The retail landscape is changing because consumers are always changing, and with that change has come inevitable technological changes that fit with the interests and habits of younger people. One of these parts is virtual try-ons, which are also known as VTOs. VTOs have started to take over e-commerce and are slowly making their way into physical retail.
VTO refers specifically to digital ways of trying on clothes, which usually involve using the camera on a phone or tablet. This is done by adding augmented reality (AR) technology, which lets customers see clothes as a digital overlay on a picture of the real world. There are already a few platforms that have been doing this for years, like Instagram and Snapchat, which have become leaders in augmented reality technology by giving users a wide range of filters and lenses to use. Even though they have already worked with brands and retailers to bring VTO to consumers’ homes, some new tech companies are moving quickly in this area, bringing more dedicated VTO offerings that aim to get consumers to engage with and buy from them.
One of these is Perfect Corp, a company listed on the New York Stock Exchange that helps fashion and beauty retailers with their e-commerce platforms by giving them AR try-on solutions. The idea for the company came from founder Alice Chang’s desire for an easier way to buy cosmetics online. Chang, who is now the CEO of the company, had run into this problem both as a buyer of cosmetics and as the CEO of software company CyberLink. Here, she met Wayne Liu, who is now the chief growth officer and president of Perfect Corp. He has worked with Chang for more than seven years, giving the two of them a good idea of how the AR industry has changed.
VTOs gained popularity slowly, but Perfect Corp’s launch in 2015 didn’t bring in profits right away. During this time, digitalisation was a new idea that was not yet seen as a “must-have” for businesses in the industry. In a talk with FashionUnited, Liu said, “We think the technology is pretty disruptive.” “We try to make things clear and digital. At first, when we approached a brand, they were often sceptical. They didn’t think it was possible to show the real colour or shape of something. We’ve gotten past a lot of problems, like making products that can change their lighting or match the skin tone. We keep working with our partner to make the technology better, so all of these problems turned out to be chances. They make us different.”
Now, Perfect Corp has helped more than 500 brands use virtual reality (VR) and augmented reality (AR) products, and all of them have seen a higher conversion rate after doing so. The company has a wide range of products, but its roots are in the beauty industry. It works with Avon, Mac Cosmetics, and Douglas to offer virtual makeup try-ons, foundation colour matching services, and artificial intelligence (AI) skin analysis tools in the beauty industry.
Liu pointed out that there have been a number of benefits for brands that use these features. First, as was already said, the average sales conversion rate goes up by about 50%. The average size of a customer’s basket can go up by 15% if they spend more time on the website looking at the virtual options. This is because customers are more engaged when they spend more time on the site. Lastly, the ability to try something out before buying it can also lead to fewer returns.
Similar comments could be made about its activations in the fashion industry. This is a relatively new area for Perfect Corp, which only started offering VTO options for watches in January 2022 and then added other jewellery products throughout the year. “In terms of sales conversions, customers changed the way they shopped because of Covid,” Liu said. “Usually, they need to see jewellery before they buy it, but you couldn’t do that during the pandemic. Here, VTO was already a benefit because you could try on clothes on an e-commerce website, which increased confidence, sales, and time spent on the site.
AR may not be a word that most people have heard of yet, but most young shoppers are already familiar with the technology. Liu said that this way of showing how products look is appealing because our minds are mostly visual and we want to use personalised shopping features. This is especially true for Gen Z and Millennials. Services can also be different depending on the brand, and products can be changed to meet different needs. Perfect Corp works with a company’s team, which is usually made up of technical and design experts, to visualise the type of solution they need, making changes as needed to make their brand moment shine.
Digital try-ons are a new thing in the world of physical retail
Zero10 is another company that focuses on the use of AR try-on technology, but only in the fashion and clothing business. Even though the company was started because of the rush towards digitalization during the pandemic, its CEO, George Yashin, has expanded its capabilities beyond just VTO e-commerce solutions to bring the idea to more fields. This is clear from the fact that the company just released its AR Mirror four months ago. Even though the mirror is still in its early stages, it lets people see themselves in a product on an interactive screen that can be set up as a campaign poster, in a store window, or as a VTO in stores.
