Retail TrendsINSIGHTS ON THE DIGITAL SOLUTIONS FOR RETAIL

IN COLLABORATION WITH INTESA SANPAOLO INNOVATION CENTER

INDEX

1. Five major global trends in fashion

• Sustainability

• See now – buy now strategies

• The end of the designers’ era

• Omni-channel marketing

• Wearable

2. Mobile E-Commerce Trends

3. Omni-channel Strategies

4. Strategies to Engage Customers

3. Virtual Fitting Rooms

4. Brand Certification Systems

technologies

Five Major

Global Trends in

Fashion

1. SUSTAINABILITY

2. SEE NOW – BUY NOW STRATEGIES

3. THE END OF THE DESIGNERS’ ERA

4. OMNI-CHANNEL MARKETING

5. WEARABLE TECHNOLOGIES

1. Sustainability 1/2

All over the world, the sustainable practices are introduced into every

step of the fashion production cycle, be it design, sourcing, production, or

retail.

In sourcing, the manufacturers are looking to increase the traceability of

the raw materials, as well as to use the recycled or organic fibers.

We observe global associations of raw materials manufactures, such as

Cotton Leads, to commit to use the latest technology to produce sustainable

fibre, fully traceable from farm to finished garment.

A number of technologies are being developed to create eco-friendly

fabrics from unconventional materials such as milk, tea, or coffee beans. New

textiles are also created from recycled materials, ranging from fabric itself, to

plastic bags or bottles.

Designers and brands are increasingly applying innovative

manufacturing, dyeing, printing and washing processes to reduce water and

energy usage.

Introduction of innovative dyeing technologies that allow to transfer the

dyes to fabric in a one-step process, results in saving up to 75 gallons of water

and up to 85 percent energy in the dyeing of a pound of fabric, and produces

no harmful by-products.

66% of global respondents are willing to pay more

for sustainable goods

*2015 Nielsen Global Corporate Sustainability Report.

1. Sustainability 2/2

Digital printing, a technology used by a number of prominent

designers, reduces water usage by 95 percent, energy usage of 75

percent, and minimizes textile waste.

3D printing made its way to the fashion world, not only in a form of

pieces of clothing printed with plastic materials, but also as a technology

that allows to print fabric itself.

In online retail, the new digital technologies are able to match

products with customers based on their personal measurements and

preferences. This allows to drastically reduce the rate of returns and hence

the energy used for shipping, and waste.

In order to encourage the brands to apply sustainable practices,

new standards and certificates are introduced. In 2014, Cradle to Cradle

Products Innovation Institute launched Fashion Positive, a certification

program for sustainable fashion brands that will allow them to improve their

visibility on the global arena.

Market data:

Wohlers Report for 2014 forcasted the

worldwide 3D printing industry to grow from

$3.07 billion in revenue in 2013 to $12.8 billion by

2018, and exceed $21 billion in worldwide

revenue by 2020. In 2015, the industry surpassed

$5.1 billion.

Since 2011, more than USD 80 mln was

raised in funding for the startups providing

better fitting solutions for the online platforms.

2. See Now – Buy Now 1/2

For the past several years, designers and retailers have not been

satisfied with the fact that there is a 6 months gap between putting the

designs on the catwalk during the fashion shows and in the shops. The luxury

brands are experiencing fierce competition from the retailers, who are

updating their collections regularly, and have to find ways to bridge this

delay.

The initiative was taken by Burberry who announced that it would skip

the gap and that the new collection was already available in the stores. This

move has been supported by Tom Ford, who announced the “see now-buy

immediately” strategy, Rebecca Minkoff, and, on a lesser scale, by Prada,

Diane von Furstenberg and Monique Lhuillier who are selling a select few

items from the collections just exhibited.

2. See Now – Buy Now 2/2

One of the reasons cited by the brands is that in the era of social media,

where the shows are live-streamed, and the pictures of the new collections are

immediately uploaded to Instagram, delaying the sales for half a year creates

confusion and misunderstanding with the customers, who cannot be expected

to tie-in with the traditional calendar. So the brands are now putting the focus

of the shows primarily on consumers instead of editors, buyers, or stylists.

Another reason for changing the calendar is that the brands have global

presence and their customers live in different climates. Customers’ demand

has to be satisfied in time, because modern customer does not shop early

anymore, but buys now to wear now.

This trend is backed by the Council of Fashion Designers of America, who

announced that it would work with Boston Consulting Group to re-evaluate the

traditional twice-yearly format of New York Fashion Week, which takes place in

February and September, in order to create an in-depth analysis and road

map for the future of Fashion Week.

This is one of the newest trends on the fashion horizon, clearly reflecting

the strong influence of the social media and customer focus, and it is likely to

continue growing.

3. The End of the Designer’s Era

One of the latest trends on the fashion scene, demonstrating, yet again, the influence of

the social media, is the exit of signature designers from fashion houses. It marks the threshold of a

new era, where the artistic directors are not designers any more, but people whose core

competence is the ability to craft and communicate a strong point-of-view across a number of

channels, encompassing everything from public appearances to the social media.

In the course of just several months we’ve observed Alexander Wang exit Balenciaga,

Alber Elbaz pushed out of Lanvin, and Raf Simons leave Dior.

Unlike in earlier instances where the designers became celebrities thanks to their

overhauling a famous brand (case in point Tom Ford in Gucci), the tendency now is to hire

celebrities who bring along a huge number of followers, although lacking experience in more

traditional areas like design.

