Personalization 2 - 3DLOOK · Personalization 1.0 was pretty basic – birthday / event emails,...
Transcript of Personalization 2 - 3DLOOK · Personalization 1.0 was pretty basic – birthday / event emails,...
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
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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>.