PERSONALIZATION

Brands and retailers should integrate advanced technologies to drive personalization and sales

2.0Personalization

IntroductionIn today’s age of digital disruption, the online fashion

industry is undergoing drastic changes. With digital

commerce transforming retail as nothing has before, high

profile companies are betting on innovative tools and

technologies to transform the consumer shopping journey

into the future – experiential, immersive and engaging.

According to Fitch ratings , retailers are now

facing a 2X greater risk of default than they

were just a year ago. In 2019 retail accounts for

18% of the ‘Top Loans of Concern’ volume, the

most of any sector.

On top of it all, retailers shut down 23% more

stores during the first weeks of 2019 than they

did at the beginning of 2018, according to

Coresight Research . More than 6,000 closings

have already been announced for 2019 and

beyond.

In the current environment, retailers need to

continue to innovate to satisfy customers who

can now choose among a large variety of

competitive products and are looking at all

aspects of the purchasing experience.

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The record returns spikes only aggravate the

overall picture. With 1.5 million packages

shipped back on this year’s National Returns

Day, a lot of e-tailers may soon find themselves

in a shaky state.

In the long run, it is up to each and every

business to decide on how they will innovate in

a competitive environment and bring new

potential to their products. As consumers

choose to invest in experiences rather than

products, retailers need to respond to meet the

needs of their customers.

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Why is this important?

18%

6,000

1.5 million

23%

is the share of retail in ‘Top Loans of

Concern’, the most of any sector

retail closings announced for 2019

packages shipped back on this year’s

National Returns Day

more retail stores shut down this year

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Personalization 1.0 was pretty basic – birthday /

event emails, location-based SMS promotions,

style quizzes, homepage customizations, emails

with product recommendations, or behavior-

defined pop up offers. That used to be enough,

but it’s a different landscape today.

We live in a hyper-connected world and the

modern consumer at the very least expects

hyper-personalized offers and discounts, and

product recommendations on size, fit, color,

and style. The next frontier is experiential and

immersive retail.

The question is: Are you ready to deliver it?

We come in many shapes

01

Today shoppers are faced with a real problem

when it comes to buying apparel and footwear

online. The biggest barriers to online shopping

are lack of consumer confidence and lack of

consumer data. Central to this issue is fit and

sizing which is complicated by a lack of any sort

of industry standard highlighted by varying size

standards between countries and brands.

Current sizing systems covering the globe are a

maze of numbers (0 to 28+ in US, 4 to 28 in the

UK, 32 to 56 in France, 40 to 58 in Russia, 44 to

88 in Korea, 160 to 176 in China - all different).

Alpha sizes (XXS, XS, S, M, L, XL, XXL) are

slightly more standardized except one brand's

M is other brand's L, which doesn't help the

consumer.

Further, the complexities of size charts only add

to the confusion as they rely on the consumer

to either know their measurements or

understand how to correctly measure

themselves (which requires a tape measure and

knowledge of how to use it properly which also

varies by brand!).

Vanity sizing, which is a marketing ploy to make

consumers feel better about their bodies,

complicates the entire process even more. The

result? Many shoppers simply guess, knowing

they can easily return what doesn't fit.

At the end of the day, labels don’t mean anything, it’s now all about our individual and unique human bodiesWhat does an average size mean? Why

are clothes fit to a brand's vision of their

average consumer? How do they even

know the measurements and body

shapes of their consumers? As humans,

each one of our bodies is individual,

unique. Our body proportions are

different and the way we carry fat differs

from person to person.

It should come as no surprise that when

you try and put the incredible diversity of

all of our unique body shapes and sizes

into an average mold, there are going to

be huge problems with product fit.

Fit will never be 100% scientific. Individual

preferences on how products fit combined with

style, color, print, trends, weather, age, gender,

ethnicity all play into how a consumer decides

to purchase and keep a product.

So how do you solve this complex problem?

Get to know the customer who is shopping

your brand. This means understanding all the

important details that make each one of us so

beautifully unique.

Consumer choices in fashion reflect their

personality and it is important for brands and

retailers to meet these expectations and create

a personalized experience that allows the

consumer to share not only what they want,

but also how, where, and when they want it.

