company's Toronto stores—a smaller market where its 35-store footprint dwarfs its U.S. store count, which tops 1,700.

The initial launch will be limited to bathroom remodeling, but over the next 12 to 18 months, Lowe's plans to add new categories and rooms such as kitchen, living and outdoor spaces.

The retailer has not yet set any plans for a U.S. launch.

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The Holoroom's creation stems from Lowe's Innovation Labs, an initiative developed by the company to harness existing technologies, as well as work with start-ups, universities and other companies, to create the store of the future. The retailer's technology tie-ins extend outside of the retail universe, including multiple appearances at the Consumer Electronics Show.

Source: Lowe's

Lowe's isn't the only retailer looking to revamp its in-store experience to boost engagement and customer loyalty; a multitude of other brands are tackling the issue with myriad approaches.

Urban Outfitters, for example, is opening a series of store concepts that include third-party offerings, such as a coffee shop, hair salon and rooftop bar, to keep shoppers in its stores longer. LVMH-owned Sephora, on the other hand, is taking a more tech-savvy approach by testing augmented reality mirrors, through which customers can virtually try on different makeup palettes. And Macy's and other stores have begun experimenting with in-store GPS technologies to help shoppers navigate once they're inside.

Read MoreSephora brings augmented reality to real-life shop

"I think [in-store technology] absolutely will be the norm," said Joanne Podell, a vice chairman at commercial real estate firm Cushman & Wakefield. "Any retailer today that does not look at using technology to engage the customer experience is making a mistake."

New technologies are one way Lowe's is looking to capitalize on the recovering housing market, which helped the retailer post a comparable-store sales gain of 0.9 percent in the most recent quarter, despite an extended winter that delayed consumers' purchases for the critical spring selling season.

Still, the retailer is lagging the performance of major competitor Home Depot, which posted stronger sales growth in the most recent quarter despite a more difficult comparison from the prior-year period.

"We're not sure what it will take for Lowe's to take share from Home Depot at this point," Citi analyst Kate McShane wrote in a recent note to investors.

In Lowe's May earnings call, Chief Customer Officer Michael Jones said the retailer's main focus moving forward will include catering to its professional home-improvement shoppers and enhancing the customer experience.

"Everyone realizes that change is happening at an increasingly fast pace and that fast pace is becoming increasingly harder to predict," Nel said in a taped interview. "The only way you can really effect change [is] by being the change."

—By CNBC's Krystina Gustafson

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