Are virtual try-ons the future of retail?

The retail landscape is undoubtedly evolving alongside the ever-adapting consumer, and with it has come the inevitable technological developments that intersect with the interests and behaviours of younger generations. One of these components is that of virtual try-ons – also known as VTOs – which have not only started to take ownership of the e-commerce world, but have also slowly begun to progress into physical retail.

VTO specifically applies to forms of trying on clothing that takes place digitally, most often utilising a camera function on either a phone or tablet. This involves the integration of augmented reality (AR) technology, which allows customers to view garments in a digitally-generated overlay onto a real world image. There are already a number of governing platforms that have provided this service for years, namely Instagram and Snapchat, which have both established themselves as frontrunners in AR technology by offering a diverse range of filters and lenses. While they have already worked with brands and retailers on bringing VTO to a consumer’s home, there are some emerging tech firms that are surging forward in this area, bringing to the plate more dedicated VTO offerings that look to drive consumer engagement and purchasing.

One of these is Perfect Corp, a NYSE-listed company which provides both fashion and beauty retailers with AR try-on solutions for their e-commerce platforms. The idea for the company was initially shaped from the longing for an easier way to purchase cosmetics online, an issue that founder Alice Chang, now CEO, had encountered both as a purchaser 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, president and has worked alongside Chang for over seven years, giving the duo a strong overview of how the AR world has developed in the industry.

VTOs experienced a slow rise to prominence

Perfect Corp’s launch in 2015, however, didn’t emanate immediate returns. During this period, digitalisation was a new concept that was not yet considered a ‘must-have’ for businesses in the industry. “We consider the technology pretty disruptive,” Liu said in a conversation with FashionUnited. “We try to visualise and digitise. At the very beginning, when we approached a brand, they were often suspicious. They didn’t believe that you could present the true colour or true form of something. We have overcome lots of hurdles, such as creating products with adaptive lighting or that reflect the native skin tone. We continue to work with our partner to improve the technology, so all these challenges became opportunities. They differentiate us.”

Now, Perfect Corp has worked with over 500 brands on implementing virtual reality (VR) and AR products, all of which have reported a higher conversion rate following application. The company offers an expansive range of products, but its origins are planted in beauty, an industry for which it offers virtual makeup try-ons, foundation colour matching services and artificial intelligence (AI) skin analysis tools, products it has already integrated alongside Avon, Mac Cosmetics and Douglas. For brands that implement these features, Liu noted that there were various benefits that have presented themselves. Firstly, as mentioned, there is an average sales conversion rate increase of about 50 percent. Meanwhile, customer engagement is often reported to rise four times over, while basket size can increase at an average of 15 percent, sparked by shoppers spending more time on the website exploring the virtual options. Finally, the ability to try-before-you-buy can also lead to a reduction in returns.

Similar feedback could also be said for its activations in the fashion industry, a fairly new area for Perfect Corp, which only introduced VTO options for watches back in January 2022, and later added other jewellery products throughout the year. “In terms of sales conversions, due to Covid customers changed their shopping behaviour,” Liu noted. “Usually for jewellery they need to see it, but during the pandemic you couldn’t do so. Here, VTO was already a benefit, because you could try on from an e-commerce website, increasing confidence, sales conversion and time on the site.”

While AR may not yet be a household term, most young shoppers will already be familiar with the technology. Liu noted that the appeal behind this visualisation of products can largely be attributed to our visually-driven minds and a desire to engage with personalised shopping features – mostly present among Gen Z and Millennials. In terms of implementation, services can also vary depending on the brand, with products adjusted depending on requirements. Perfect Corp works together with a company’s own team, most often a technical and design team, to visualise the type of solution they need, modifying where necessary to appropriately present their brand moment.

Physical retail ushers in new world of digital try-ons

Zero10 is another spotlighting the use of AR try-on technology, albeit solely focused on the fashion and clothing industry. While the company’s launch was initially born out of the acceleration towards digitalisation during the pandemic, since co-founding it, Zero10’s CEO George Yashin has taken its capabilities beyond simply just VTO e-commerce solutions to bring the concept into more fields. This could be seen in the company’s launch of its AR Mirror, which it unveiled just four months ago. While still in an early stage, the mirror allows for consumers to view themselves in a product through an interactive screen that can be set up as a campaign poster, in a store window or as a VTO in stores.

