x
Fashion Tech Series
THE EVOLUTION OF RETAIL
Presented by
INTRO
ABOUT THIS SERIES Metaverse, NFTs, machine learning, blockchain…
What does it all mean? Change is happening fast. Not only are business realities in constant flux, but technological innovation is moving at an even more rapid pace. The time for digital transformation isn't the end of the decade—it is now. MMGNET has teamed up with the global forecasting agency Fashion Snoops to present this multi-part series that breaks down the latest and most relevant technologies and tells you exactly how they can be applied to the key areas of the fashion vertical: (1) Sourcing + Supply Chain, (2) Design, (3) Retail, and (4) Marketing. In each report, we demystify the latest technological developments shaping the year ahead, from artificial intelligence to Web3; define opportunities companies should consider; and highlight specific success stories from those already forging a new path forward. In addition, readers can find various resource lists outlining potential vendors, partners, and solutions providers to have on their radar. The preservation of the fashion industry is a product of interconnected functions, systems, individuals, and organizations that are all moving in different directions and at different speeds. At the most basic level, digital transformation can open up the parts of the whole to communicate faster and more fully, and even the smallest updates and tweaks internally can lead to profound benefits on the consumer end. Collectively, these changes can lay the groundwork for us all to step into the future.
SUPPLY CHAIN
TRANSFORMATION
NEW AGE OF DESIGN
THE EVOLUTION OF RETAIL
x
MARKETING INNOVATIONS
INDEX
The Evolution of Retail
Driven by the demand of online shopping, perhaps no other sector of the fashion industry has transformed faster than retail. As the lines between digital and physical continue to blur for consumers, the omnichannel will need to respond with a united front, equipping every touchpoint with similar convenience and functionality.
Artificial intelligence and 3D technologies can help to integrate the storefront, powering virtual try-on and personalized customer service at scale. Given advancements through all areas of technology (e.g. the web, machinery, software), new retail models and interfaces are emerging every day; and businesses will need to combine digital agility with creative thinking to meet the future customer wherever they may be.
1
The Phygital Store Enhancing the in-store experience with customer-centric technologies
2
3
Made-to-Measure Fit tech fuels customer confidence and next-gen bespoke models
4
Social Commerce Recapturing the social aspect of shopping on digital platforms
x
5
Intelligent Recommendations AI-driven personalization forges memorable, frictionless commerce
Virtual Try-On Digital visualization solutions strengthen the path to purchase
1
The Evolution of Retail
The Phygital Store Enhancing the in-store experience with customer-centric technologies
Blending together the best parts of digital and physical experiences, the next chapter of retail shopping offers consumers a more personal, interactive, and intelligent process. Online purchasing during the pandemic accelerated the development of immersive technologies like AR and VR, inspiring brick-and-mortar locations to rethink the retail experience as consumers return to in-store shopping. The tech-infused ‘phygital’ store offers the chance for deeper customer connection, as they collapse traditional boundaries and create a one-of-a-kind experience that can be modified or adapted to individual preferences and needs. Combining this unique approach with responsive digital technologies creates an informative and engaging experience for shoppers, while allowing stores and brands to communicate a fuller story.
x
1
The Evolution of Retail
The Phygital Store
Innovations + Applications
Example Amazon has translated
Example
their digital-first approach Beauty brand Lush merged
to a number of
technology with
brick-and-mortar
sustainability with their AR
innovations, the latest of
app Lush Lens, a digital
which is the Amazon Style
EXTENDED PRODUCT TRANSPARENCY
store. Various technologies
ANTICIPATE SHOPPER NEEDS There is vast opportunity for brands and retailers to rethink the role of brick-and-mortar and call on technologies to enhance the in-store experience. For example, the general pattern now is for consumers to touch and try on merchandise in stores but shop for deals and complete the purchase online. How can you accommodate these different needs and habits in store and create an integrated experience across all of your digital and physical touchpoints?