Yet without the right tools it’s hard to deliver on

these expectations, even for nuanced retailers

and brands. Poor communication often

prevents retailers from delivering any

meaningful amount of personalization. The use

of customization tools can provide an amazing

experience for new and existing customers

based on individual uniqueness and preference.

Because fashion is all about personality

And then there are emotions

Fit communication shouldn’t be a challenge!

a fully transparent, privacy protected, and non-

invasive manner so that they feel confident that

the products that they are both searching for

and which are being recommended to them will

actually fit.

Importantly, these solutions hit fit and sizing

where they matter most, which is at the product

creation and product development level. Until

now, there simply has not been a frictionless

way for brands and retailers to understand what

their actual consumers look like so that they can

advance design, pattern-making, and grading

rules and introduce a level of personalization

based on actual body data of actual consumers

shopping their stores and websites.

As more and more shopping moves online, the

lack of data exchange between products and

people is producing serious consequences for

brands and retailers. Without clean and

accurate body profile data, brands and

manufacturer's are designing in the dark. This

worked when we all still shopped in stores, but

this model clearly no longer works in the age of

digital disruption. As a result, the spike we have

seen in return rates will continue to climb,

eating away at profit margins.

The use of disruptive 3D mobile scanning

technology has the ability to enable consumers

to digitally share crucial physiometric body data

about their actual measurements and shapes in

Experiential means successful

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The best way that brands can resonate with

consumers is by offering a desirable

experiential shopping experience that feels

authentic, communicative, and personalized.

However, it shouldn’t be limited to offering

recommendations or pinpoint-targeting

promotions. Each year innovation labs and

startups develop disruptive fashion/retail tech

solutions which are helping brands to enter a

new era of ‘retailtainment’, the fusion of retail

and entertainment, that is not only fast, but also

relevant, interactive, and fun.

Brand experience is the frontier of business

differentiation today. The store of the future will

become the most powerful media channel

available to a brand, offering customer

experiences that are the most profitable

product a retailer can sell.

The data that mobile 3D body scanning will

produce will power game-changing

experiences and an entirely new level of

personalization that the customer has yet to

discover. Consumers will be able to create

engaging and social entertainment-like

experiences created by 3D.

By 2035 artificial intelligence is expected to

boost profitability in retail and wholesale by

nearly 60%, setting off a wave of excitement

and investment among companies. According

to estimations , retailers will stand to save over

$300 billion in the future if they scale AI

applications across the value chain.

Every retail business has access to vast amounts

of unexploited data, full of untapped potential.

The ability to retrieve that data, make sense of

it and leverage it efficiently with AI is proving to

be the key to modern business success and

weighs heavily on the future of retail.

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Artificial Intelligence

AI has successfully powered a lot of next-

generation solutions for various domains of

retail including sales and CRM, product

recommendations, manufacturing, payments,

logistics, and delivery.

Neural networks are being trained to

recommend products according to color, style,

size and even body shape of the customer

based on previous purchases and physiometric

data.

Computer vision technologies are also having a

profound effect on retail including facial

recognition solutions, product recognition

insights, and inventory drones.

Together, AI in its many forms has the ability to

boost sales and grow the bottom line by

enabling a level of personalization that wasn't

available just a few years ago.

Mobile 3D body scanningAI-powered retail solutions are oftentimes

deeply intertwined with other technologies like

computer vision, machine learning and 3D to

make the whole process even more convenient

for the demanding shopper. With just a few

photos these technologies capture accurate

body measurements of the customers and can

be used to power fit recommendation solutions

which ultimately increase conversion rates and

decrease the number of size-related returns.

And it all comes down to mobile. So, make sure

you provide an impeccable mobile experience,

which is set to be the top digital priority this

year. According to Retail Touch Points , for the

first time in history mobile shopping eclipsed

desktop. With 88% of all millennials willing to

use their smartphones to shop, retailers should

ensure their mobile applications are dynamic –

quick, engaging and fully optimized.

