Virtual Wardrobes, Closets & Configurators by Matthew Porter

June 2010

B2B White Paper

Virtual Wardrobes, Closets & Configurators

A business briefing for online fashion executives, eCommerce sales, marketing and merchandising. Dr M.E Porter B2B UK

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VIRTUAL WARDROBES, CLOSETS & CONFIGURATORS

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Contents Executive Summary

Business Case

      

We Will Make One Photography Units Per Transaction Model, Mannequin or Me? Turnaround Leveraging Digital Assets Across Social Media Customer Experience & ROI

4 5 6 7 8 9 10

A History: tried, tested and trusted

Current Contenders

Comparison Chart

The fashion industry is still some way from realising the full potential of outfit configuration. There is an undeniable logic in allowing customers to research, engage and purchase, wherever they are online.

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Executive Summary The online fashion sector is only just beginning to wake up to the benefits of empowering customers to personalise their own shopping experiences, enabling them to create outfits by clicking on product images to dress a model or mannequin image. Very little historical data exists, such is the recent uptake of this technology but early figures show Average Basket Value uplift of around 30% plus harder to measure increases in customer satisfaction – making virtual wardrobes sure-fire future phenomena for online visual merchandising and eCommerce. This study takes a quick look at this innovative technology and compares the current contenders for ‘king configurator’ between four UK providers (No Need 4 Mirrors, Mix Match Me, Metail and Schway), one Swedish competitor (Looklet), one US contender (Couturious) and an Estonian entrant (Fits.Me). Polyvore has not been included in this comparison as it is more a mood board than a configurator, even though its early popularity is undeniable. All products have been judged using the following criteria. We will see that the configurator offering clearest advantages and opportunities to online fashion retailers in the Schway application for several reasons (see p.12):           

Most intuitive and immersive GUI Clearest navigation Most advanced functionality Fastest to load Easiest to integrate No extra photography required Can display various models and/or mannequins Fastest turnaround Social media add-ons Best price Best ROI

There are great opportunities for fashion retailers to join the likes of Boden, French Connection, H&M and Next and embrace this new technology which should only need integration (to ensure accurate stock levels, prices and product information) to then plug-in and measurably increase:    

Customer satisfaction Conversion rates to sales Both units per transaction and average basket values Brand engagement across social media

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Business case Or frequently asked questions from eCommerce Directors

We will make one. Tell Dave the developer to do it.

I sincerely advise you not to make this mistake and send poor Dave the developer into a blind panic. The apparent simplicity of product layering belies the complexity of masking, coding, database design and usability involved. To set such a task to your development team would, in all likelihood, end in tears of frustration and not enhance your visionary reputation. Indeed, this is the main reason why such a logical solution to online fashion personalisation and upselling has not come to the market place sooner. In fashion, the ‘look’ is all and believe me, it is far easier to ruin brand reputation with a clunky and slow app that does not display properly than to enhance it with a well-developed and intuitive solution. The idea is simplicity itself but the execution and enough attention to detail to convince fashion shoppers to purchase within such an application is where the real challenge lies. The majority of providers listed here have only recently been active in the market and started to attract customers within the last eighteen months. Certainly uptake has not been rapid in that time but the business logic is undeniable and we are witnessing the first wave of a new way of shopping for fashion online. Among many of the current providers there are still bugs and glitsches: where footwear cannot be displayed on the model, where the shoulders of a shirt can be seen poking out from under an overcoat and where endless layers can be worn without looking like an overweight Inuit. Also, the business models vary between providers from licence fees, per item fees, affiliate percentages and set up fees. A winning and convincing business model is yet to emerge as all providers still try to break into a fashion industry, with super-slow decision-making due to small, inexperienced eCommerce teams being understandably over-cautious in the dark depths of a recession. It’s not easy; even though the fashion sector remains the strongest performing retail sector online and industry insiders are predicting that by 2016 the UK online fashion business will account for 13% of the fashion market and be worth some £6 billion. IMRG Capgemini e-Retail Sales Index. April 2009.

