Can AR-Enabled Personalisation Improve Sustainability in the Fashion Industry?
Apparel and footwear account for a whopping 46% of returns, which - although a convenient option for consumers - is a growing trend that’s significantly impacting the environment. Could AR-enabled personalisation be the answer? Matthew Klimpke, CEO and Co-Founder of Vyking.io, discusses.
The returns industry is booming. They are happening faster, more frequently and, thanks to advancements in tech, are easier than ever for the consumer to complete.
A recent Narvar report discovered that 26% of shoppers surveyed had returned more than four items in the last six months, with apparel and footwear accounting for 46% of recent returns.
It also found that in 2021, the value of merchandise returned to retailers grew a massive 78% from the year before, with "fit and size" noted as the top reason for returns for the sixth year in a row.
Although providing a seamless returns experience offers retailers a chance to reconnect with customers and build trust and loyalty, the process is not only challenging retailers operationally and financially but is also affecting the sustainability of the industry.
Every time a product is shipped, it requires energy and resources to transport it. Returning a product means it’s shipped twice, increasing the carbon footprint and contributing to the overall environmental impact.
What’s more, when a product is returned, it must be processed, repackaged, and potentially restocked, which requires a significant amount of energy and resources. There are also cases whereby returned products cannot be resold, and so are disposed of, contributing to the growing problem of waste and environmental degradation.
Alongside these sustainability issues, returns that can’t be sold again or sold at full price also result in a loss of revenue for the retailer and can harm the overall economy.
In fact, the National Retail Federation’s yearly returns survey discovered that for every $1 billion in sales, the average retailer incurs $166 million in returns, while for every $100 in returned merchandise accepted, retailers lose $10.30 to return fraud.
So, what can be done to help reduce return rates?
The fact that fit and size continues to be cited as the foremost reason for returns - with both new and loyal customers - suggests that retailers could benefit from Augmented Reality (AR) and fit technology.
AR virtual try-on solutions are already beginning to change the game in the apparel and footwear industry. The traditional fashion shopping experience is often time-consuming and can be challenging for customers to visualise how a product will look on them.
AR, however, gives customers a more accurate representation of how an item will look on them, allowing them to experience clothing and accessories in an interactive and personalised way before making a purchase.
By making more informed purchases, there is not only the potential to improve sustainability in the fashion industry by reducing return rates, but it can also create a greater customer experience.
By providing an immersive shopping experience, as well as being able to see how a product will look on them in real time, customers can also share their virtual try-on experience with friends and family, making the shopping experience more social and engaging.
From a retailer perspective - with everyone’s budgets feeling the strain, it’s now more important than ever that marketing and ecommerce strategies work harder and smarter, and being able to help consumers better visualise products is a great way to differentiate in the ultra-competitive fashion industry.
We’ve already seen other markets use it successfully - furniture brands such as Ikea and Made.com utilise AR tech to approximate how their products might look in your home, Etsy has utilised it with art, Clarins with makeup, and we are also seeing companies including Under Armour deploy AR in B2B applications to optimise sales to distributors and retailers.
As the technology continues to evolve, and the production costs for 3D content reduces further, we can expect to see more and more fashion and footwear businesses follow suit. Cartier, for example, has already adopted in-store gadgets that render pieces of jewellery on your hands, while IWC Schaffhausen has tested AR try-on for watches.
In the footwear arena specifically - Vyking.io’s area of expertise - reports show virtual try-on tech is seeing the same success as other verticals.
Following in Vyking’s footsteps, Amazon and Snapchat have also recently introduced VTO for shoes, with Snap reporting up to a 94% increase in conversion for footwear campaigns on their platform.
Combining an increase in customer engagement and purchase conversion, as well as reducing return rates for a more sustainable retail environment, AR tech is the ideal investment for fashion and footwear brands looking to future-proof their business and improve their environmental credentials.