#3 AR – a problem solver in the fashion industry?

The aim of this blog entry is to demonstrate the main problem online apparel retailers are facing.

Do we have a problem?

Indeed. It’s Holiday season. This means it’s the most popular time of the year for online shopping. When shopping online, a quarter of holiday shoppers intend to return items at a later date, when purchasing them. As a result, ecommerce brands register the most returns throughout December, January and February. But high e-commerce return rates happen throughout the year and across all industries. With a return rate of 12.2%, apparel retailers struggle with the second highest return rate out of all industries and lie above the average return rate of 10.6%.

When having a closer look at return rates by category, it is visible that womenswear has the highest return rate of 23%. Followed by Footwear with 20%. Although the figures presented here relate to the combined product categories of multichannel, they reflect the trend in digital sales.

But why does the fashion industry have so many returns?

It is a fact that returns are the new normal of e-commerce and central to customer experience. Many customers buy with the explicit intention to immediately return some or all of their items. It is known that around 70% of fashion returns are related to size and fit, a challenge that doesn’t occur when ordering a TV or a coffee table for instance. The issue of size and fit contributes to the problem, because when customers are not sure what size they need they order multiple sizes of one item, with the certainty to send back the rejects. 

Consumer preference-based returns like size, fit and style drive the majority of returns in fashion items. Non-preference-based reasons like detective products or account for 10% of fashion returns. In the following, the return reasons with the percentage are stated.

  1. Size too small: 30%
  2. Size too large: 22%
  3. Changed my mind: 12%
  4. Style: 8%
  5. Not as described: 5%
  6. Defective: 5%
  7. Other or not specified: 18%

And why is returning clothes a problem?

The high return rates are actually not only an economic problem for retailer, but also an environmental issue when facing the fact, that free shipping and returns come with a high unsustainable cost. It’s estimated that return shipping in the US alone creates 15 tons of carbon emissions per year. That’s the same amount produced by five million people. Moreover, in some cases returned items get destroyed by the retailer due to cost and time aspects (see picture below).

So, when preventing the likelihood of returns, retailers reduce the brand’s carbon footprint. The less returns, the less resources are wasted.

How can online fashion retailers reduce their return rates?

For starters, brands need to check that all public-facing content—including product descriptions—are accurate and detailed. If the product arrives differently than expected, there’s a high chance of it being returned.
In order to provide more details on items’ fit and size, AR technology comes into use.

Using AR on e-commerce websites

Buying clothes in-store, naturally has some advantages over shopping online. The ability to see in person, try on, and interact with products before purchase, makes returns less likely. Now, to bring those advantages to online shopping, AR technology should help customers to experience an in-store shopping experience when shopping via a device. Retailers can use AR to show what their products look like tried on, in a customer’s home, or next to an item they own for size comparison.
AR prevents the reason behind the majority of returns: the fact the item looks different in person than it did online. 

As a further step, my upcoming blog entry will focus on the market of AR in general and Virtual Fitting Rooms in detail.







#2 Virtual Fitting Room – let’s see behind the curtain

In my second blog entry, I dive deeper into topic of the technology behind virtual fitting rooms – Augmented Reality. My research should lay the groundwork for understanding how AR works and how it can be used in a fashion context.

And what exactly is Augmented Reality?

Augmented Reality (AR) is available on any camera-equipped device – mostly on smartphone and tablet – and on which the corresponding AR software is installed. AR adds digital content onto a device’s live camera feed, making the digital content seem to be part of the real world. Unlike Virtual Reality (VR), which replaces reality with a completely digital environment, AR enhances the real world by digital information overlay or virtual details, which means the real environment remains central to the user experience.

Widely known and used examples of AR are for instance Pokémon Go and Ikea App. The picture below shows a range of different applications and fields, taking advantage of AR.

But how does AR work?

When a user points the device’s camera at an object, the software recognizes it through computer vision technology, which analyzes the content of the camera feed. The device then downloads information about the recognized object from the cloud and presents the AR information as an object overlay in a 3D experience. The content displayed is part real and part virtual. Computer vision determines an object in terms of semantics (what) and 3D geometry (where). First recognizing an object, then understanding it’s 3D position and orientation. With geometry, it is possible for the rendering module to display the AR content at the right place and angle, which is essential for a realistic AR experience. AR is real-time 3D or in other words it is live, which means the process explained above has to occur every time a new frame comes from the camera (most smartphones today work at 30 fps). As a result, when moving a device, the size and orientation of the augmentation adjusts to the changed context automatically. 

Finally: AR & fashion?

Yes – one field of application for AR are virtual try-ons. However, the experience should go beyond the aspect of trying on clothes, and it has to be said that AR cannot yet completely replace a real try-on due to the lack of display quality. The key aspect in such experiences is the part real and part virtual aspect of AR (person = real and garment = virtual). 

According to Vogue Business, the “AR clothing try-on is nearly here” and it “is getting closer to reality, and the pace of acceleration is increasing”. Companies and start-ups are working on improving try-on capabilities with updates including 3D body mesh to define 3D shapes, cloth simulation and its behavior more precisely. Since there are many interesting possibilities for in-shop-experience and online-experience, investors and tech companies see a great potential in AR clothing. The value of the technology is extended beyond its entertainment aspect.

In my next blog entry, I will focus more on the benefits of AR clothing and how it could potentially solve current problems concerning the fashion industry with a focus on e-commerce.