Tip: at the end of each section I would like to offer the eCommerce exec handy tips to think about when selecting configuration technology

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Photography. We want to re-shoot your entire catalogue.

This is most serious argument and issue against the uptake of most outfit configurators. All but two of the providers listed will ask you to send your products to their studio (or they will visit you) and shoot (or re-shoot) your entire collection again. This is clearly so that each product is seen to fit the model or mannequin. However, in such a fast-paced industry I believe that any company that wants to offer configuration to the likes of M&S, ASOS or Tesco for example would be laughed out of the room. They cannot ask to re-photograph that which has already been photographed. Such a painful and slow process is reserved for magazines – where one sample does the rounds from magazine editor to editor, from stylist to stylist and with luck will end up back at retail HQ, battered and bruised from the manhandling. It is not a scalable process and in all probability the cost of all that extra photography is going to come right back at you, the eCommerce Director. Also the danger of success for the provider may mean that at such a business critical time as the approach to Christmas; for example, there are too many risky links in the chain from the merchandiser sending stock, to the van driver, to the photographer and on and on.

Tip: if the outfit configurator provider relies on any extra photography being taken for their application, then they are not seeing the bigger picture. Do not waste your time, energy and resources on such a provider but advise them to redevelop or hire an army of artworkers to Photoshop your current photography (but don’t pass the costs back, please)!

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Units per Transaction. Let Customers Buy Outfits

Clearly, as the online shopper interacts with product images, they are forming an emotional attachment, investing time and creative energy to complete a look or combination. This is similar to successfully completing a game level or a crossword. Shoppers are more inclined to purchase product that they have spent enjoyable time arranging, combining and creating. It is surprising to remember that all online fashion retailers display their products in row after row, one item at a time. It is also surprising to remember that ecommerce platforms have been set up so that singular product after singular product are placed into the shopping basket. Outfits are made up of five, six or even seven products – why can’t I place the lot into my basket in one fell swoop? There is a clear division here from the in-store experience, taking several products into the dressing room, putting a look together, discarding some and buying the rest. In these times of online personalisation, where we can build a profile page, or blog and reconfigure pages to suit our style, it is astonishing that, when shopping, I cannot see whether this top goes with these trousers! Configuration is the next logical step for retailers and merchandisers to offer to their customers – a new way to shop, a visual experience for consumers, cross-selling, upselling and out-selling. Make sure the configurator provider has API documentation for you to hand to your eCommerce platform provider. It makes everyone’s work easier and more straightforward.

Tip: for easiest and pain free integration with your eCommerce provider, ensure that the configuration provider has tried and tested API documentation. Integration itself is neither expensive nor time consuming. Essentially, this is an exchange of product attributes (layers) and product feeds (price, stock and information) necessary to bring the application to life on your site.

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Model, mannequin or me? Which sells more?

Don’t be fooled into peeling the onion of personalisation. Fashion is about aspiration to the look or the lifestyle. Retailers want to sell more clothes. Shoppers want to look fabulous. They do not want to see their face or flab before they purchase. The next wave of configurators will promise such personalisation but again, be warned. Let social networks and other media deal with how customers’ details are displayed. All but one of the current applications which show models are, in reality, mannequins, Photoshopped with different skin tones and heads stuck on. You can clearly see this from the mannequin position – which does not change no matter what you dress them in. This raises a problem of styling and display, as all product photography and display on the model becomes uniform – see the same application on Boden and Next. Is product alone sufficient to differentiate brands? The debate as to which sells more in merchandising: models (brunette or blonde) or mannequins (headless or posed) will go on and on. Current thinking points to brunette models being on top. Some say that blonde models are unpopular with female shoppers who are more likely to judge themselves unfavourably against a blonde model and tend not to purchase. None of the current providers has yet proven that they can deliver an application which displays fashion on different shaped, sized and coloured mannequins or models. Schway comes closest with a variety of applications showing real models and different mannequins. It would be a powerful offering from retailers to enable their logged-in customer to choose their own size, shape and colouration and then to see only products which fit and suit a perfectly presented mannequin or suitable model. That would be ideal personalisation from the retail and consumer perspectives. It would also allow inhouse stylists to assist shoppers with targeted advice, rather than the ‘one size fits all’ tips and upsells that are suggested these days. This is similar to filtering the results of a search: X shape x Y size x Z colouration = personalised style suggestions (+ great customer service + more sales)