are used to optimize every
packaging solution that highlights the company’s commitment to eco-forward
step of the shopping
QR codes can be used to activate web and app experiences that align with industry-wide transparency initiatives. There is only so much that can be communicated on the sales floor; but these simple integrations have the ability to open up deeper experiences for your most engaged customers or shoppers who desire to know more about ingredients, origins, sustainable practices, and other concerns—all while alleviating some of the pressure on sales associates.
process and create a seamless omnichannel experience, such as QR codes on products that customers can scan to save items to their Amazon account, touch screens where shoppers can browse online or request service, and automated checkout options.
x
innovation. Customers can simply point their phone camera on the actual product and the app serves up details like ingredients, pricing, and even how-to videos. Available in several languages, the app also provides an important service to international shoppers.
1
The Evolution of Retail
POINTS TO KEEP IN MIND
The Phygital Store
Resources
Anyline Enables self checkout via a ‘Scan and Go’ app that can easily be paired with any
●
store
66% of consumers look towards AR for help when shopping.
BOX by Posti
●
Studies indicate that over half of Millennial and
A self-service “store” initiative by Finnish shipping company, combining storage
Gen Z consumers are likely to avoid shopping at
lockers, a fitting room station, recycling center, and re-shipment center that aims
stores that do NOT offer contactless payment
to offer an easier way to shop online
options.
Cappasity
●
Integrating technology into stores should be done
An immersive showroom platform that allows clients to easily create 3D
with purpose—think critically about your
experiences to effectively blur the line between online and in-person shopping
customers’ priorities (i.e. Is it speed, convenience, brand immersion, sustainability?) and then explore tech that best aligns with those needs.
MySizeID Maker of the FirstLook Smart Mirror, which can serve a number of functions in store, such as virtual try-on, intelligent size and style recommendations, and contactless checkout
●
At the most basic level, QR codes can be used to facilitate a number of enhanced store experiences, from connecting to additional customer service channels to signing up for a spot in the fitting
Standard AI
room.
Offers autonomous checkout solutions that use AI-powered computer vision to recognize shopper patterns
x
2
The Evolution of Retail
Social Commerce Recapturing the social aspect of shopping on digital platforms
Online shopping is no longer bound to brand e-stores or marketplaces—new POS interfaces are emerging every day, such as personal messaging, streaming services, and, most notably, social media. Social platforms are making it a priority to shorten the distance between promo and product purchase by providing native commerce capabilities. Popular networks like Instagram and TikTok are continuously introducing new tools and processes to facilitate in-app purchasing and livestream shopping. In addition, new platforms are emerging with the explicit goal of combining commerce with community. Social commerce conversations have mainly centered around the potential of shoppable video, as short-form videos are regularly found to drive the highest user engagement. Livestream shopping has already become a $600 billion industry in China and is expected to account for $35 billion in US sales by 2024. Entertaining, easy to digest, and engaging, social commerce offers an opportunity for brands to interact with customers on a more personal level and build stronger communities.
x
2
The Evolution of Retail
Social Commerce
Innovations + Applications
Example Hoping to capture
Example
China’s enthusiasm for
Sept is a social media
livestream shopping in
platform and fashion
the Western market,
marketplace where users
social commerce startup
can interact with one
SHOPPABLE VIDEO
another by sharing their
ENCOURAGING CUSTOMER NETWORKING
shopping baskets,
While shopping malls once made commerce a social activity, the growth of online outlets has turned shopping into a mostly isolated, unengaging experience. Social media platforms are integrating commerce as a central point of user interactions, creating a more interpersonal experience for communities of online shoppers and fashion enthusiasts.
purchases from
As users turn to consuming more video content, brands have an opportunity to sell products online in a more personable, dynamic way. The video format gives customers a visually rich, easy-to-consume channel to discover products with a candid, homemade feel. Shoppable video is not limited to livestreams, but can also be applied to pre-recorded, short-form video content and digital ads on streaming platforms.
purchases, and wishlists. Users can also make
partnered brands directly through the app’s universal checkout.
x
Whatnot has reached a valuation of $3.7 billion. Whatnot has cultivated loyalty from niche communities for unboxing content for sneakers, sports memorabilia, trading cards, and more.
