The retail landscape is undoubtedly evolving with the ever-changing demands of people. This also includes technological developments that go hand in hand with the interests and behavior of younger generations. One such development is the virtual try-on – also known as ‘VTO’, for ‘Virtual Try-On’ – which has not only taken over the world of e-commerce but is also slowly making its way into physical retail.
VTO specifically refers to trying on clothes on screen, most often using a camera feature on a phone or tablet. Augmented Reality (AR) technology enables customers to view items of clothing in a digitally generated overlay on a real video of themselves. There are already numerous platforms that offer this service, including Instagram and Snapchat, both of which have established themselves as pioneers in AR technology. Their wide range of filters, for example for cosmetics or accessories, is nothing more than a kind of VTO.
Both platforms have already worked with brands and retailers to bring VTO to people’s homes. Some technology companies that are making inroads in this space and launching more specialized VTO offerings are said to encourage interaction and sales with these tools.
One such company is Perfect Corp, a New York Stock Exchange-listed company that provides both fashion and beauty retailers with augmented reality try-ons. The idea for the company originally came from the desire to easily buy cosmetics online. Founder Alice Chang, now CEO, encountered this problem both as a consumer of these products and in her previous role as CEO of software company CyberLink. It was here that she met Wayne Liu, who is now Perfect Corp’s Chief Growth Officer and President. He has worked alongside Chang for over seven years.
VTOs experienced a slow rise
Perfect Corp’s launch in 2015 brought no immediate returns. At that time, digitization was a brand new concept that was not yet considered a ‘must have’ in the industry. “We think the technology is pretty disruptive,” Liu told FashionUnited. “We try to visualize and digitize. When we first approached brands, they were often suspicious. They didn’t believe that the color or shape of their products could be faithfully represented. We have overcome many hurdles, such as developing products with adaptive lighting or mapping a natural skin tone. We continue to work with our partner to improve the technology so that all these challenges become opportunities. That is what sets us apart.”
Now, Perfect Corp has worked with over 500 brands to implement Virtual Reality (VR) and AR products, all of which are said to have reported higher conversion rates after using the technology. The company today offers a wide range of products, but its origins are in the cosmetics sector. For these, it provides virtual makeup try-outs, foundation color matching services and artificial intelligence (AI) skin analysis tools and is already working with Avon, Mac Cosmetics and Douglas. According to Liu, there are several benefits for brands using these features. First, there is an average conversion rate increase of about 50 percent. At the same time, customer loyalty is said to increase fourfold, while the size of the shopping cart increases by an average of 15 percent. Customers spend more time on the website exploring the virtual options. Last but not least, being able to try goods before buying can also lead to a reduction in returns.
Similar feedback was also seen for events in the fashion industry, a relatively new area for Perfect Corp, which only introduced VTO options for watches in January 2022 and added more jewelry products throughout the year. “In terms of sales figures, consumers have changed their shopping behavior due to the pandemic,” Liu said. “Usually they wanted to see jewelry in real life, but during the pandemic that wasn’t possible. VTO was an advantage here because you could try things on online, which increased trust, sales and time spent on the websites.”
While AR hasn’t caught on everywhere yet, most young people are already familiar with the technology. Liu noted that the appeal of this product visualization is largely due to their visually-focused viewing habits and desire for personalized shopping features. These are particularly pronounced among Generation Z and Millennials.
In terms of implementation, the services can also vary by brand, with the products offered by Perfect Corp being customized as needed. The company usually works with a company’s engineering and design team to visualize the solution they need.
Physical retail heralds new world of digital try-on
Zero10 is also a company that has the use of AR fitting technology at its core, but only in the fashion and apparel industry. George Yashin, CEO of Zero10, has expanded his capabilities beyond just VTO e-commerce solutions to expand the concept to other areas since the company’s inception. An example of this is an AR mirror that the company introduced just four months ago. The mirror, which is still in development, will allow people to see themselves in a product on an interactive screen that can be placed as a campaign poster, in a shop window or as a VTO in stores.