An example of such shift may be the recent appointment by Brioni of Justin O’Shea, a

former fashion director (buyer) for the luxury website MyTheresa.com, with no designer training,

to the position of its Creative Director. O’Shea’s appointment was announced on new Brioni

Instagram account.Since relevance is one of the most sought for features by the brands (which also is

reflected in “see now-buy now” trend), O’Shea’s prominent street-style presence and a vast

amount of publicity - 80,000 Instagram followers, along with his retail experience, are deemed to

be a reason for his appointment to a conservative traditional men’s wear brand.

#Brioni is pleased to announce the appointment of Justin

O’Shea as new Creative Director. ‘I am deeply honored to

undertake this new challenge for such prestigious and

celebrated menswear house. It is with great excitement I am

looking forward to write a new chapter in the story of Brioni.’

@justinoshea

4. Omni-Channel Marketing 1/2

Retailers continue to realize that they need to connect with users on

multiple channels and touch points simultaneously or even

interchangeably, and will give customers the ability to interact and

complete transactions on their own terms. When a customer wants to view

an item online, purchase it using their phone, and return it by dropping by

the store, he or she will be able to do so in a smooth and seamless way.

Social media continues to heavily influence product decisions, and,

serving as a shopping platform, it grows as a part of the omnichannel mix.

Over the last several years, brands have used social media to market their

products, talk to customers, and even make merchandising decisions; but

in the near future merchants will be adding “selling” to the list of things they

can do on social sites, as has been already done by Facebook, Pinterest,

and Twitter.

Influence of social media on online shopping behaviour

Base: 22,618

PWC Total Retail Survey 2016

4. Omni-Channel Marketing 2/2

Retailers are adopting and experimenting withtech innovations in order to figure out how they canuse them to improve the shopping experience.Technology is being integrated in brick-and-mortarstores. We currently observe the increased use ofPOS, beacons, augmented reality (from digital fittingrooms to interactive windows displays), wearables,and 3D printing.

Use of technology allows the retailers to providemore personalized shopping experience to thecustomers. In order to enhance it even more, retailersare investing in the Big Data solutions. Businesseshave realized that in order to predict shopper’sbehavior and provide truly personalized experiences,they would need to gather as much informationabout the behavior, history, and whereabouts ofconsumers. Big Data enables retailers to implementdynamic pricing, personalized recommendations,shopper-specific discounts, and more. Use of mobile/smartphones whilst in-store.

Base: 22,618

PWC Total Retail Survey 2016

4. Wearable Technologies 1/3

The lines between fashion and technology have been blurring for

some time, starting from 2012 when Diane Con Furstenberg sent her models

down the runway wearing Google Glass addition to their wrap dresses.

Although the project did not take off, this event predicted the entrance of

the gadgets into the world of fashion. This entrance hasn’t been smooth and

easy. In her NYT article “Why I’m breaking up with my Apple Watch” in June

2015, writer Vanessa Friedman stated: “No matter how attractive the Apple

Watch is in the context of other smartwatches or smart bands, no matter

how much of an aesthetic advance its rounded corners and rectangular

display, it still looks like a gadget."

This consumers’ need found a lively response from the technology

companies, and gave a rise to one of the two current major tendencies

clearly observed in the field of wearable tech: wearable gadgets take shape

of designer pieces through massive and intensive collaboration of the tech

producers with designer/fashion houses. What we observe is usually a

marriage of an existing hardware, such as health and well being tracking

devices or devices with specific functions (i.e., social media or safety) with a

designer piece of jewellery.

*statista.com

Another prominent, and, possibly, more promising trend is the intensive

research and development of new smart fabrics. Recent advances in

technology have brought together the apparel, technology, and textile

industries to develop new capabilities in fabrics with the potential to change

how the consumers interact with their clothes and other textile products. We

observe different methods of creating such fabrics, that can range from using

chemistry to using computer tech, and different functionalities - from fabrics

that react to the changes in environment to the fabrics created for pure

entertainment.

Global startup scene in wearable technology reflects these two trends,

with new companies all over the world introducing innovative ideas both in the

fields of combining technological devices with fashion products and creating

textile materials of the future.

Market data:

According to Gartner, the largest and

fastest growing category of the wearable tech

market is expected to be smart garments,

which are predicted to grow from 100,000 units

shipped in 2014 to 26 million units shipped in

2016.

4. Wearable Technologies 2/3

4. Wearable Technologies 3/3

Italian Wearable Technology Scene

Distribution of wearable tech companies

across the industries in Italy**

As of beginning of 2016 there were 5.150 innovative startups registered in Italy.*

20% of these companies are located in Piedmont, followed by Sardinia on the second place with

15%. Lombardy, Tuscany, Sicily, Lazio, Friuli Venezia Giulia follow with 10% each.**

Most of these companies are well established, 48% are long time active S.R.Ls, where startups

come close second with 36%.

The reason for such distirbution is thought to be high entry barriers, in terms of heavy investments

needed and lack of competent cross-industrial specialists.

There are, however, single instances of fashion tech projects in Italy, both startups and industry

leaders.

Circle Garage, a startup from Genoa, presented its smart watch HIRIS last year in Consumer

electronic Show in Las Vegas.

Colmar, an apparel production copany has partnered with Directa Plus to create World’s First

Graphene-Enhanced Sportswear.

* aster.it

**wearable.to, wired.it

Mobile E-Commerce Trends

Mobile E-Commerce

Online shopping is mainly composed of three activities – browsing, researching and

purchasing. Two-thirds of all time spent shopping online now happens on phones and

tablet. Mobile gives us the ability to quickly connect to products or services as we

encounter them and choose appropriate purchase options, capitalizing on our purchase

intent. Mobile is not only being successfully utilized in the arenas that serve as simulation

before the final purchase – to send push notifications, geo-fencing, personalisation but

also serves as a growing commerce platform. However, more needs to be done to

improve the proportion of conversions from the mobile device, and that’s why both the

back and front end service providers are investing courageously in this segment.

