Navigating the Future of Fashion Retail
As the co-founder and CEO of 3DLOOK, I have had the privilege of working with some of the most innovative and forward-thinking fashion retailers in the industry. As we look ahead to 2023, there are several key trends and insights that I believe retailers must keep in mind in order to stay competitive and succeed in the ever-evolving retail landscape.
As the economy continues to face challenges in the coming year, retailers must find ways to stand out and differentiate themselves in order to attract and retain customers. This means investing in value-driven messaging, engaging shopping experiences, and exceptional customer service. The modern shopper wants more than just a transaction - they want to feel connected to the brands they purchase from and have a memorable shopping experience.
Adapting to Economic Changes: The Importance of Differentiation and Engagement
The high return rate in fashion e-commerce, which can be as high as 30-50%, can be mitigated by investing in technologies such as virtual dressing and size recommendation tools that address the root causes of returns.
(The end of) free returns: Investing in Technology Solutions
Embracing the Virtual Future: The Rise of Virtual Clothing and the Metaverse
Returns have long been a pain point for retailers, and the pandemic has only exacerbated the issue. Retailers are facing challenges, both new and longstanding. One of these challenges is the high return rate in fashion e-commerce, which can be as high as 30-50%. The pandemic has made this issue worse, as retailers relaxed their policies and extended return periods, leading to increased returns.
According to Shopify, it’s estimated that 30% of eCommerce returns happen because the size is too small. Another 22% happen because the customer ordered the item in a size that was too big. In response, retailers such as Zara and Boohoo have ended free returns in some regions, causing dissatisfaction among customers. However, the true cause of this anger is not the return fee but rather the lack of clarity in online shopping regarding size and fit, which is the primary reason for returns.
Brands are now looking for ways to reduce costs without punishing their customers. One solution is to invest in technologies such as virtual dressing and size recommendation tools that address the root causes of returns. 3DLOOK's YourFit solution, for instance, has helped some brands cut their size-related returns in half.
Virtual clothing, virtual fit & and the metaverse are not just trends for 2022, they are here to stay. The digital-savvy Gen Zs and their followers spend a significant amount of time on screens and are willing to spend real money on virtual clothing. Brands such as H&M are already tapping into this trend with their recent launch of the 'Looptopia' virtual world. As technology advances, retailers must be prepared to adapt and embrace the virtual future of fashion.
In conclusion, retailers must be prepared to adapt and evolve in order to navigate the challenges and opportunities of the coming year. By focusing on differentiation, engagement, technology solutions, and the virtual future, retailers can future-proof their brands and succeed in the ever-changing fashion landscape.
H&M Looptopia' virtual world
Vadim Rogovskiy is a serial tech entrepreneur and investor, co-founder and CEO of the industry-leading fashion tech startup 3DLOOK, partner at Geek Ventures.
His previous businesses include adtech startups Clickky, the 11th fastest growing AdTech company in Europe, according to INC5000, and AdCenter. The latter was acquired by VertaMedia in 2014, while Vadim partially exited Clickky in 2015.
Currently, Vadim serves as a co-founder and CEO of 3DLOOK, the industry-leading fashion tech startup founded in 2016. Under his leadership, the company has raised nearly $15M from global investors and received prestigious industry awards. These include the French American Chamber of Commerce Award in 2022, and Digiday Technology Award and the RTIH Innovation Award in 2021, as well as the LVMH Innovation Award and the IEEE Retail Digital Transformation Grand Challenge in 2019. 3DLOOK’s positive impact on the fashion industry has previously been recognized by organizations such as PCIAW, the Creative Retail Awards and the world’s leading analytical firms.
Vadim is also a partner at Geek Ventures, an early-stage VC firm supporting immigrant founders as they build world-changing solutions in the US market. The fund has already made 24 investments in pre-seed and seed stage startups since December 2021. Vadim is also the co-founder of GladPet, an online platform for homeless pets that encourages the adoption of abandoned animals over purchasing them from pet shops.
He offers support to the entrepreneurial community as a 500 Startups mentor, an advisor to early-stage companies, and through frequent contributions to publications such as Forbes, Entrepreneur and The Next Web. Vadim’s commitment to developing and supporting innovative solutions has seen him named as a Forbes ‘30 Under 30’ alumni and included into Retail TouchPoints’ ‘40 Under 40’.