2
The Evolution of Retail
POINTS TO KEEP IN MIND
Social Commerce
Resources
Firework
Lets brands easily integrate videos that are live, shoppable, and interactive into their website or e-commerce site
Flip
●
While livestream shopping has been adopted on
Product education and commerce platform that allows creators to review
a mass scale in the Asian market, companies are
products and then customers to purchase directly from community content
still experimenting with the format to find its best use in the North American market. For example,
Galaxy
Facebook and TikTok have both drawn back on
Livestreaming secondhand shopping platform specializing in vintage, handmade,
livestream shopping initiatives to reevaluate their
and upcycled garments and accessories
strategies.
Orca Platform offering retailers curated boutiques, livestream selling opportunities, and
●
easily accessible link-in-bio boutiques for cross-platform use
Customers are shown to have more trust in assets that show product in action; so to start, brands and retailers can incorporate videos into
Sept
product detail pages. Estimated to reduce
Social platform and marketplace where users can interact with one another by
returns by 50%, livestreaming can go one step
sharing their shopping carts, purchases, and wishlists
further in strengthening shopper confidence by providing a forum for customers to ask questions
TUNL
and voice concerns on the spot.
Facilitates wallet-to-wallet influencing
Whatnot Social marketplace allowing users to buy, sell, livestream and bond with other shoppers and collectors with similar interests
x
3
The Evolution of Retail
Made-to-Measure Fit tech fuels customer confidence and next-gen bespoke models
As online sales grew during the pandemic, so did returns. In 2021, US retail returns totaled $761 billion, with the apparel category ranking second in returns. The main reason behind it? Incorrect fit. Customers have resorted to buying multiple sizes of the same items in order to find the right fit. A high percentage of these returns are not re-sellable and end up in landfills, generating 10 billion pounds of waste per year. A wide array of new technologies at both the enterprise and consumer level are targeting this major pain point. These include smarter sizing questionnaires, machine learning algorithms, and easier 3D scanning methods like smartphone-powered photogrammetry. Brands and retailers are combining these various approaches to develop in-depth fit profiles that customers can feel confident in. These technologies are fueling a new generation of bespoke retail models that are more affordable and streamlined than previous iterations. At the same time, made-to-measure tech has the potential to significantly move the needle in sustainability, reducing material and packaging waste, as well as the transport footprint.
x
3
The Evolution of Retail
Made-to-Measure
Innovations + Applications Example Denim company Unspun
Example
offers jeans that are
Laws of Motion focused
made-to-order through a
their made-to-measure model
mix of fitting methodologies
around data collected
(e.g. questionnaire, phone
through customer
scanning, in-store
questionnaires and a simple
scanning) and an
‘body scan’ that extrapolates
innovative, low-waste
fit data from just two
END-TO-END PERSONALIZATION
pictures taken by the user. An AI algorithm then
FIT 2.0 In the past, custom fit was associated with luxury fashion. Body scanning tech has democratized fit, allowing retailers and brands to offer bespoke services at scale. Fit technologies also have the potential to revolutionize outdated sizing constructs by truly capturing the body shapes and proportions of today’s customers.
evaluates the user inputs to
Combined with autonomous production solutions, personalized fitting technologies are paving the way for an era of mass customization. These technologies can be easily paired with interfaces at the retail level that allow customers to personalize products, from color to surface details. The result is a more emotionally invested consumer who is less likely to discard products after some time.
pinpoint the closest size from the 180 ‘microsizes’ they offer between the standard range of 00-24. The shape-inclusive platform has resulted in just a 1% return rate for the brand, compared to an industry average that hovers over 15%.
x
production platform that utilizes robotics and 3D weaving. In addition, product pages allow shoppers to customize details on a wide range of denim styles. The result is completely custom-fit jeans at prices that are competitive with off-the-shelf options and take about two weeks to arrive at the doorstep.