Tip: ask your potential provider whether they can provide you with an application that can change through the seasons to show a model (perhaps a celeb model for a capsule collection) or a mannequin and how configurable they are.

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Turnaround

Today’s fast fashion boasts hundreds of products per week, flying in and out and whereas most retailers do not display anywhere near as many products as ASOS or Tesco for example, it’s clear that outfit configurators need to keep apace with sales instore and online. The Chief Executive of one provider boasted 3 weeks to process 300 products – which would mean that many products would have sold out even before they appeared in the application! This particular provider, being reliant on its own photography, does not even shoot full inventory, so heaven help them if they were to land one or two majors. Speed is of the essence. What goes live online must also appear in the app at the same moment to avoid confusion and customer disappointment. This also calls into question how much of your catalogue to include in a configurator. Why not all of it? Why are some retailers already using this technology only including a quarter of their product line – another argument against those providers who need to take extra photography to make things fit?

Tip: If your provider cannot handle the volume and pace that your web team are working at, go elsewhere. Outfit builders should provide enhancements to your site, not piecemeal, incomplete and unsatisfactory shopping experiences. Ask them how long it would take to process 100 products (including various colourways) to get a good idea of how fast or slow they are compared to your current operations.

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Leveraging Digital Assets across Social Media

Ask yourself what happens with that digital photograph of your product. Track its journey from photographers lens to your site and beyond. How often can it be seen, where and by whom? Is it really working for you? Outfit configurators mean that shoppers are actually engaged with product, using them, combining them, sending to friends and buying them. What’s more the longer they are engaged, the more likely they are to purchase, according to Eyeblaster, Microsoft Advertising and comScore. “Higher Dwell rates were found to increase conversion rates. According to the report, increasing the amount of time consumers spend on-site by as little as 5% to 15% can increase conversion rates by as much as 45%. Eyeblaster defines 'dwell' as the entire course of action a consumer takes on-site prior to making a purchase. So, from the time a consumer clicks on an ad, surfs to a website and engages with content to the time they finalise a purchase. Researchers found: • High Dwell rates increased traffic by 69% • Ad placements in areas where consumers 'dwell' longer causes them to stay online longer • News content, instant messaging, map sites and children's sites all have high dwell rates ‘It's

encouraging to see the same metric applicable to different marketing objectives,’ said Gal Trifon, Eyeblaster CEO and co-founder. ‘The connection between engagement and conversions emphasises the value of digital display as a response medium, while the joint research with Microsoft Advertising shows clear branding correlation.’ What all of this means is that consumers need to engage with a website, whether a content hub or a product information area, before they will convert to a purchase. Nothing new there. What is new is the disparity between high-dwell and conversions and low-dwell and lower conversion rates. BizReport 10th May 2010 by Kristina Knight http://www.bizreport.com/2010/05/why_marketing_strategy_should_measure_more_than_clicks.html

Now imagine the ROI on the same product image as it makes itself available to all your fans on Facebook, on your mobile app, as sticky content on an embeddable app in online fashion magazines and even as content on in-store touchscreen kiosks. All of a sudden the image is working for you and worth a lot more than the £10 you paid for it.

Tip: Any configurator you choose for your operations must be able to use your current product images. Sure, there may be a tweak in collaboration with your photographer but nothing more.