Yashin told FashionUnited, “At its most basic, the AR Mirror could be used as an interactive storefront to bring in new customers and get more people into the store, or it could be built into the store to speed up the fitting process without the need for changing rooms.” The digital try-on experience lets customers learn more about a brand and get more involved with it.
Yashin also said that the mirror could give brands deeper data sets about their customers, which would help them analyse their behaviour and gain insights that could increase conversion rates and change marketing strategies. Yashin will now work on making the mirror a free-standing, pop-up product that can show up just about anywhere. He will use feedback from industry partners and customers to help him develop the product.
Perfect Corp is also trying to sell things in stores. In fact, this is where the company got its start, with the launch of an in-store virtual trial assistant for beauty products that let customers try things on themselves with a self-service device. The product is still used, and it is especially popular for quick checkouts, which are most often needed in travel retail, where shoppers have limited time to shop.
But with Covid, retailers turned their attention to e-commerce and tried to become more hybrid, as shown by the rise of QR codes in stores. Now, for Perfect Corp, it’s the big or luxury brands that are leading the VTO revolution. They are aggressively going after the sector to come out on top and give their customers with high expectations a great experience.
It’s a similar strategy to that of Zero10, which is also looking into ways to work with high-end and luxury clothing brands. Many of these brands already have 3D design departments and are interested in using the technology more. Yashin wants to use AR Mirrors as a “holistic tech-driven solution” with his first partners, then expand the idea to more niche brands as the product improves and becomes more widely available. The pilot technology will first be made available to clients in the US and EU this spring. One of Zero10’s partners, Coach, is one of these clients. Yashin added, “Based on our recent test projects, we can say that brands that add AR storefronts to retail will see a big increase in foot traffic.”
COVID led to more hybrid shopping experiences
Zero10 already had a lot to offer, like an app and the AR Fashion Platform, a website where designers, brands, and users can make, share, and try on digital clothing. The AR Mirror added to this. The company also just recently released the Zero10 Software Development Kit (SDK), which lets brands add AR try-on experiences right into their own shopping experiences. Yashin said that the company is still figuring out how to use the kit for the first time, but that it is clear what the point of such a product is. He also said, “We help solve the problem of trying on clothes when shopping online by showing customers how an item might look and fit on them and how it might go with what they already own.”
Zero10 hopes that its tech solutions, which all use its own AR technology, will help increase customer engagement, improve customer experiences, and attract Gen Z and Gen Alpha, which are younger and more tech-savvy. Yashin said, “I think digital fashion is the next big thing in the fashion industry, and it’s already well into the next stage of its development.” “I can compare the situation now to when online shopping first started. It’s something new, easy to use, and with a lot of potential. If you don’t have it or don’t use it, you will be out of the loop in three to five years. Digitalization has already started in the industry, and it can’t be stopped. The only way is to try different things and look for solutions that are good for both brands and customers.”
Perfect Corp, on the other hand, wants to add skincare and hair to its already wide range of services. Liu hopes that this will help Perfect Corp become the powerhouse of digital access. This is also related to where he thinks the industry will go in the not-too-distant future, which he thinks will be thanks to the power of AI: “It’s a fact that VTO can’t work without AI. With AI, a machine is more like a tool that tries to learn from you and figure out what you like. It’s more like a consultant who can then suggest the best products to customers. So, we’re bringing a lot of new technologies that combine augmented reality and artificial intelligence, like “smart VTOs,” which are like a virtual beauty assistant. This hybrid mix is definitely the way of the future.”
When asked if he had any advice for brands and retailers that wanted to get into the space, Liu said, “Just like any other technology project, if you’ve never done this before, we recommend you start with something small.” You need a proof of concept, so it has to be something you can control and measure. Set your own KPIs and do a quick proof of concept. If it doesn’t work, it’s still doable, but if it does work, which is most of the time, you’ll want to grow and make a plan to scale quickly.
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