3
The Evolution of Retail
POINTS TO KEEP IN MIND
Made-to-Measure
Resources
Aetrex
Recently launched Albert 3DFit scanner, an interactive and affordable foot measurement system for retail stores; also offers an AI-powered platform that matches customers’ foot profiles with the right shoe size and styles
●
It is estimated that customizable apparel could claim 10 to 30 percent of market share by 2030.
FitAnalytics Employs machine learning to match shoppers with size recommendations through a series of guided questions
●
Retailers have been slow to adopt fit technologies, citing high investment costs. To
LikeAGlove
start, businesses can explore their own fitting
Developed a smart measuring short and bra that tracks body changes in 3D to
methodologies by capturing post-purchase
match the right styles and brands for your shape
feedback from customers, collecting in-store insights, comparing sizing across brands, and
Netvirta
tapping into the rapidly improving sensors on
Combines computer vision with a 3D body scanning mobile app to capture more
phones that allow them to accurately measure
precise data points for accurate fit recommendation
3D objects.
TG3D Studio Uses a data-driven approach to create customized apparel—mobile scans
●
Body shapes and sizes evolve over time—and so
capture body measurements to build 3D avatars, which can then be exported to
does the ideal fit. Revisit and update sizing
any design software
constructs regularly and make sure they respond to unique fit and silhouette trends.
Zozo A platform that enables accurate 3D body measurements using a motion capturing suit and smartphone
x
4
The Evolution of Retail
Virtual Try-On Digital visualization solutions strengthen the path to purchase
Virtual try-on (VTO) technology enables consumers to try on digitally created garments or accessories for fit and style without physically wearing the product. Augmented reality has become the go-to solution for virtual try-on, allowing users to superimpose digital representations of products onto their bodies or into their spaces (in the case of the home goods). As online shopping soars to new heights, the ability to visualize before you buy has become crucial to even the consideration stage of the customer journey; and brands and retailers have the opportunity to address this need on various platforms, such as web, in apps, social, email, and even in store via smart mirrors. The latest virtual try-on technologies offer increasingly improved realism, such as 3D body mesh enhancements and new cloth simulations to recreate the movement of fabrics. The growing potential of 3D virtual fitting technology to increase sales and conversions, improve e-commerce experience, and reduce returns has fueled the augmented reality market, which is set to reach $88.4 billion by 2026.
x
4
The Evolution of Retail
Virtual Try-On
Innovations + Applications Example After acquiring virtual try-on platform Zeekit, Walmart has enhanced their online shopping experience with a new feature called Be Your Own Model, which allows
Example
customers to have the option to
Farfetch recently
virtually try on items when
partnered with
ENHANCED VISUALIZATION THROUGH AI
Snapchat to introduce an experience that
DOUBLING UP ON SOCIAL MEDIA AR-powered virtual try-on satisfies needs in both the retail and marketing pipeline, allowing users to visualize how products will look, as well as share out results. More than 200 million individuals take part in AR experiences on Snapchat every day; while in 2021, over 700 million people engaged with AR on Facebook and Instagram every month.
allows users to switch
While AR filters offer a fun, hands-on experience, retailers have an opportunity to remove the friction points of the process and enhance functionality by tapping into the latest AI technologies. For example, IKEA’s updated AR experience now allows users to delete existing furniture in their space at the tap of a button, due to a similar technology that underpins the background removal capability that now comes on new smartphones.
outfits using voice commands, share their images, and purchase the products directly within the social media app.
x
they are on the product page, either through the website or app. The AI-powered experience promises an ultra-realistic simulation in seconds, with detailed shadows and fabric draping that respond to the body’s form. Customers can save images to their profile to automate this virtual fitting room process across a portfolio of over 270k items.