“As a first step, the AR mirror could be used as an interactive storefront to attract new customers and increase footfall, or it could be integrated into the store to allow fittings without using fitting rooms. Digital try-on allows customers to explore and engage with a brand on a deeper level.” Alongside these possibilities, Yashin also pointed to Spiegel’s ability to provide brands with datasets about their customers to analyze their behavior to gain insights that could increase conversion rates and influence marketing strategies. Yashin now wants to develop the mirror into a free-standing pop-up product that can be placed almost anywhere. The feedback from industrial partners and consumers should flow into the development process.
Perfect Corp also relies on physical retail. In fact, it was in this industry that the company first took root. Its virtual test assistant for the cosmetics industry was introduced there. The product, which is still used today, is particularly popular in travel retail, for example at airports, where short shopping times are decisive for purchases. During the pandemic, retail companies had increasingly shifted to integrating hybrid solutions into their stores, such as QR codes, or focused on investing in e-commerce.
For Perfect Corp, it is primarily larger brands, or brands in the luxury industry, that are leading the VTO revolution and are aggressively entering the space to secure leadership and offer a new experience to their customers.
Zero10 is also pursuing a similar strategy. The company is also focused on partnering with high end and luxury apparel brands, many of which already have some form of in-house 3D design departments and have shown interest in adopting the technology. Yashin’s plan is to implement the AR mirrors as a “holistic, technology-driven solution” with the first partners before expanding the concept to other niche brands. The pilot technology will initially be available to US and EU customers, including Coach, in March this year. The US bag and fashion label is one of Zero10’s first partners. Yashin added, “Based on our recent testing projects, we can confirm that brands that integrate AR storefronts into their retail stores are seeing a significant increase in traffic to their stores.”
The pandemic has sparked a surge in hybrid retail experiences
The AR Mirror extends Zero10’s already extensive offering, which also includes an app and AR Fashion Platform, a website where designers, brands and users can design, share and try on digital clothing. Additionally, the company recently released the Zero10 Software Development Kit (SDK), which allows brands to integrate AR fittings directly into their offering.
According to Yashin, the company is planning its first integration of the kit, but he noted that the purpose of the product is already clear. “We help solve the problem of trying on clothes when shopping online, showing customers how a garment would look on them and how it might fit into their current wardrobe.”
Ultimately, Zero10 hopes to help increase engagement, enhance the shopping experience and attract a younger, more tech-savvy audience – namely Gen Z and Gen Alpha – through its tech solutions, each utilizing proprietary AR technology. “I believe that digital fashion will be the next must-have in the fashion industry and is in the next phase of its development,” Yashin said. “I would like the current status [dieser Technologie] compared to the early stages of online trading. It’s something new, with huge potential, and if you don’t have it or don’t use it, you’ll be gone in three to five years. The industry has embarked on the path of digitization and can no longer reverse it. The only way is to experiment and look for value for the brands and the customers.”
Perfect Corp, meanwhile, hopes to expand into skincare and haircare, building on what Liu believes will become the driver of digital transformation. For him, this also has to do with how the industry will develop in the not too distant future. He firmly believes that the power of artificial intelligence is still underestimated: “VTO cannot do without AI, that’s just the reality. With an AI component, a machine becomes a tool that tries to learn and understand preferences. It becomes an advisory tool that can recommend the best products to customers. That’s why we offer many new technologies that combine AR and AI and intelligent VTOs that can also deliver virtual beauty advice. The future definitely lies in this hybrid combination.”
His advice to brands and retailers: “If you’ve never done this before, like any other technology project, we recommend starting small. You must provide a proof of concept that is controllable and measurable. Define your own KPIs and conduct a short proof of concept. If it fails, it’s still manageable, but if it works, which it mostly does, then you’re going to want to expand and come up with a plan to scale up quickly.”
This article was published on FashionUnited.uk. Translation and editing: Barbara Russ