According to the studies by MasterCard, by 2020 mobile will become the most important

channel – overtaking stores, PCs, call centres and direct mail. Today, already one third

of the retailers are using mobile phones as an important communication tool with

customers. Mobile commerce is predicted to become king: whether

it is by the use of near-field communications technology or by contactless payment

technologies.

pulse.custora.com

This February 2016, the share of mobile orders (phone+tablet) out

of all e-commerce orders Worldwide, has increased 31% up from

27% in 2015

Mobile Shopping Apps

Mobile usage is continuously growing. Today the majority of digital information is

consumed via mobile devices (smartphones and tablets). Together with the

increase in the number of users, the mobile internet revenue and mCommerce

are also growing, approximate sales via mCommerce by 2017 will be equal to

$500 billion. Asia will account almost 50% of global mCommerce.

According to the senior product manager at Shopify, which sells back-end

software used by more than 275,000 retailers, Brandon Chu “There is a correlation

between the strength of the brand and the success of the app.”

Coffee giant Starbucks generates 5 million a week by mobile payments through

its app and this trend of payments has already been integrated in the fashion

world. While many brands are providing shopping features in their own apps

themselves, demand for in-app payments such as in case of Uber service, where

the payment mechanism is embedded within the mobile app itself is on a rise

and some key players including Apple Pay and Android Pay are targeting this

segment.

Source: smartinsights.com

Mobile Shopping Apps

In 2014, during the Black Friday event, one-third of all the online revenues came

from shoppers on mobile devices, an increase by 48% compared to the last year;

mobile shopping revenues in the US on Cyber Monday 2014 also increased on 76%

versus previous year. According to the experts, fashion products will turn out to be

the biggest category for mobile shopping in the next ten years.

Many e-commerce giants such as Amazon or Ebay provide both possibilities to their

clients - the mobile website and the mobile app, which, of course, is the best

strategy.

Another trend is a combination of social media experience and mobile shopping.

Spring, a mobile shopping app raised $25 million and among the investors were

fashion professionals like Rachel Zoe, Lew Frankfort (former chief executive of Coach

brand) and Groupe Arnault (the fund controlled by LVMH’s Bernard Arnault).

Source: ComScore

Payment Services by Social Media

Social media has been playing a big role in the shopping journey for

a while now, and it continues to do so even more in 2016. However,

more retailers are now looking to adopt social selling solutions such as

Soldsie (selling through comments) and Like2Buy (user generated

content galleries).

Here is shown an example of an Apparel retailer TopShelf Style which

is a great example of social selling in action. TopShelf utilizes Soldsie,

a solution that allows the retailer to implement comment selling on

Instagram. Whenever TopShelf puts something up for sale on

Instagram, customers who want to buy it simply need to comment

“sold” together with their email address. Soldsie then generates an

invoice and sends it to the shopper, so they can complete the

transaction.

Retailers like Macy’s, Tesco and Nordstorm have started to offer

integrated payment offerings and integration with social media

channels

Payment Services by Social Media

Social Payments trend is growing leaps and bounds. It is interesting to note that

even if PayPal is one of the leaders of online payments in the Western part of

the world, China became the battlefield of the tech titans for all the money

people have. Tech giants, Tencent and Alibaba, have decided to enter

banking and offline payment spheres and presented their own online payment

services WeChat Payments and Alipay Wallet with an absolutely new “for other

world” features. It’s not a surprise to find a number of different ways on Alipay

Wallet to buy goods and services through its variety of other apps, where any

number of different products can be purchased, transfer money to the users

virtually, or “split the bill” function etc.

Moreover, the app is already available for mobile payments in Taiwan and

Hong Kong and will arrive in South Korea soon. In Hong Kong, 336 OK

convenience stores, 90 Bonjour cosmetics stores and 10 Giordano apparel

stores have supported QR code payments through Alipay Onsite — merchants

accept payments by scanning QR codes generated from customers’ Alipay

Wallet app.

global.alipay.com

Besides sending and receiving money friend-to-friend,

Messenger now also lets one pay to selected US retailers and

will soon launch feature to make in-store purchases. It require

a debit card on both ends of the transaction. However,

there's no cost to use the service. It offers PIN-based

protection and "industry-leading security” according to

Facebook itself.

It works in two easy steps:

1) Add your debit card

2) Open chat with the sender/receiver

3) Tap Payments to Pay or Request to receive, enter the

amount and send

The transaction appears an an embedded item inline with

the chat. A receiver can then accept or reject this

transaction.

Payment Services by Social Media

Case-Study: Facebook Messenger

cnet.com

South Korean KakaoPay has successfully reached 10 million monthly

active users in 2016, for its mobile payment platform after just being in

the market for 1 year. With 60% of its users being females, KakaoPay

allows only KakaoTalk users to pay for e-commerce products through

KakaoTalk. The users can pre-register their credit and debit cards,

and make transactions by typing in their passwords.

Kakao claims that the largest single transaction through the mobile

payment service was about 17 million won ($14,693), and users

participating in the service's membership feature have accumulated

113 million points, which can be spent to get items from 12 local

stores in the country.

Payment Services by Social Media

Case-Study: KakaoPay

znet.com

Japanese LINE Pay is a mobile payment service available in Japoan, Taiwan,

South Korea and Thailand, run by one of the largest mobile messaging app

company in the world, LINE Corporation.