4
The Evolution of Retail
POINTS TO KEEP IN MIND
Virtual Try-On
Resources
3DLOOK
Mobile body-scanning tech company that provides personalized fit and size recommendations and virtual try-on; integrates with Shopify, Magento, and standalone e-commerce stores via a widget or API ●
Perfect Corp
Several studies point to the presence of virtual try-on at retail leading to around a 90% boost in
Artificial intelligence (AI) and augmented reality (AR) beauty and fashion tech
conversion rates.
solutions provider
Poplar Studio ●
Digital agency that provides shopping experiences through visualization technology;
Many businesses have witnessed a significant reduction in returns due to virtual try-on features,
offers 3D and AR previews of products across e-commerce websites, social platforms,
with Shopify, for example, reporting a 40%
and the metaverse
decrease.
Reactive Reality
.
3D digitization technology company that provides unique and scalable online shopping experiences for fashion brands and retailers utilizing their PICTOFiT platform
●
Customer behavior toward e-commerce has changed immensely in recent years, shifting from
TUNL
a transaction to an experience. The new breed of
Facilitates creation of digital avatars that can aid in e-commerce
online shoppers, particularly about 75% of Gen Z
Vyking
and Millennials, want to interact with products
Augmented reality shoe try-on company that uses proprietary 3D foot-tracking
digitally before buying or visiting stores.
technology that can be applied to AR “on-foot” product visualizations
Wanna Startup out of Belarus with a virtual fitting platform powered by neural networks and sophisticated 3D geometry algorithms
x
5
The Evolution of Retail
Intelligent Recommendations AI-driven personalization forges memorable, frictionless commerce
As consumer adoption of e-commerce continues to accelerate and people seek more phygital retail experiences, AI-powered tools are bringing accuracy to product recommendations and greater ease to purchasing decisions. In the same ways that algorithms on popular media platforms like TikTok, Netflix, and Spotify have mastered their users’ wants, customers now expect a bespoke retail experience, personalized to their specific needs and interests, whether online or on the shop floor. In a survey of more than 46 fashion brands, AI-driven personalization came out on top as the main enhancement made to online stores last year. As more brands incorporate intelligent recommendation systems into their touchpoints, hyper-personalization and AI assistance is quickly becoming an industry standard.
x
5
The Evolution of Retail
Intelligent Recommendations
Innovations + Applications Example Renovai’s ‘Complete the
Example
Look’ offering acts as an
In a new retail strategy,
AI fashion stylist, curating
BevMo! has brought
assorted products and color
hyper-personalization to
palettes for customers
their physical aisles,
based on their past
deploying an AI-powered
purchases, wider
voice assistant to
preference insights, brand
COMPLETING THE LOOK WITH AI
recommend whiskeys to customers based on
OMNICHANNEL PERSONALIZATION
preferences, budget, and
Milestones in artificial intelligence technology open the door for more precise and responsive product recommendation systems. While these systems have traditionally powered online shopping, there is an opportunity to deploy them in physical stores, as well, via in-store tablets, voice assistants, and smart mirrors.
assistant can also answer
occasion. The AI
styling guidelines, and trend and performance
E-commerce shoppers often miss
data. Renovai displays a
out on the expertise of in-store
visual curation of related
associates and stylists, who can
products that customers
suggest additional products to
questions about different
accompany their purchases. AI
can easily add to their
whiskeys and tell jokes to
styling and product coordination
carts, making the shopping
systems fill this need in the
process more intuitive,
customers, creating a
e-commerce space by learning from
while increasing
truly memorable store
data points provided by the
experience.
customer, other shoppers, and the
opportunities for
retailer to make recommendations
cross-selling.
based around style preferences and more functional needs.
x
5
The Evolution of Retail
POINTS TO KEEP IN MIND
Intelligent Recommendations
Resources
Coveo
Equips e-commerce sites with AI tools that collect data from customer interactions to deliver product recommendations, dynamic navigation experiences, query suggestions, and more
Renovai ●
Provides customers with a visual curation of product recommendations with its AI
As growing privacy concerns lead to potential restrictions on consumer data capture, there is an
styling system
opportunity for businesses to explore more
Easysize
hands-on methods that can result in deeper
AI-driven algorithm aimed at assisting consumers with accurate size selection while
insights, such as surveys, social listening, and
shopping online
rewards programs. As always, it is important to be transparent about what data is being captured
Lily AI
and how it is being used.