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The Customer Experience & ROI

Fact. Offline shoppers walk into a store, perhaps ask questions: looking, touching and trying products at their leisure. They can do so with any product. The majority of customers, with intent to purchase, will take more than one product into the dressing room prior to purchase. So, why do retailers not extend this process online? Online shoppers must be given the same opportunities, indeed many of them are shopping online as they do not have the time to visit the store! Just as the zoom function is expected to be present these days on any fashion site, it will be an essential requirement that retailers offer such personalisation to their customers within the next two and half years. The accumulated data is the equivalent of following each and every in-store visitor and recording what they look at, touch, try on, combine, covet and would like to buy. Again, there is very little historical data to work with but such pre-purchase data can provide visual merchandisers and marketers with powerful information on customer preferences and behaviour. As those who shop online can still be viewed as early adopters, collections ‘prereleased’ online could provide invaluable metrics to inform offline marketing and merchandising – who is looking at what and why? Also The mixing and matching, the combining and contrasting of fashion online is a purely visual feast which crosses continents and communicates with all of us who care about what we wear. With retailers anxious to move into new markets and delivering abroad, it cannot be too difficult to offer different language version applications. Indeed, it is only the product description, currency and size which need to be translated!

Tip 1: Ask your dress-up app developers whether they provide customer behaviour data records as standard.

Tip 2: make sure the configurator database is UTF-8 compliant to support all regional UTF-8 character sets (including languages and currencies).

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A History: tried, tested & trusted The concept for dressing a figure dates to when paper figures were first recorded in ritual ceremonies in Asian cultures in 900AD. The first manufactured paper doll was Little Fanny, produced by S&J Fuller, London, in 1810. The first American manufactured paper doll was The History and Adventures of Little Henry, published by J. Belcher of Boston in 1812. In the 1820s, boxed paper doll sets were popularly produced in Europe and exported to America, principally for children. The 1930s thorough to the 1950s can perhaps claim the title "Golden Age of Paper Dolls," as their popularity during those years has never been equalled. Even during the US depression, paper toys could be afforded by all. Despite the product shortages of World War II, paper dolls were still manufactured, though on lesser-quality papers. Parents of the 1950s revered the image of little girls lovingly playing with paper dolls, just as their mothers and grandmothers had before them. The precise modern-day equivalent of Little Fanny is Stardoll. Its variations on paper dolls and dress-up games help attract 7.8 million unique visitors a month to a Web site that is published in 15 languages and combines elements of a social network and a virtual world. The majority of visitors are girls. The average age is 13.8 years, spending spend between two and two and a half hours a month there. Stardoll has 7,144,735 members and is adding 20,000 new members a day. Serious business as the site took $4 million in Series A funding from Index Ventures in February 2006, and $6 million in a B Series round lead by Sequoia Capital in June the same year. In case you thought that this was irrelevant to the current online fashion market, you should realise that all those young girls (and boys) who visit such sites and very many others (just Google ‘dress up games’) are all growing up and in no time at all will be demanding the same interactivity when they shop for real fashion online. Polyvore does not feature here as it is, at best a mood board, with no central figure and offers no configuration. However, its success illustrates how users want to interact and engage with fashion brands.

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Current Contenders I would like to congratulate the following companies and applications, before criticising them. They have seen the potential of a huge, growing, worldwide market and they have coded and designed, developed and produced in order to get a slice of it. They are pitching to an extremely slow-moving online fashion machine, hampered by traditional thinking and small, inexperienced eCommerce teams. They are pioneers, perhaps only the first wave but from their ranks leaders will emerge and others with unwieldy business models or lack of attention to detail will fade.

Scoring: Each company was scored out of a total possible 10 points per category. The best overall product is that with the highest score. One of the applications had not launched at time of going to Press therefore not all details were available.