Speaking to FashionUnited, Yashin said: “At its basic stage, the AR Mirror could be used as an interactive storefront to attract new customers and increase store footfall, or it could be integrated in-store to speed up a fitting process without using changing rooms. It allows customers to explore and engage with a brand on a deeper level through the digital try-on experience.” Next to these abilities, Yashin also noted the mirror’s capacity to provide brands with deeper data sets for their customers, helping to analyse their behaviours and therefore provide insights to drive conversion rates and influence marketing strategies. Yashin will now be setting his sights on developing the mirror to be a free-standing, pop-up product, giving it the possibility to appear at just about any location, with feedback from industry partners and consumers to aid in the development process.

Similarly, Perfect Corp is also pursuing physical retail. In fact, it was this sector that was actually where the company first set its roots, launching an in-store virtual trial assistant for beauty, allowing customers to try products on via a self-service device. The product, which is still being used, is particularly popular for quick check outs, most often required in travel retail, where limited shopping times dictate behaviours. However, with Covid, retailers instead looked to become more hybrid, as seen in the rise of in-store QR codes, and turned their investments to e-commerce. Now, for Perfect Corp, it is larger scale or luxury brands that are leading the VTO revolution, aggressively pursuing the sector in order to come out on top and give their high-demand customers a great experience.

It is a similar strategy to that of Zero10’s, which is also exploring its partnership options with high-end and luxury clothing brands, many of which have already implemented some form of in-house 3D design departments and have shown interest in further technology adoption. Yashin’s plan is to implement the AR Mirrors as a “holistic tech driven solution” with initial partners, before rolling out the concept to more niche brands as the product adapts and becomes more accessible. The pilot technology will first become available this spring among clients based in the US and EU markets, including Coach, which has joined as one of Zero10’s partners. Yashin added: “Based on our recent test projects, we can say that brands that integrate AR storefronts in retail will receive a significant increase in store foot traffic.”

Covid triggered a rise in hybrid retail experiences

The AR Mirror expanded on Zero10’s already wide reaching offering, which also includes an app and the AR Fashion Platform, a site where designers, brands and users can create, share and try on digital clothing. Next to this, the company also recently released the Zero10 Software Development Kit (SDK), which allows brands to integrate AR try-on experiences directly into their own shopping experience. While Yashin said that the company is only just planning its first integration of the kit, he noted that the purpose of such a product is already clear. He added: “We help to solve the problem of trying on clothes for online shopping and show customers how an item could look on them and fit, and how it could match their current wardrobe.”

Ultimately, Zero10 hopes that its tech solutions, each utilising its proprietary AR technology, can contribute to increasing customer engagement, improving customer experiences and attracting a younger, tech-savvy target base – namely Gen Z and Gen Alpha. “I think that digital fashion is the next must-have in the fashion industry, and it is well into its next phase of development,” Yashin said. “I can compare the current landscape to the beginning period of online retail. It’s something new, convenient, with huge potential and if you don’t have it or don’t use it, then in a perspective of three to five years you will be out of the current agenda. The industry already entered the digitalisation path and it can’t be stopped. The only way is to experiment and look for value for both brands and customers.”

Perfect Corp meanwhile is hoping to expand into skincare and hair, adding to its already expansive endeavours, and building on what Liu hopes will see it become the powerhouse of digital access. This also links into where he sees the industry going in the not-so-distant future, which he believes lies in the power of artificial intelligence: “VTO cannot stand without AI, it’s just the reality. With an AI component, a machine is more like a tool that tries to learn and understand your preference. It’s more like a consultant that can then recommend customers the best products. That’s why we are coming with a lot of new technologies that merge AR and AI, bringing ‘smart VTOs’ – a virtual beauty assistant. The future is definitely this hybrid combination.”

When asked if he had any advice for brands and retailers looking to enter the space, Liu said: “If you have never done this before, just like any other technology project, we recommend you start with something small. You have to have a proof of concept, so it must be controllable and measurable. Define your own KPIs and run a short proof of concept. If it fails it's still manageable, but if it works, which happens most of the time, then you will want to expand and develop a plan to quickly scale.”