Key Takeaways:
- Virtual try-on technology has the potential to be a potent solution to the pervasive issue of high fashion return rates, which currently plague brands that have significant amounts of capital bound up in static inventory – as well as steadily eroding consumer confidence and brand loyalty.
- But while the underlying technology behind virtual try-on (VTO) experiences has advanced significantly, accurate body projection mapping is only part of the picture, and privacy concerns and user experience barriers could still stand in the way of widespread adoption.
Before we dip into this week’s fashion technology news, The Interline would like to wish a happy International Women’s Day to all who celebrate.
Women make up the majority of our in-house team and our extended contributor and partner network, so it’s only fitting that today we celebrate the strength, resilience, and achievements of women around the world – honouring the diverse voices and remarkable contributions they make in the fashion industry and beyond. From groundbreaking designers to trailblazing models, the women who work in the supply chain, the inspiring activists and empowered consumers, and the forward-thinking technology founders and developers, today is a testament to the progress made and the journey ahead towards greater equality and inclusion.
There is still a long way to go, and we’re committed to playing our part in uplifting, supporting, and empowering this generation of women and the next as they influence and build the future of technology for fashion.
Focusing on the nearer term: this week’s news provided some indication that the market could be moving a step further towards a wider deployment of technology to tackle the problem of returns, which for some brands and retailers have reached historic highs.
And even for fashion businesses who are not seeing a big share of their sold items coming back to them, lower return rates still carry shipping and restocking costs, along with the potential for unsold inventory – which is increasingly tying up working capital for organisations of all shapes and sizes – to lose value over time. Each return, too, contributes to environmental waste beyond the footprint of reverse logistics, because many items are often disposed of rather than resold or recycled – 50% sent to landfill, and another 25% incinerated, according to Drapers.
It wasn’t always this way, of course: the rise of e-commerce, rapid shipping, and free return policies has seen these figures spike, as consumers have grown accustomed to purchasing multiple sizes or styles with the intention of keeping only one, leading to higher return rates. Based on a Coresight Research survey of decision-makers at US-based apparel brands and retailers, the estimated average return rate of online apparel orders was 24.4% for the 12 months ended March 6, 2023.
Based on The Interline’s own insights, this figure is much higher for mass market and fast fashion businesses – including those that have instituted policies to charge for returns either directly or as part of a shipping subscription analogous to Amazon Prime.
Across the board, consumers who shop apparel and footwear online are more likely to return products compared to in-store shoppers and compared to other categories, for the simple reason that it is hard, remotely, to visualise how apparel products will look or fit. Coresight Research also estimates that the online apparel and footwear market will total $155.8 billion in 2023, so a 24.4% return rate would translate to $38 billion in returns.
To tackle this issue, fashion brands and retailers are seeming to lean more heavily into virtual try-on solutions, which have had something of a slow uptick in the past, but which are quietly receiving something of a shot in the arm thanks to the buzzword-cloud combination of 3D and generative AI. Unlike previous attempts that faced challenges with fidelity and precision, recent developments have largely overcome these obstacles, drastically refining and upgrading the way consumers interact with digital clothing representations.
In the past, Nike introduced a digitally-focused store in China featuring augmented reality and foot-scanning tech to assist customers in finding their ideal shoe size for various sneaker models. Similarly, Sephora’s Virtual Artist app enables users to virtually test makeup products, either via the app or on in-store screens. Previously, makeup and shoes have seamlessly integrated with this technology, but its effectiveness with soft product categories featuring more complex fit parameters (that consequently experience higher return rates) remained uncertain.
But that’s changed. Vogue Business has reported that in February, Yoox Net-a-Porter (YNAP) began testing Deepgears virtual try-on technology on 90 styles from its house brand, Mr P, sold on their men’s site Mr Porter. Deepgears has said the brands that have used its tech see an average 25% decrease in return rates and a 28% in conversion on the items that offer the digital mannequin option. Deepgears claims to be able to ingest technical specifications on garments and to tweak textures so that the technology more accurately simulates the difference between denim and silk, for example. Others using similar virtual try-on technology include Balmain, Khaite, John Lewis, Macy’s, and Canada Goose.
Also aiming to reduce returns, but using a different technology method is N Brown Group (owner of JD Williams, Simply Be and Jacamo) who has launched a new Product Information Management (PIM) system to improve customer experience and cut return rates by ensuring closer alignment between design intent, product technical specifications and sizing data, and what information is exposed to the shopper across different touchpoints.
Being designated as one of the “key transformational priorities” for the company, it involves enhancing the product descriptions displayed on their pages, offering comprehensive details about fabric, sizing, and fit. This initiative comes in the wake of Simply Be and Jacamo’s recent rollout of new mobile-first websites, aimed at delivering faster site speeds and a smoother digital journey for their customers.
Thinking forward to a scenario where these initiatives might be combined, we could start to see a real and measurable dent in the avalanche of returns and captive inventory. After being presented with accurate product information across objective and subjective fit, materials composition and other important datapoints, shoppers would then ideally be able to trust in virtual try-on enough to visualise clothing, accessories, and footwear on themselves, and to then make the closest it’s possible to get to a hands-on buying decision over the internet.
What will be the tipping point that gets consumers to buy in? What will it take for them to trust the technology?
Despite being a logical endpoint for digital assets created during design and development, and despite its potential to impact all the different variables we’ve already mentioned, virtual try-on remains an experimental space for many brands, and the technology companies that have set out to tackle it have had varying degrees of success in targeting direct to consumers organisations. In addition to technical hurdles, some customers may feel unsure about sharing personal information like body measurements, bra size, height, weight, age, fit preference and so on. And for tech providers, this creates a mandate for rigorous standards of data governance.
There is also the longer-term march of technology to consider. It’s currently much too early to tell what the eventual impact – if any – of spatial computing and devices like Apple’s Vision Pro will be, but it seems logical to assume that, as the act of bringing digital representations products into real space becomes more commonplace, consumers evaluating clothing by bringing it into their homes via mixed reality could become very normal, creating a smoother onramp to real-scale virtual try-on. Before this happens, though, brands and retailers will need to proceed with a gradual approach to change; to cautiously to build trust and adoption of the technology.
The best from The Interline:
Kicking off this week the COO of Vizoo shares the immediate cost-saving potential of DPC and why it needs to become the mainstream tool for the fashion industry.
After making significant, early strides, New Balance have remained at the forefront of 3D – marrying their commitment to heritage with a major drive towards digital content and digital creation. We sat down with two key figures in the brand’s digital strategy to talk tools, assets, and what it means to operationalise DPC.
And closing this week, THREEDEEMEE’s Co-Founder and CCO discusses fashion’s greatest opportunities and hurdles when it comes to DPC, and how the company is creating an ideal future state for digital and physical fashion.