One can send, accept and ask refund via this platform.

In March 2016, LINE Corporation announced an expansion of its LINE Pay

services, providing an easy cashless method of completing transactions. The

new services include LINE Pay Card, a prepaid card allowing conventional

purchases at the register, and LINE Points, a point system that rewards users

for using various LINE services.

For in-store payments, LINE is developing a method that by scanning a LINE

Pay barcode from the customer's smartphone screen at the register,

participating physical retailers will soon be able to accept payments through

LINE Pay.

Payment Services by Social Media

Case-Study: LINE

Weibo with more than 212 million monthly active users as of 2015, has

85% of them coming from mobile terminals. The users for Weibo’s

homegrown payment solution Weibo Payment have hit over 46.50

million users.

In an attempt to boost its m-commerce initiative, Weibo’s mobile

app has added a new social shopping feature similar to WeChat’s,

enabling selected users to sell goods to followers.

It is also very interesting and rather surprising to know that Weibo

allows not only re-post from third-party eCommerce sites such as

Alibaba’s Tmall and Taobao, but also from the fierce competitor

Weimai, the Wechat mobile commerce marketplace.

Weibo has long being known as a breeding place of Asia’s most

influential personas (bloggers, celebrities etc.) and through this

commerce system is not only bringing them closer to their fans but

also offering a mobile-commerce experience in a pure social media

environment

Payment Services by Social Media

Case-Study: Weibo Payment

China’s giant tech company, Tencent (owner of WeChat), not long

ago launched WeChat Wallet function, via which the users can send

money, or digital red envelopes bearing money or gifts, to friends or

make payments at a variety of offline stores.

However, from March 2016, a fee of 0.1 per cent is being levied on

digital transfers made by the users to bank accounts where the sum

exceeds 1,000 yuan (US$153). The minimum fee per transfer will be 0.1

yuan. WeChat’s biggest rival for mobile payments, Alibaba-backed

Alipay, does not charge its mobile users for transferring money to

bank accounts, although website users are charged 0.2 per cent of

the transaction value.

Tencent has also launched its own money market fund in direct

competition with Yuebao App. As a result, Alibaba and Tencent are

starting to compete on the markets that always have been under

control of financial companies – they are fighting to fill up their virtual

pots with real cash from the Chinese consumers.

* scmp.com

Payment Services by Social Media

Case-Study: WeChat Wallet

Mobile Payment Apps

Digital Wallets, as better known, are the cashless more

secure way of making a payment, with all tracks online. The

big three i.e. Google, Apple and Paypal hold the most

market share, but many others are also gaining pace:

Google Wallet uses Near Field Communication (NFC)

technology, one can tap and pay in stores (that accept

MasterCard PayPass) by linking his debit or credit card to

his Google account. The service is only available in the US

for now. Some retailers using this feature are Tommy

Hilfiger, Fancy, Rakuten, Rockport etc.

Apple Pay lets US people pay in store (with iphone or

Apple watch) or within other apps. iPhones equipped with

the requisite NFC radio antennae and Touch ID sensor

work. With Apply watch, one can pay using Apple watch

app for iphone. Retailers like Aeropostale, American

Eagle, Macy’s, Nike and Sephora are already using this

feature

Alipay is an Alibaba-owned Chinese equivalent of Paypal,

controlling more than 50% of all transactions in China. It

recently launched in Europe and is used by retailers who

have many Chinese customers. One can pay either by

scanning a 2D QR code in store or adding the merchant

and directly transferring money via app

Paypal app allows users to send money between each

other’s PayPal accounts as well as pay for a service. In

stores supporting this service, with 4-digit PIN, one can pay

and checkout. Adidas, Nike, Nautica, UGG, Ralph Lauren,

GUESS and Calvin Klein and many other offer this service

LifeLock Wallet is a powerful app that lets one store and

use his debit, credit, ID, insurance and loyalty cards. All this

information is turned into a barcode to be scanned at the

time of payments

Besides the apps themselves, many examples of a merging brick-and-mortar and online

experience via mobile payment at standalone stores are emerging. Aurora Fashions, the

parent company of Coast, Oasis, Warehouse and Karen Miller teamed up with PayPal to let

their customers pay from mobile phones.

The PayPayl app provides customers with a unique barcode and transaction number which

the shop cashier scans to take payment from the customer’s PayPal account. Such app

makes it possible to do the payment at any point of the store and thus saves time too.

Sales staff at Nordstrom also uses mobile point-of-sale (POS) devices to do a check out at

any moment and anywhere in the store. According to the company’s 2012 March Sales

Report, “Preliminary quarter-to-date total retail sales of $1.73 billion increased 15.3 percent

compared with total retail sales of $1.50 billion for the same period in fiscal 2011.”

Additionally, according to the 2011 Nordstrom Annual Report, “both the average selling

price and the number of items sold increased in 2011 compared to 2010.

• forbes.com

Mobile Payment Apps

Case-Study: Oasis

Oasis Store

Two years ago, Ebay Inc. launched what it calls its ‘digital storefront’ in

San Franciso and New York bringing the wholly digital shopping

experience to the physical world. Shoppers interested in buying or

browsing from these storefronts can touch the glass, and select from

one hundred of items of merchandise and they can check out by

pushing this order to their mobile phone. Payments can be made

through their mobile phone and shoppers can either opt for free

home delivery or pick up at one of their pick up locations.