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Virtual try-onThe advantages of a virtual dressing room

extend to both retailers and their customers. By

enabling customers to virtually try a product

before buying it, virtual dressing rooms remove

the doubt and skepticism around fit, size, and

style choices.

They help businesses create an exciting,

interactive and vivid shopping experience in a

real-world environment, thus enhancing

customer engagement and retention, and

thereby driving sales.

Virtual dressing rooms have come a long way

over the last few years and the rendering

technology is getting better and faster leaving

lots of room for retailers to get creative.

While earlier shoppers based their decisions

mostly on 2D images of clothing put on top of

their photos, they can now get a fully-animated

real-time 3D avatar with accurate product

simulation available anywhere. Most

importantly, it all looks realistic enough for the

customer to equate themselves with their

virtual reflection. They can now take a dressing

room home.

Augmented RealityConsumer confidence alongside the visual

component can be drastically enhanced with

the implementation of AR-based solutions,

when the true-to-life 3D body model is put full

size right in front of the customer. As AR moves

into the mainstream, forward-thinking retail

brands are already incorporating AR

technologies into the customer experience

both in-store and online.

Shoppers enjoy using AR, and they see it as a

fun and novel way to explore their options as

they weigh out which purchases to make.

According to research , 32% of customers are

likely to shop at stores that offer AR

experiences, over ones that don’t. Yet only 9%

of retailers offer AR today, so there's a lot of

room for competition.

Why is that so important? As innovation has

made augmented reality much more accessible

to consumers, brands have taken notice. In fact,

Marketing Dive reports that the combined

spending on AR and VR in the retail industry

will grow roughly 239% annually, which would

make it the top industry for AR and VR spend

by 2020.

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9%

239%

32%

of retailers offer AR today

more is expected to be spent

annually on AR and VR in retail

of customers are likely to shop at

stores that offer AR experience

It’s time to get strategic about retail tech.

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Spotlight: Confidence in Fit

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The inconsistency and complexity of size scales

and size charts from brand to brand makes it

extremely difficult for the customer to find the

correct size online and have confidence that the

product they see and love will fit their body

shape once it arrives on their doorstep.

Consumer concerns around size and fit often

trump brand loyalty.

If people are uncertain about the quality, size,

or fit, they face the confidence gap and buy

less. Weak consumer confidence impedes

online stores from reaching their full potential –

particularly when it comes to clothing and shoe

sales. Fortunately, there is a new ecosystem of

startups deeply focused on personalization

using data to enhance the online shopping

experience.

Just imagine, customers explore your online

store and pick what they like out of the AI-

recommended products. They then examine

the products, check the size by having two

photos processed, and decide on the proper fit

which is best suited to their own unique body

shape.

Finally, they can interact with their 3D avatar in

augmented reality, play with different outfit

combos, and share this new engaging

experience on their favorite social media

applications before one-click purchase and next

day delivery.

These types of frictionless and highly engaging

positive shopping experiences ensure that

customers end up exploring the online store a

little more, adding another item or two to their

carts. Just think about that; not only is this

technology highly experiential and accurate, it

ensures consumers don’t miss the human

component, feel interacted and cared for.

In addition, by using physiometric body profile

data to create better fitting clothing in the first

place, the error margin of human guesswork is

eliminated, which means less disappointment

from poor fit, and subsequently, fewer returns.

Alternatively, positive experience brings repeat

purchase and brand loyalty.

And that’s what the power of confidence is about.

Understanding your True Audience

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Imagine a world where each brand has always

relevant, up-to-date, and accurate data about

their end-customer – their size and shape, style,

preferences, needs and wants. The store

doesn’t just utilize names and birthdays for a

personalized email campaign, but offers

personalization that proves they truly

understand their customers and are prepared

to meet them and delight them wherever they

are shopping.

For the time being, most brands collect

information on who their customers are, where

they are, and how they behave. Yet the missing

piece of the consumer matrix is what they look

like – physical body profile data combined with

existing data sets. This rich data will unlock a

new dimension of valuable consumer insights

and revolutionize personalization as such.

The biggest barrier to buying apparel and

footwear online now is nothing else but the

same lack of actual and accurate consumer

data.