AI tool for ecommerce that streamlines search results by systemizing qualitative product attributes and predicts customer preferences based on shopping behavior
Limespot
●
71% of consumers now expect personalization
Personalized digital experience and product recommendation system that can be
from the retailers they shop with, and almost 80%
implemented throughout touchpoints like the homepage, product page, shopping
are frustrated when they are not met with
cart, post-purchase, and email marketing
personalized features.
MySizeID Offers a MySizeID Widget that can be integrated into product pages to deliver personalized size recommendations based on customer inputs
TUNL Offers personalized shopping solutions that build on past purchases
x
The Evolution of Retail
CASE STUDY Sponsored by TUNL
How NFTs Can Power a New “Experiential Commerce” Landscape TUNL is a Web3 company that is building a no-code, token-enabled commerce platform that brings to life a new concept they call "Experiential Commerce." In this Q&A, LJ Northington, founder and CEO of TUNL, explains how the company is forging long-term use cases for NFTs as a catalyst for community and business growth.
How does the way that TUNL uses NFTs differ from the crypto artwork that people
Concept artwork (displayed brands may not be TUNL customers)
typically associate with the technology? TUNL believes NFTs should be tied to the central nervous system of a business,
How exactly do you think that NFTs can help build community and
instead of short-term revenue or marketing. Most platforms focus on helping
customer loyalty?
brands sell NFTs as a new product line. At TUNL, we do not sell NFTs—we package
NFTs can support new membership models that create a community of VIP
them with existing products. On a TUNL-powered website, every purchase comes
customers who are treated as part of the brand. Direct communications with
with a free NFT, which promotes wider and ongoing distribution and utility.
NFT holders can allow brands to get customer feedback on future products via voting and surveys. NFTs can also establish a sense of shared identity,
What advice do you have for brands looking to get started in the Web3 space?
giving communities a common rallying point across the internet.
First, know your goal. Then work backwards to see where NFTs can help you accomplish those goals. Some goals we commonly see where NFTs can help
What do you think will be the long-term impact of NFTs on the fashion
include building community, appealing to Gen Z, preparing for the metaverse,
industry?
and increasing customer lifetime value. Second, know your strengths. Brands
NFTs allow ordinary customers to have agency in brand direction and a
already rely on platforms like Shopify and Stripe to handle tech builds, and we
vested interest in the brand’s success. I think this framework lays the
recommend that they take the same approach with NFTs. Find a trusted platform
foundation for “members-only” fashion brands that contribute success to a
that offers a turnkey solution instead of trying to build it yourself. Third, know your
thriving community. Ultimately, NFTs will play a role in changing e-commerce
audience. We’ve seen brands spend a ton of resources on NFT programs that end
interfaces—something that hasn’t been done in decades. As NFTs, 3D spaces,
up being too complicated for their core consumer. Your goal as a brand should
and AR/VR hardware progress, we’ll start to see this concept of “Experiential
be to make your NFT program as easy to use and understand as possible.
Commerce” emerge.
x
Fashion Tech Series Explore the rest of the series
SUPPLY CHAIN TRANSFORMATION
NEW AGE OF DESIGN
From blockchain-backed sourcing
Deep dive into the new technologies
to logistics automation, discover
that are pushing the boundaries of
the innovations that are driving a
creativity, such as AI-aided design
more efficient and sustainable
and collaboration in extended
supply chain.
reality (XR) worlds.
x
MARKETING INNOVATIONS
From Web3 to the metaverse, learn about some of the hottest tech topics and what they mean for the future of consumer engagement.