Previously in 2013, Ebay also partnered with The Westfield Labs to

create for retailers Rebecca Minkoff, Sony and TOMS an interactive

digital storefront where the visitors could interact with their window,

choose a product and pay with Paypal: http://fsh.by/ul4_Cg

Mobile Payment Apps

Case-Study: Ebay

Ebay store, USA

Innovative Payment Solutions

Whether it is online or offline, if a customer is given

that trust and convenience to pay anyone, anytime,

wherever he is, he will do that in a faster and

compulsive manner.

Technological advancements in hardware (mobile

point of sale, contactless, near field communication

NFC, and wearabales) have led to an increase in

payment channels for the retail customers.

Technology giants are also working on to provide a

convenient solution for the merchants as well

whereby they can perhaps receive instant cashless

payment without having to wait for long.

Merchants are also leveraging new technologies such

as Internt of Things (IoT) to leverage real-time

transaction data to understand soncumer behaviour

and formulate the next strategies, accordingly.

Peer-to-peer (P2P) money transfers, mobile money schemes and retail shopping

payments have witnesses the highest innovation levels in the recent years.

Chirpify lets one use social media apps like Twitter and Instagram to

buy, sell, send and receive money, using Paypal.

Once a user creates a profile on their website, he can then create a

listing on his dashboard if he is say selling something or wants to start

a fund raiser. He can create a listing via Instagram with the captions:

• ‘$5 #instasale‘ to sell

• ‘$0 #instagimme‘ for a giveaway

• ‘$10 #instafund‘ for a donation

Other Chirpify members buying such items simply have to comment

‘Buy’ on Instagram or reply with ‘Buy’ on a Tweet, and the

transaction is automatically completed. Chirpify users can also send

money between friends or make donations via Twitter.

There is however a 5% transaction fee on the money that enters

one’s Chirpify account.

Innovative Payment Solutions

Case-Study: Chirpify

Hongkiat.com

Even though its an old case, the concept is worth mentioning.

The North Face wanted to try something innovative to reach their

target audience and drive foot traffic into stores, so they decided to

leverage Placecast’s location based mobile technology to run a

mobile customer loyalty program.

Location-based mobile marketing campaign was done in New York,

Boston, San Francisco and Seattle in 2010. The radius of the geo-

fences was approximately half-mile around the North Face stores.

The text alerts were sent only to those who had opted-in to receive

such messages.

Even though specific program response rates are not available

publicly, but given that the company later expanded the program to

37 of its retail locations nationwide, it is safe to say that it was a

success.

Innovative Payment Solutions

Case-Study: The North Face and Placecast

In 2014, Harvey Nichols put tablets in-store for customers to

interact with products via NFC tags on shelves.

The stickered shelves would advertise what sort of content to

expect, perhaps some Pinterest boards showing pieces

being worn, or celebrities wearing a particular outfit, or more

common detail.

Customers could shop alone or with a store associate and

save a 'collection' of scanned items when finished if they

wished. Entering an email address would allow for this, and

for Harvey Nichols to re-engage the customer via email.

At the end, good results were achieved - 90% of shoppers

engaged in store were not previously known to the brand.

16% of all shoppers engaged with the experience. 7% self-

identified via email. 18% took further action after receiving

an email.

Innovative Payment Solutions

Case-Study: Harvey Nichols and NFC

The U.S. Fanzz retailer installed the touch-screens with

products’ web catalogue and a payment terminal. This

enabled the clients not only to browse for the information

but also to order currently unavailable products. Such

practice can be a fitting solution for such brand stores which

have small areas for the merchandise displays and also can

reduce the risk that a potential client will look for the product

on other retailers’ web source. As the result, Fanzz company

witnessed increased purchase rates and customer

engagement with the in-store marketing messages.

Innovative Payment Solutions

Case-Study: Fanzz

Omni-channel Strategies in Retail

Distribution Strategies: Online & Offline

presence

Conditionally, there are several types of the distribution strategies used by the

fashion brands. These are:

Offline presence only via DOS - Directly Operated Stores, e.g. Giada

Offline presence via DOS and retailers, e.g. Harry Winston, Goyard

Offline presence only via retailers, e.g. Dima Ayad

Offline presence with DOS and official online store e.g. Louis Vuitton, ZARA

Offline presence with DOS, retailers and official online store e.g. Van Cleef &

Arpels

Offline presence with DOS, retailers and e-tailers, e.g. Givenchy

Offline presence with DOS, retailers, official online store and e-tailers e.g.

Michael Kors, Fay, Missoni, Stella McCartney

Online presence only with official online store, e.g. Asos, Net-A-Porter

Online presence only with official online store and e-tailers/retailers, e.g. Mochi

It is important to note that the approach towards distribution structure doesn’t

depend on the market segment of the brand, but on the strategic decision of the

company.

Over the past years, marketing approach has changed - from single channel

marketing to multi-channel marketing - and now it has evolved to omni-channel

marketing strategy for the brands and omni-experience for the customers.

Multi-channel meant retailers sold directly to the customer via more than one

channel but they were isolated with channel-centric experiences.

One of the main differences between multi-channel and omni-channel marketing

is that in omni-channel marketing there is a seamless approach toward the

consumer across all the available channels. The key point is that these channels

should work simultaneously and be integrated into one another. It’s not just about

sales, but also about communication strategy.

Even though e-commerce and web promotion were considered by marketers also

in multi-channel marketing, in reality what they did was just to make sure that the

brand’s website address is on the shopping bag, or the TV/print ad refers to the

web site or that there is a store locator function on the web homepage. Omni-

channel marketing implies unfettered and infinite access to the brand’s

information and products irrespective of the time and/or geography, in all possible

brand’s channels and/or customers’ devices.

Distribution Strategies: Omni-channel

approach

Shopping behaviour of today’s customer is not merely online or offine; the shoppers conducting their research online can complete the transaction

at the brick-and-mortar stores. Known as Showrooming, a customer might see the product in the physical store but buy the item online, later.

