I can’t find pants that fit right. I have a collection of pairs of jeans and slacks of varying lengths 30 through 34—I’m sure I’m growing more—simply because there’s a reality gap between the number on the label and actual fit. Somehow this simple fit issue is at the heart of online retailing and customer service and a big cost factor.
For the world of online retail, we stand in the year 10 A.Z. (anno Zapposi). Tony Hsieh’s company, Zappos, has practically redefined how online retailers handle returns of products. It wasn’t too long ago that companies considered the returns of products as ‘Not my cost’. ‘Satisfaction guaranteed’ was quickly followed by ‘+Shipping and Handling’.
Customers still had to pay to ship back shirts of the wrong size, or ill-fitting shoes. It was a key hurdle that kept many people from jumping online. Alleviating this pain became one of Zappos’ practical mantras to keep customer’s happy: Just order multiple sizes and return the others you that don’t fit; no cost to you, we’ll pay for the shipping.
For customers, that’s simply brilliant. I no longer have to worry about online purchases resulting in the wrong size. I no longer have to try to guess the fit, order the product, pay to ship back the wrong size, and then reorder. Rinse and repeat. I get them several sizes in one go and return the others.
Online retail purchasing surpassed $231 Billion in 2012. That’s just how brilliant. While that is due to much more than just this problem, it has increased consumer confidence in online shopping.
For the retailer or distributor, it’s not so great. According to Virtusize, the average return rate is 30% for clothing online. Free delivery or returns are named in the Five Trends driving Traditional Retail towards Extinction. The level of product returns escalated, as other retailers strove to adopt Zappos’ methods. It hits clothing retailers the most because the high degree of variability of real size and fit.
I met with Peder Stubert, co-founder of Swedish company Virtusize, at SXSW Interactive 2014 before his presentation for Fashion Decoded, an event about the intersection of fashion and technology. Virtusize offers a much simpler approach that they claim has reduced the size-and-fit related returns by 50% at some of their retailers. Beyond this, it also has the potential to redefine the logistics of online retail since affects both the customer-facing experience and the supply chain of retail operations.
Virtusize is a web widget that keeps track of your particular sizes and fit for different categories of clothing (dress shirts, T-shirts, jackets, slacks, skirts, blouses, coats, etc.) that can work across retailers that place it on their online stores. You begin by either identifying a piece of clothing that you already own from the retailer and its given size; or can measure yourself per the parameters by Virtusize.
While retailers still experiment with expensive body scanning technologies that require a customer to stand in place for up to a minute so the system can capture your dimensions and then make a recommendation. The novelty soon wears off when the store cannot find the recommended size for your fit. It also requires valuable retail floor space, service costs, and employee training.
Virtusize’s approach seems fairly simple, in comparison, but the combination of a larger selection across the Web, personalized and reusable data, customer history and other details change the game entirely. You could also use it to match your different choices of style and the materials used in the item. For example, you may want a light summer linen shirt to lie on you differently from a wool sweater.
You may also have different choices by your fashion moods. That translates into a style gallery per person, perhaps even an online wardrobe. Inversely, an item you see online could be described in terms of what you already own, so you have a better idea of how it fits. It goes beyond Amazon.com ’s idea of “People who bought this also bought…” by being closer to the personal experience of the customer rather than choices of other people. A better idea of how it fits individual tastes can improve chances of further purchases.
The primary and secondary impact of Virtusize is simple: more accurate fits leads to fewer returns and lower customer or retailer support calls. Fashion retailer ASOS’ Chief Executive Nick Robertson said a 1% fall in returns would immediately add 10 million pounds ($16 million) to the company’s bottom line.
Less volume also lowers necessary inventory, warehousing and delivery logistics costs. Beyond hitting the first goal of reducing product returns, making customers happy by improving accuracy to their fit and their tastes can improve the lifetime value of the customer.
What it takes to make this happen is data. Lots of it. Data across not just the retailer’s selections, but also the manufacturers, factory sources, and even data about the production runs of the factories. Virtusize partners with the fashion labels as part of their program to index this data to allow this level of detail about choices. Growing from their Scandinavian and European base, Virtusize is expanding globally including labels such as: Asos (global), Espirit (global), Nelly (Sweden), Monsoon (UK), dinos (Japan), E35Shop (Austria), and Zalora (SE Asia).
Major online retailers know that the capabilities of Big Data and personalization can be used in many ways to improve customer selection and lifetime value. Amazon, for example, has been monitoring customer selections for years to make further recommendations of what to buy. This adds a new wrinkle in detailed data on customer preferences for clothing.
Beyond the retailers, technologies like Virtusize create an interesting possibility of decreasing the volume of ship-to-customer deliveries by the major logistics firms, impacting their bottom line, particularly during heavy shopping season. A multiplying effect could impact the fuel and transportation industries as well.
With the challenge getting the right fit solved and reducing returns, the Chief Operating Officer or Customer officer can shift some focus with the lower costs towards other opportunities, and the customer service revolution can continue accelerating.
I have been an active explorer and advisor of collaboration and culture in online communities, a journalist, a gamer, a content marketer and a strategist. I am a senior …
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