Social Media

Turnaround

Model or mannequin

No photography

Load speed

Looklet

MixMatchMe

NN4M

n/a

Couturious

Fits.Me

Metail

n/a

ÂŠ M.E.Porter 2010

ROI

Price

Integration

Schway

Navigation

Companies

GUI

Rank

Functionality

Top 7

Total

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Schway http://www.schway-fashion.com Rank #1 London UK 48 Charlotte Street, London W1T 2NS The only configurator which offers complete flexibility – no extra photography required and the display of various shaped and sized models or mannequins. Fastest to process and most scalable operations. Overall, best value and most efficient processes. Contact info@schway.net Strengths

Weaknesses

 Web design and app presentation of  Would like to see this and all such apps highest quality display various skin tones  Extensive functionality for users  Does not require extra photography  Displays models or mannequins of any size and shape  Price ticker  In-built messaging  Facebook, iPhone and touchscreen apps

Looklet http://looklet.com Rank #2 Stockholm, Sweden Looklet AB, Blekingegatan 14, 118 56 Stockholm Strengths

Weaknesses

 First customer is H&M  All photography must be taken in Sweden  Web design and app presentation is very  1 mannequin style high quality  Need to take specific mannequin shots so will  Extensive functionality for users face problem of persuading retailers to pay for extra photography

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MixMatchMe http://www.mixmatchme.com Rank #3 UK 2 Sheraton Street, London, W1F 8BH

Strengths  Customers Connection

Weaknesses -

Boden

and

French  Need to take specific mannequin shots so will face problem of persuading retailers to pay for extra photography  Limited functionality  Fixed model/mannequin choice  3 weeks to process 300 products

No Need 4 Mirrors http://www.nn4m.co.uk Rank #4 UK 149 The Street, Rushmere St. Andrew Ipswich, IP5 1DG

Strengths

Weaknesses

 Customers – Oasis, Matalan, Coast,  Limited functionality for users Karen Millen  Unsatisfactory user experience  No additional photography costs to  No display of mannequin or model retailers  Already on Facebook, Bebo, iPhone app

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Couturious http://www.couturious.com Rank #5 US based 149 Like.com, 777 Mariner's Island Blvd, Suite 510, San Mateo, CA 94404.

Couturious arrived suddenly in February this year in extremely suspicious circumstances. Like.com, the new owner, tried to acquire the Swedish, Looklet in 2009 and was rejected. This, according to Adam Berg (Looklet CEO) ‘led them to this desperate copycat action’. Apart from the glaring lack of original ideas, Couturious doesn’t show much of the quality or attention to detail, essentially the love for fashion we’ve put into Looklet. Considering the feedback we’ve received from users and the industry, all others recognize this as well. To quote a user; ‘If Looklet had an ugly sister Couturious would be it.’ Certainly in their early days, Like.com announced that they had ‘learned to hack’ the JPEG. Perhaps this is how they copied Looklet so entirely? Strengths

Weaknesses

 Very similar in style to Looklet

   

Very similar in style to Looklet All photography must be taken in NY 1 mannequin style Need to take specific mannequin shots so will face problem of persuading retailers to pay for extra photography

Fits Me http://fits.me/ Rank #6 Estonia Veerenni, 24C, 10135 Tallinn, Estonia

Strengths

Weaknesses

 Surprisingly has won EU funds to develop

    

Retailers to change current processes Must take 20+ photos per product Unimpressive, unconvincing visual result Only showing male torso No mixing and matching

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Metail http://www.metail.co.uk/

Screenshot unavailable

Rank #7 UK based 6 Keeling House, Claredale Street, London E2 6PG Strengths

Weaknesses

 New entrant  Already has secured some funding

 No working demo  6 shots required per item (demo video)  Need to take specific mannequin shots so will face problem of persuading retailers to pay for extra photography

Dr. Matthew E. Porter This was a private study carried out to inform a colleague within online fashion and was only published after encouragement from her. Porter held the position of Senior Application Developer for World Wide Tech and previously held senior engineering positions at Telco and IBM Global Marketing Services. Most recently served as Director of Professional Services for Demand Management and built a team of senior developers and consultants to implement the next-generation of enterprise supply chain management. Contact: drmatthewporter@gmail.com

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