Conversely, the research can be done online but ultimately the products might be bought offline; known as Webrooming.

According to a recent research on consumer shopping behaviours, showrooming is on a rise of 46%, whereas webrooming is still bigger as 69% of the

customers prefer it. Whilst webrooming can be enhanced by brand’s well-driven online presence, showrooming can be turned into an advantage, if

the integration strategy is well set with the help of strategies such as voucher coupon ads via brand’s apps motivating customer to go to physical

store.

Another research on mobile usage in-store shows that the shoppers who use mobile more, spend more in-store. Moreover, frequent mobile shoppers

spend 25% more in-store than people who only occasionally use a mobile phone to help with their shopping.

Eventually, seamless integration of these online and of offline brands’ channels would create a balanced growth on both channels. Omni- channel

retailing, at this point, aims to provide customers with the brand experience, not just different channels of interactions. This is not just about sales, but

also about communication strategy. There will be a focused view on each customer and he would be serviced consistently across all channels,

which should work simultaneously and be integrated together.

Omni approach can be seen as a counter action for the e-commerce operated separately from of offline operations of a brand. Online

stores should be simultaneously operated with the of offline operations which would both prevent merchandising conflict and enable

analyzing customer behaviour to integrate within strategical decisions to be taken and lead to the positive growth in the sales, overall. Following are

the case-studies on the successful brands, which were able to increase the revenues on both channels, online and offline.

Distribution Strategies: Omni-channel

approach

In June 2013, Gap announced its “Reserve in Store” campaign implemented in 40

Gap and Banana Republic pilot stores in San Francisco and Chicago.

Through the campaign, consumers could reserve up to five items and try them in a

selected Banana Republic or Gap store. After the reservation, the consumer were

receiving a confirmation of the items on-hold together with the pick-up instructions.

The items were held in the selected stores until the end of following business day.

This game changing action was supposed to boost holiday sales as well. Moreover,

the tendency to buy complimentary items in addition to what the customers

initially reserved, was going to be triggered by inspiring them with additional items

in-stores.

Observing how easy the program is to use for the customers in pilot region, the

retailer decided to expand the program to 400+ U.S. stores and more than 200

Gap stores in 15 major markets in November 2013. While they did not disclose the

result numbers, a highly positive response coming from these markets was reported.

Case-Study: GAP

British-Irish department store, House of Fraser, together with Box Technologies, launched

concept stores by merging brick-and-mortar store with the company’s e-commerce

service. The company installed a series of large format ELO Touch Screens and

computers in-stores to order products online, which are then delivered the following day

to either the customers’ home or to the store for a pick-up. Customers were directly

reaching 1000 brands stocked on House of Fraser’s recently redesigned website.

Moreover, the customers were provided with a comfortable seating and complimentary

coffee bar as a part of the overall concept with a relaxation zone. In addition, sales

advisers help customers to navigate House of Fraser’s online offering, assisting them with

the process from product selection to secure online payment.

House of Fraser had announced its 2013 fiscal year Revenue as $1.83 bln. After the

launch of the innovation, the online sales increased by 107% in the first half of 2014.

Looking at the whole year, the department-store chain’s performance was driven by

online sales which were up by 31.2%, eclipsing growth in its physical stores which stood at

just 4.2% on a like-for-like basis. A 6% up itself, was observed in seven days before

Christmas. Following this record, the chain is now owned by Nanjing Xinjiekou

Department Store Co. Ltd, and expected to continue to grow its online business.

Case-Study: House of Fraser

According to the annual report of Deckers Outdoor Corporation, the

net e-commerce sales of the company increased by 37.5.% in the

fiscal year ending in April 2015, whereas this increase is 17.6% for the

total retail stores.

The reason behind this success was the strategic implementation of

innovative new technology, to blur the lines between physical retail

and e-commerce. Deckers allowed its customers to customize and

view the RFID tagged items they are trying on the four touchscreens

throughout the store within a created content including product

information and options as well as style tips, videos, related

marketing campaigns, and suggested complimentary products. The

store also aimed to use technology to inform more customers about

its lesser-known brands. Moreover, Deckers provided eight iPads in-

stores that allowed customers to order out-of-stock items online and

have them shipped for free.

Within the well established online and of offline integration, net sales

per brand per sales channel had a positive growth. In other words,

e-commerce did not cannibalize but stimulated the offline retail

results.

Case-Study: Deckers

Net sales by brand 3/31/2015 12/31/2013 Amount %

UGG $1,493,193 $1,298,880 194,313 15.0%

Wholesale $903,926 $818,377 $85,549 10.5%

E-Commerce $209,722 $155,635 $54,087 34.8%

Retail stores $379,545 $324,868 $54,677 16.8%

Teva $126,743 $116,387 $10,356 8.9%

Wholesale $116,931 $109,334 $7,597 6.9%

E-Commerce $9,179 $6,627 $2,552 38.5%

Retail stores $633 $426 $207 48.6%

Sanuk $114,711 $101,680 $13,031 12.8%

Wholesale $102,690 $94,420 $8,270 8.8%

E-Commerce $8,214 $6,077 $2,137 35.2%

Retail stores $3,807 $1,183 $2,624 221.8%

Other brands $82,410 $39,671 $42,739 107.7%

Wholesale $76,152 $38,276 $37,876 99.0%

E-Commerce $5,955 $1,195 &4,760 398%

Retail stores $303 $200 $103 51.5%

Total $1,817,057 $1,556,618 $260,439 16.7%

Total E-Commerce $233,070 $169,534 $63,536 37.5%

Total Retail Stores $384,288 $326,677 $57,611 17.6%

Net sales , in thousands

Deckers Annual

Report, 2015

Burberry Regent Street opened its doors in 2012 as the largest ever

London store on Regent Street. Designed to reflect the website of the

company, Burberry showed how much it cares about the digital

presence. As ex-CEO Angela Ahrendts stated: “Walking through the

doors is just like walking into our website. It is Burberry World Live.

