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Reducing Return Rates - Perfecting Sizing Online

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Reducing Return Rates - Perfecting Sizing Online

Improving product return rates can have a big impact to a retailer’s bottom line. ASOS has previously quantified that a 1% drop in customer returns would translate into an additional $16million to the company’s bottom line.

So how do you improve return rates? Fundamentally, one of the biggest conversion hurdles and a predictor for apparel returns is product sizing and fit. There are significant cost impacts for retailers due to the labour, shipping and inventory expenses involved.

Fits.me, a London-based developer of sizing software, estimates that around 80 percent of all clothes bought instore pass through a fitting room, so it’s not surprising that online purchases made without a fitting room interaction need to be returned. The company (used by brands including Adidas, Hugo Boss and T.M. Lewin) interviewed German shoppers and identified that 35 percent aborted potential purchases because of concerns about fit.

Globally, businesses lose an estimated $8.4 billion each year because of incorrect sizing for online purchases, according to a retail research firm IHL Group.

Providing a better fit will see a big reduction in return rates, saving money for retailers and ultimately providing happier customers. Some improvement opportunities include:

  • Improved product photography - leading retailers provide product imagery of their products on model, as well as detailing the model’s height, weight and size worn, such as this example from ASOS. This level of detail allows customers to better approximate product fit. 
  • Body scanning - emerging technologies such as Bodymetrics and Styku that use sensors developed by Microsoft for its Kintect platform to create 3D avatars will help determine the correct size. A customer simply gets scanned instore and the software compares their measurements with the exact dimensions of garments to recommend the perfect fit. Bodymetric’s scanners are already in use in select Bloomingdales and Selfridge’s locations. 
  • Product comparison tools - True Fit provides software to retailers that predicts how other garments will fit based on brands and products that a customer already owns. Their tools have had good success by reducing the return rate for a premium denim retailer from 50% to 20% for 400,000 customers. See it in use at House Of Fraser.

Whilst not directly reducing return rates, providing instore returns presents a convenient option for customers and facilitates another opportunity for brands to interact by allowing  for complimentary or alternate products to be presented. One critical aspect is to ensure that the process is seamless from a customer perspective, particularly ensuring that stores aren’t disincentivised from facilitating customer returns.

Ultimately, allowing customers to better identify sizes and brand preferences will result in a better customer experience and bottom line.


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Digital Distruption For Retail Stores

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Digital Distruption For Retail Stores

Digital tools and communications continue to influence instore shopping experiences. Deloitte's latest report Navigating the New Digital Divide indicates that digital interactions influenced 40% of instore retail visits in Australia during 2014.

Whilst the level of influence may not be surprising for many retailers, it highlights how digital is rapidly changing the way customers shop and make purchase decisions. Digital and traditional channels are blending and complementing each other along the whole retail customer journey.

Australian shoppers have a similar level of digital influence to those in the US and Canada and are ahead of most European countries. Deloitte's survey ranked digitally influenced retail sales as follows - US (49%), Canada (41%), Australia (40%), Germany (30%), The Netherlands (30%) and the UK (27%).

Digital tools will continue to be crucial to the future of the store, not simply contributing to its demise as some have predicted. Of Australians that are digitally engaged, 65% use digital tools before heading into store or making a purchase decision, with an additional 31% using digital tools during their shopping trip. The top activities that Australian shoppers complete during their shopping trip are comparing products, accessing product information and checking product availability.

The trend is clear - customers are completing substantial research and have a desire to know significant product details before making their purchase decision. All of this research acts as a significant opportunity to drive customers to the store.

The upside for retailers is clear, customers using digital tools and devices before and during their shopping trip convert at a 25% higher rate and have a higher average order value than those that don't.

My key takeaways to succeed in the digital-physical fusion:

  • Measure digital engagement along all customer journey touchpoints – simply measuring online channel sales misses the bigger picture as digital has a significantly broader influence on retailers' success.
  • Incorporate digital into your instore experience - over thirty percent of customers use digital tools whilst instore to compare products, prices, reviews or participate in experiential activities. How can you leverage this interest to assist in their purchase and after sales experience?
  • Base your strategy on the buying habits within in your retail segment - the level of customer research, interactivity and expected after sales relationship will differ dramatically depending on your category or product.
  • Align organisational incentives - it's imperative that there is no conflict between stores and digital sales or servicing channels. Be guided by how your customers choose to interact with your brand.

