TFR | Strategy Consulting

This is my second post about Fashion 4.0 or Fashtech for The Fashion Retailer:

Augmented Reality and Virtual Reality in Fashion Retail

Retail is evolving and adapting to digitalization or the phygital. Online is destroying the way retailers, or some of them, understood physical shopping. Business Models that successfully grew during the 20th century are closing stores. Most of them are department stores: Big buildings strategically prepared to keep customers inside, without external windows, an outside-in retail approach. In many cities, department stores were the only place to find such a wide fashion assortment and people visited them as a regular plan. Big parking, large stocks, good prices. Many shoppers didn´t have an alternative until online arrived.

But Retail Apocalypse doesn´t mean that customers won´t buy anymore in physical stores. Some Department Stores and Malls are reinventing the point of sale thru digitalization, but for others, it´s too late and too expensive. Brands like H&M, Ralph Lauren or Michael Kors are also closing stores. The ones that didn´t invest in “digital” (e.g. UX, UI, RFID, ROPO, etc) for the latest 10 years will have problems to face competition.

Many fashion retail brands are investing in flagship stores but forget second-tier stores. These are sometimes ugly and dirty, a pile of clothes is stocked anywhere, and it´s not easy to find what you are looking at. It´s a labyrinth. Then, queuing for the fitting room, and same thing when going to pay. No doubt, online is going to kill those stores that only sell products like water bottles in supermarkets. I have seen, more than once, a vaccum cleaner and lots of wrinkled clothes in flagships stores. And the “touch & feel”  shouldn´t be exclusive to luxury fashion retailers, because experience and story telling is something expected in any segment of the fashion pyramid. If you want to buy a basic product, you will use the internet and avoid a bad offline experience (If you know your size and you are only buying a white shirt, that you already bought it a few monthts ago, why would you go to a store?).

Omnichannel shopping demands a totally different approach to the customer and the way products and services are delivered. Customer experience demands the reinvention of product display and information (traceability and transparency), customer service, store layout/architecture, stock management, etc. Traditional retail KPIs need also to adapt to omnichannel: Sales growth per store, Availability, Stock Turn, Average Ticket, Conversion ratio, Sales per square meters (or foot), for example, aren´t realistic when customers can window shopping, Research Online Purchase Offline (ROPO), See Now-Buy Now, etc.

Millennials and Generation Z values are different from Baby Boomers ones, and experience is what they want. Nownership and experience above materialistic stuff. Brandship and not Flagship. It´s in the Experience Economy and Curated Experience where Augmented Reality and Virtual Reality will have an impact in fashion retail. It´s Fashtech. As an example, in Feb 17, the affordable luxury brand Coach installed VR headsets in stores to provide consumers with full access to its latest runway shows. The virtual reality experience was a partnership with IMG, Simon Malls and Facebook.

Zara is already betting for Experience in the Digital and Omnichannel era. Zara opened a pop-up store in London to show how online and offline are integrated. The store’s design features technology-enhanced elements aimed at elevating the customer experience. Store employees will have mobile devices to aid customers, and there also will be a card terminal system that operates with Bluetooth technology (WWD  -1/25/2018).

Zara, also introduced a few weeks ago its augmented reality shopping app. After downloading the Zara AR app (from either iTunes or Google Play), customers can point their phones at the aforementioned shop window, as well as “via in-store podiums, on boxes they receive delivering online purchases and via dedicated images at zara.com,” and models Léa Julian and Fran Summers are brought to life for seven- to 12-second sequences (4/13/2018, Refinery 29).

In 2017, Amazon acquired Body Labs, an AI platform that utilizes computer vision to generate three-dimensional human motion and shapes for gaming and shopping applications. And also Graphiq, an Artificial Intelligence firm that provides data visualization solutions for researchers, journalists and enterprises (read Strategic Acquisitions: Amazon vs Walmart). GAP is also investing on VR, with its DressingRoom app (developed by Avametric), that uses avatars to help people understand how products will fit without stepping foot in a dressing room.