”Known as the digital leader of the industry, Burberry has an increasing

growth year-on-year not only online but also offline.

71% of revenue (2014: 70%); with 214 mainline stores, 213 concessions

within department stores, digital commerce and 57 outlets.

The 9% comparable sales growth was broadly evenly balanced

between halves, but reflected differing regional trends. In-store, footfall

declined but was offset by improved conversion and higher average

transaction values. Online, mobile doubled its share of revenue in the

year, following the launch of an upgraded mobile platform in the

second half of the year.

Case-Study: Burberry

Net sales are in thousands

Revenue Growth

Burberry Annual Report, 2015

Today, it is hard to find a brand which is completely offline or 100% online, even if the brand

doesn’t have official online store or doesn’t work with e-tailers it can be present online thanks to

the social media channels and the website. Another misleading concept is that premium and

luxury brands can devaluate their brand image with online store presence. It’s true that premium

brands were slower in adoption of e-commerce compared to the activewear or mass market

brands, e.g. Dior is selling selective goods on its official online store, while Chanel limited its

merchandising for online store with licensee products only (fragrance, makeup and eyewear).

At the same time, Gucci provides possibility to shop the entire collection online and moreover,

launch capsule collections for the internet sales only.

At the same time, there is another trend when online companies are entering physical

environment. Net-a-Porter, a premium e-tailor, launched a print magazine to enhance the

online sales. In 2016, Amazon is going to open the third brick-and-mortar bookstore and the retail

giant has also already launched a private clothing label.

At the end, the companies sell goods to concrete customers, who are living in the physical world

and are connected 24/7 via smartphones, computers, tablets, smart watches and many other

devices, where they discover new brands and products or search for the advice. Hence, the

brands should analyze all possible touchpoints with customers through the online and offline

environment to maximize sales results of the brand, despite distribution channels.

Omni-channel Strategies: Online vs Offline

Presence

Amazon Books in Seattle

Strategies to Engage Customers

Strategies to Engage Customers

Digital technologies have entered all aspects of our lives and retail is no exeption. Brands all over the world are continuously trying to surprise their

customers investing in the stores’ environment. The most common techniques that involve digital technology are:

• Shopping Windows

• Virtual Rail and Smart shelves

• Augmented Reality

• In-store Tablets

• Smart Mirrors and Fitting Rooms

• Proximity Marketing Solutions (push notifications)

• Social Media Engagement

• Gamification

Shopping Windows: Adidas

The new storefront window is a fully functioning virtual store with life-size

products. The intuitive interface of the touch-screen window lets

shoppers explore, play and drag life-size products they are interested

in directly into their smartphone for easy and convenient purchase

from adidas NEO online.

By visiting a simple URL via their smartphone and typing in a one-time

PIN, the shopper’s mobile becomes interlinked in real time with a

shopping bag on the window, showing a live view of its contents. Any

product dropped into the window’s shopping bag instantly appears

on the mobile. The shopper can edit product details, save products for

immediate or later purchase and share with friends through social

media or email.https://www.youtube.com/watch?v=MYBURgFgP7w

Shopping Windows: Kate Spade

Kate Spade, together with eBay Inc., launched touchscreen storefront

in New York. Four interactive window shops in downtown Manhattan

were opened 24 hours a day 7 days a week, to allow shoppers to

select and order merchandise from Kate Spade Saturday.

To purchase, people need to select the items and punch in their cell

number to get a text that allows to schedule free same-day delivery.

https://www.youtube.com/watch?v=CdotI0wax4Y

Virtual Retail and Smart Shelves:

Vanquish

https://www.youtube.com/watch?v=vLlwLjQWYu4

Japanese apparel store VANQUISH has integrated teamLabHanger digital

mannequins into its Ikebukuro Parco shop in Tokyo, to give customers an instant

visual of how clothing looks on their bodies. Each clothes hanger is equipped

with a unique ID. When a hanger is removed from a garment rack, the

teamLabHanger system identifies the item and displays a video or photo of a

model wearing the selected piece on a nearby monitor. When the hanger is

placed back on the rack, the display switches off automatically.

Virtual Retail and Smart Shelves:

Mark & Spencer

https://www.youtube.com/watch?v=GG5liV2U0Qg

Mark & Spencer opened their first store in Holland in the popular Kalverstraat

district in Amsterdam. Within the store, customers can buy food but also explore

the full range of clothing products on tabletops in the store and on digital

screens.

A nine panel videowall displays content using a new digital signage software

solution, there is also digital signage on columns showcasing the latest fashion

for the season in the form of catwalk videos.

Virtual Retail and Smart Shelves:

BaubleBar

https://www.youtube.com/watch?v=d0r3dU0chU0

BaubleBar’s SOHO pop-up store showcases their jewelry using a unique display

system that enables customers to interact directly with their product. As a

customer picks up an item, it activates an animation of diamonds that sparkle

and swirl around the product. Then, the surface where the jewelry was kept

displays more information about the product the customer is holding in her

hand. The combination of product interaction and information display creates

a fully immersive shopping experience for BaubleBar’s customers. BaubleBar’s

interactive display was developed by Perch Interactive, a New York-based

interactive design firm.