Fundamentally, retailers must understand their customers’ path to purchase (across time, devices, channels and technologies) to build a series of digital touch points to meet their needs along the way.

View a summary of findings from Deloitte's research below, or read the full research here.


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Virtual Reality = Immersive Experiences

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Virtual Reality = Immersive Experiences

Virtual Reality is finally delivering on its promise of enabling immersive customer experiences and provides an opportunity for customers to engage with a product, service or place without  physically being there. With the advent of Google cardboard, and upcoming releases from Oculus Rift and HTC Vive, there will also be significantly more consumer interest in the area over the coming months.

Virtual and augmented reality will require a rethink of online storytelling techniques. Many notable brands are now introducing these elements in flagship stores where the experience can be predominantly about storytelling and less about commerce. Here are some recent practical applications of virtual reality for brands:


Oakley


In an experiential brand activation, Oakley has built a sunglasses case that lets you see through the eyes of a pro athlete. After purchasing the sunglasses, customers can reuse the box by turning it into a Google cardboard VR device to see Oakley athletes showcasing extreme sports. The campaign allows customers to watch from the wave, the mountain, the dirt, from mid-air or the sky as athletes compete in extreme events.


Savannah College of Art & Design (SCAD)


SCAD is providing thousands of potential students the opportunity to take virtual tours of its campuses in Savannah, Atlanta, Hong Kong and France. SCAD distributed 10,000 pairs of the  specially designed cardboard goggles to potential and current students. Eventually the tools are planned to be used to facilitate participation in virtual events at remote campuses.


Ted Baker


Ted Baker’s recently refurbished Regent Street store was the scene for a virtual reality treasure hunt to celebrate the store opening. The experience allowed customers to virtually dash around some of London’s most iconic locations.
 


Content Creation


As usual, it’s not just about the technology, the right creative content approach is required. Virtual reality content creation once required significant custom hardware and software. This is no longer the case with Google recently demonstrating the Jump camera rig (see below) which comprises 16 GoPro cameras in a circular array. The size and arrangement of the cameras is designed to work with the corresponding Jump software to transform 16 separate pieces of video into stereoscopic virtual reality video. The final videos are super high resolution - equivalent to five 4K TVs and shortly YouTube will provide the perfect distribution medium for Jump videos, allowing immersive VR content to be streamed directly to smartphones.  


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Netshoes Tiny Pop-Up Store

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Netshoes Tiny Pop-Up Store

Netshoes, a Brazilian eCommerce sporting goods company has recently launched its first physical store. That 'store' was so tiny that is was squeezed in between two other shopfronts on one of the most popular shopping streets in São Paulo. The pop-up store essentially made over 40,000 products available in a space slightly larger than an iPad. It also exposed the brand to over 35,000 daily passers-by.

The campaign execution is pretty simple and a good PR opportunity for an online only brand. This is further evidence of pureplay retailers continuing to test new retail formats

What other dormant space exists in city centres, malls or airports that could be transformed for your brand?
 


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Interactive Store Hoarding

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Interactive Store Hoarding

New York fashion label Kate Spade has created a personalised shopping experience by embedding touchscreens within a construction hoarding at an upcoming store in New Jersey.

The resulting experience merges online and offline worlds, enabling customers to engage with products in new ways and helps Kate Spade maximise exposure and potential sales.

Shoppers interact through touch screens, responding to typically whimsical Kate Spade questions such as – “Sparkle: a little or a lot?” and “Dream dinner party: pizza on fine china or desert served first?” – before being given personalised product recommendations and the option to purchase digitally with complimentary shipping.

As well as making the most of previously wasted retail space whilst store renovations are underway, the brand is also able to capture data on relevant local customers for subsequent instore events and promotions once the store opens.

See the interactive store hoarding in action below:



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