But, what is Augmented Reality or Virtual Reality?

According to Gartner Augmented reality (AR) is the real-time use of information in the form of text, graphics, audio and other virtual enhancements integrated with real-world objects. It is this “real world” element that differentiates AR from virtual reality.  AR integrates and adds value to the user’s interaction with the real world, versus a simulation.

Virtual reality (VR) provides a computer-generated 3D environment that surrounds a user and responds to that individual’s actions in a natural way, usually through immersive head-mounted displays and head tracking. Gloves providing hand tracking and haptic (touch sensitive) feedback may be used as well. Room-based systems provide a 3D experience for multiple participants; however, they are more limited in their interaction capabilities.

AR and VR Startups & Companies specializing in Fashion retail that you should know about: 

OBSESS is a platform that enables brands and retailers to create Augmented & Virtual Reality shopping experiences for mobile. Customer can access digital information and media associated with in-store merchandise thru an app. Customer can also find videos and recommendations that help in making in-store purchase decision.

AVAMETRIC is a digital 3D software platform that provides automated content creation for brands, retail, and e-commerce sales tools. Its technology enables brands to deliver accurate 3D rendering of their apparel & Accessories on customizable digital body models for web, mobile, and AR. Avametric technology creates digital garments that faithfully reproduce their real world equivalents.

VIRTUSIZE is a virtual fitting solution that enables online fashion retailers to illustrate size and fit for consumers. As they mention, their solution has been developed alongside designers, pattern makers and industry leading online retailers who share our view that garment comparison is the only way to clearly and objectively showcase size and fit.

BLIPPAR provides business tools & solutions using world-leading augmented reality, computer vision, artificial intelligence & visual search technologies. Max Factor partnered with Blippar to make its entire range scannable through the app. By scanning a product, customers will gain access to related content, including reviews, tutorial videos and before and after pictures.

ARKit is Apple’s augmented reality development platform for iOS mobile devices. Burberry partnered with ARKit adding a function to its app that interacts with users’ camera feeds to digitally redecorate their surroundings with Burberry-inspired drawings by the artist Danny Sangra.

MODIFACE, acquired by L´Oréal in March 2018, is an augmented reality-based application that allows users to simulate live 3D makeup, skincare assessment and photo-realistic hair coloring.

Modiface and Sephora (March 2017)

HOLITION: Formed as a venture start-up to explore and expand the role that technological innovation can play in communicating with today’s new digital consumer, Holition is a synthesis of luxury marketers, retail specialists and cutting edge leaders in 3D technology (e.g. Magic Mirror, Virtual try-on).

VALTECH is a digital consultancy providing strategic business solutions with technical power & creative edge. Above you can see how Decathlon used VR, and developed by Valtech, to show their Quechua Tents.

SYMPHONY RETAILAI is a global provider of Artificial Intelligence-enabled decision platforms, solutions and customer-centric insights that drive validated growth for retailers and CPG manufacturers, from customer intelligence to personalized marketing, and merchandising and category management, to supply chain and retail operations.

IN CONTEXT SOLUTIONS is specializing in enterprise mixed reality solutions for total retail optimization. With the power of ShopperMX™, an enterprise mixed reality platform, clients can ideate new in-store concepts, evaluate with test shoppers, and activate those concepts to market.

TAKELEAP is an Interactive Marketing and Technology Media agency with expertise in Virtual Reality, Artificial Intelligence, Projection Technologies, Hologram, App Development and Augmented Reality.

So, it´s clear and it´s not about the future. AR and VR are already powerful technologies for brand-consumers interactions.

Read more about Fashion Technology in The Fashion Retailer:

• Artificial Intelligence in Fashion Retail
• 3D Printing in Fashion Retail
• Blockchain in Fashion Retail
• Internet of Things in Fashion Retail

The Fashtech Ecosystem