Fashion industry, fourth largest sector in the global economy, must adapt to changing times. The industry is facing many challenges right now. It is a highly competitive market with thousands of brands and retailers. To improve business processes, increase sales and attract new customers online and off, it must be eco-friendly.
These issues have led the industry to turn to emerging technologies like AR and IoT in search of solutions. Many online shoppers have increased their purchasing power over the past decade. The COVID-19 pandemic has boosted online shopping. In 2021, 49% global consumers will shop online more than ever before the pandemic.
E-commerce represents a new direction in fashion business. Although online retail comes with its own problems, it can also provide a platform for tools that solves some of the most urgent issues facing the fashion industry.
Digital tools in ecommerce can offer new ways for consumers to communicate and persuade to shop online. There are also e-commerce options that can reduce production costs and provide more sustainability for the fashion industry in the future, as a result of the economic recession and environmental crisis.
AR is one of most in-demand emerging technologies. This is because it can help industry players solve many of these issues. This technology is a key to the future of fashion. It could make online shopping a more efficient channel for sales. Five strong points prove this.
#1: AR increases profitability
Digital try-on technology is one the biggest opportunities that ecommerce has from AR. It allows consumers to wear virtual clothes (e.g. Snap and ZERO10, Clo-Z), shoes, (e.g. Wanna Kiks, Kivisenses, Vyking), accessories, (e.g. Perfect or Hapticmedia), QReal) and makeup products (e.g. ModiFace. Virtool. Visage Technologies) in a similar way as they would in the real world.
This is vital because it allows people to determine if the product suits them before buying it. In 2019, 55% of consumers stated that trying on clothes was the main reason they shop in brick and mortar stores.
While it’s unlikely that consumers have changed their preferences, COVID-19 has forced them to shop online. Consumers are more comfortable shopping online, but they still like to try the clothes on. So, many consumers shop online for apparel and then return some or all of the garments after trying them on at home.
The global economic recession is also motivating people buy more thoughtfully. It’s much easier to resign from purchasing an item you aren’t sure about than it is to go through the return process.
AR try-on allows users to use their smartphone cameras and see how the digital item will look on them. Because of the existing technologies that can segment and track bodies and simulate different types, this experience can be very realistic.
It allows you to make better and more deliberate decisions. Consumers feel more confident about their purchases, which encourages them to make more. This results in sales increasing while returns decreasing. Returns are resource-intensive for retailers as they increase logistics costs and decrease profitability for each product that is declined.
#2: AR makes shopping sustainable
The fashion industry faces one of its biggest challenges today: sustainability. Fashion is the number one pollutant on Earth at the moment. An alarming 11.3 million tons of textile are thrown into the trash each year in the US.
Because clothing production contributes greatly to the environmental crisis, brands often produce more clothes than they can sell. This is especially true for mass-market fashion. The human race is also clearly purchasing too much clothing.
Many customers find it easier to dump excess items in a dumpster than to take them back.
AR try-on technology promotes thoughtful buying and helps to reduce textile waste. AR try-on technology not only encourages a decrease of returns but also reduces the CO2 emissions associated with logistics.
AR try-on might even help reduce the production cost of physical clothing. AR can not only be used to try on existing clothes but it can also be used to try on new concept pieces. On the request of a customer, AR may allow them to try on and see concept clothing in their physical form. It is hard to imagine what this could mean for the fashion industry.
This ensures that there won’t be an overproduction of undemanded products, which can lead to waste.
Sustainability is an investment in a better world. It can also help improve brand loyalty. McKinsey found that 63% European consumers consider sustainability promotion to be an important factor in their purchasing decisions.
#3: AR is the key for the Metaverse
The Metaverse is the topic most talked about when it comes down to the future of society. In 2021, 7,200% more people searched the internet for the term “metaverse”. While mass adoption of Metaverse is unlikely right now it will be a big trend in the future. AR offers brands and retailers the chance to explore the Metaverse’s possibilities and pave the way for the future in fashion.
Two big sales opportunities are offered by the Metaverse to brands: selling virtual clothes for avatars and creating stores within the virtual space that people can purchase physical clothing. While the first option sounds skewed, the possibilities are quite impressive.
It is estimated that internet users will spend $60-70 billion annually on virtual goods in video games by 2021. There are many people who are familiar with digital clothing, accessories, cosmetics, and other products. The second option will make e-commerce shopping more immersive. It will add enjoyment to what is usually a mechanical process.
Marketing can be enhanced by the Metaverse. It is a place where retailers and brands can interact with their customers and showcase their products. Metaverse allows sellers to create more tailored offers for their customers and better loyalty programs.
You can always wait until the Metaverse becomes popular and has a wide audience. The retailer or brand that decided to establish their presence in the Metaverse will then have to chase down those who did not. It is common knowledge, however, that being an early adopter can be much more rewarding than following the lead.
#4: AR can help you connect with Gen Z
Gen Z consumers are rising in power. Brands and retailers struggle to find the right ways to communicate with them. These young people are familiar with technology and ecommerce should speak the same language. They strive to make financial and environmentally responsible decisions, and view shopping as more than a transaction.
Gen Z buyers tend to research fashion items before making a purchase. Therefore, it is crucial that e-commerce provides them with as convincing data as possible. AR try-on helps them form an informed opinion. You can also engage with Gen Z online using new tools, such as social media and the Metaverse.
Young people view clothing as a way to express their creativity and self-expression on social media. A social platform post often requires a bold look that can be worn only once. It’s not very eco-friendly.
Gen Z is conscious of the environment and takes steps to reduce pollution. They are able to appreciate the benefits of digital apparel. They’ll also be inspired by the desire to save the environment and love the possibility of having physical clothes made upon request.
#5: AR helps to discover new talent
Being a fashion designer can be difficult financially. To create their first collection or items, new fashion designers often need to invest in their own capital. They must purchase fabrics, garment accessories, as well as other materials. A show that is impressive requires models and lots of resources.
AR allows emerging creatives to present their collections to buyers and consumers in a sustainable and profitable way. AR can also make it easier for young fashion designers to enter competitions without having to travel far or spend a lot of money. These contests might even reach the Metaverse.
This will make the fashion industry more democratic, and allow for more innovative fashion designers to become a part.
While selling clothes online is more affordable than buying them in a brick-and mortar store, it’s still a way for designers to reach new customers. Digital tools are also required. People are cautious around designers that are still unknown to them. Rewiring the minds of consumers takes a lot.
It may seem impossible to predict the future, as predictions cannot be made with 100% accuracy. There are always black Swans who wait to change the game and appear. AR can improve e-commerce. This isn’t a prediction. It’s already happening.
These are the brands and retailers that are most forward-thinking. They see it as a solution to their problems, and opening up new opportunities.