Consumers themselves want to have an

authentic conversation with the brands they

are buying from. They are ready for the data

exchange in return for better service with

transparency and respect towards their

privacy.

A recent study on personalization revealed

that 83% of consumers are willing to share their

data to enable a more personalized experience

as long as businesses are transparent about

how they are going to use it and that customers

have control over it. In other words, it all has to

be data that the consumer is willing and happy

to part with.

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Understanding your audience means

understanding and reacting to their preferences

and needs. With accurate physiometric data,

retailers and brands can give better fit, style,

and size guidance, thereby converting high

consumer confidence into purchases, reducing

costs, and freeing up capital.

Digital body profile data collection also allows

businesses to identify fit irregularities and

inconsistencies in their product design and

development processes bringing greater

intelligence to the entire manufacturing process

and distribution cycle.

And not only that. Insightful and timely data is

the most powerful tool to achieve operational

excellence and make intelligent decisions

quickly.

Consider analyzing your actual customers by

the comprehensive sum of various factors such

as age, gender, height, geographical location,

device and OS, full set of body measurements,

and 3D contour. This powerful combination of

data-driven insights create value simultaneously

across the full business ecosystem enabling

comprehensive and holistic approaches to

analytics.

Why are returns 30% higher in Chicago?

How should leggings be designed for urban

consumers?

What inventory should be at each distribution

center?

What should production runs look like for each

size?

Location based insights

Product & logistics insights

Marketing insights

What tops should I display to shoppers with this

body shape?

What marketing campaigns should I run for

millennial shoppers with this certain

combination of measurements and body

shape?

Forward-thinking retailers who aren’t afraid to

innovate and leverage consumer data to

personalize marketing campaigns, optimize

production, logistics and planning, shall win this

perennial race.

Data is your strongest strategic advantage, so put it to work.

About 3DLOOK3DLOOK is a computer vision, deep learning, and 3D focused

technology company located in San Mateo, CA. 3DLOOK’s

mission is to make data exchange between brands and retailers

simple and apply this intelligence to the product life cycle.

The physiometric data that 3DLOOK technology generates helps

brands and retailers create deeply personal and meaningful

relationships with their consumers.

Chief Strategic Officer Chief Marketing Officer

Whitney Cathcart

Director of Research & Strategy

Research & Strategy Design

Sergey Gylyuk

Marketing Manager UI/UX Designer

Helen Oliinyk Oleg Osenniy

Resources:

1. Chain Store Age, ‘Fitch Ratings names retailers at ‘significant risk of default’, 9 January 2019, <https://www.chainstoreage.com>.

2. Coresight Research, ‘US Store Closures 2019 Outlook: No Light at the End of the Tunnel’, 13 February 2019, <https://

coresight.com>.

3. CNN Business, ‘American retailers already announced 6,000 store closures this year. That's more than all of last year’, 16 April

2019, <https://amp.cnn.com>.

4. United Parcel Service of America, Infographics: ‘National Returns Day’, 19 December 2018, <https://pressroom.ups.com>.

5. Business Insider, ‘The future of artificial intelligence in retail’, 16 August 2018, <https://www.businessinsider.com>.

6. Capgemini Research Institute, ‘Building the Retail Superstar: How unleashing AI across functions offers a multi-billion dollar

opportunity’, 16 December 2018, <https://www.capgemini.com/>.

7. Retail TouchPoints, ‘Holiday Wrap-Up: Mobile Dominates E-Commerce, Driving 66% Of Traffic’, 28 January 2019, <https://

www.retailtouchpoints.com/>.

8. Retail Dive, ‘88pc of millennials to use mobile for holiday shopping: Google’, <https://www.retaildive.com>.

9. BRP Consulting, ‘Special Report: The Future Store’, 29 January 2019, <https://brpconsulting.com>.

10. Marketing Dive, 'Forecast: Retail will be largest AR/VR segment by 2020', 28 February 2017, <https://www.marketingdive.com>.

11. Accenture, ‘Making it personal. Why brands must move from communication to conversation for greater personalization. Pulse

Check report’, 2018, <https://www.accenture.com>.