Augmented Reality:

American Apparel

https://www.youtube.com/watch?v=0O9CUpqSNRU

Clothing retailer, American Apparel, is adopting augmented reality to

bring the online experience offline. By using the augmented reality

application, in-store patrons can scan the item to see the product in

different colors and read reviews by other customers who have bought

that item.

Augmented Reality: Topshop

https://www.youtube.com/watch?v=c8jSlq8Tqlc

Topshop gave customers specially commissioned virtual reality (VR)

head-sets to enter the 360-degree virtual world of a live Topshop

fashion show. The headsets gave customers a hybrid of live feed of the

TopShop catwalk show as well as all the backstage action. Special

cameras recording the scenes were deployed on the catwalk and

backstage, so that each participant was able look around at models

and celebrities as part of the event.

Augmented Reality: Tommy Hilfiger

Tommy Hilfiger’s Fall 2015 catwalk show was available to be watched

via a virtual reality experience in selected stores around the world.

Using a Samsung GearVR headset, shoppers could watch a 360-

degree, three-dimensional version of the runway as though they’re

sitting in the front row.

Augmented Reality: Dior

https://www.youtube.com/watch?v=STLfm9u9ZlE

Dior Eyes is an innovative new retail concept pioneered by the iconic

French fashion house that will serve as an immersive way to interact

with clients. It was available for public viewing at Dior stores in June

2015, to see closely a behind-the-scenes look at the world of the

brand's backstage show preparation.

Augmented Reality: Tissot

https://youtu.be/LJSVIBj3g1w

Swiss watchmaker Tissot showcased its products at the Harrods

department store by using a virtual 3D try-on service. Using technology

sourced from 3D specialists Holition, customers visiting the Brompton

Road store were able to wear virtual versions of Tissot watches through

an augmented reality system.

By wearing a paper strap around their wrist, visitors will be able to see

how the ladies and T-Touch men’s collection can appear on them, by

looking into a nearby monitor.

In-store Tablets: JC Penny

https://youtu.be/xQa1eHVk4tw

JC Penney created the Levi’s denim bar. A touch screen and installed

app makes it possible to explore new looks, to see all available washes,

to find a perfect fit and to look for the extended sizes.

Aside the mobile checkout, the iPads will also be available as a

source for additional information on the brand, an expanded

merchandise selection and videos of the products. Those shopping

from home can also access the virtual denim bar online.

In-store Tablets: New Balance

https://www.youtube.com/watch?v=Nm0RcLKktFE

New Balance created an iPad application to enhance the customer's

in-store shopping experience. It acts as a point of engagement during

self-service and consultative sales interactions.

The application gives sales associates an access to the features and

utilities that allow them to assist customers with sizing, product

information and comparisons. It also provides a view into the full set of

New Balance products while offering access to an array of information

about their products and technologies.

In-store Tablets: Hointer

A true innovation was shown by Hointer company. Its store in Seattle

is 100% digitized and provides very unique customers experience just

with an app. At the first view, Hointer’s store looks like a showroom.

Every style is displayed in a single copy, which helps a client to have

detailed look and touch. With an application, the customer can tap

the item to have information about the product, the reviews by

others, media clips and can also add the product to the fitting room.

In 30 seconds, the chosen items of your size will be inside a specific

fitting room.

From the touch screen inside the fitting room or with an app, it’s

possible to order a different size or a different model and even

request the assistance of a stylist. The payment procedure is also very

simple. A client has to click on the check-out on his phone and bring

the phone to the check-out kiosk and tap it. There is no need to scan

the products as the kiosk already knows the items that the client is

going to purchase. Last step is to swipe the card. All the processes

inside the store are completely automatic.

Smart Mirrors & Fitting Rooms:

Ralph Lauren

https://youtu.be/vFF95SvTfRE

The fitting room mirrors use RFID technology to recognize the items a

customer has brought in with them, rendering the products on the

screen. The mirrors show other available sizes and colors for each item,

as well as recommended products based on what you’ve brought in.

A “call an associate” button connects to a salesperson’s tablet on the

floor to call them to the fitting room. Other features like different

lighting settings and language options help flesh out the brand

experience.

Smart Mirrors & Fitting Rooms:

Rebecca Minkoff

https://youtu.be/6G3JIyG_GeY

In the fitting room, the technology — powered by eBay — again

overlays the mirror; no cameras are involved in the tech integration.

RFID tags recognize each item brought in, and shoppers can pull up

product screens that show the item styled with different looks, as well

as other available sizes and colors, much like you would find when

shopping online.

Smart Mirrors & Fitting Rooms:

Nike

https://vimeo.com/135480452

At Nike store in Berlin, three stand-alone terminals were installed,

communicating via an underlying middleware and server

infrastructure: The Media Wall, Replica Kiosk and The Nike bootroom.

Each terminal has a custom technical stack. Additionally, the terminals

are integrated with the existing store's ERP catalog and eCommerce

shop to inform real-time product availability. Design and development

in Unity, a game engine rather than a web solution, guarantees high

performance and flawless usability as well as overall stability.

Smart Mirrors & Fitting Rooms:

Karl Lagerfeld

Shoppers can take selfies in Karl Lagerfeld’s changing rooms using

inbuilt iPads connected to the internet. Karl Lagerfeld flagship store,

which opened on London’s Regent Street has installed the iPads into

the walls of each changing room.

Customers can not only take selfies in their outfits, but also apply filters

to the pictures, and then share them on social media via Facebook,

Twitter or email.

Smart Mirrors & Fitting Rooms:

Brioni (powered by Sharp & CLX Europe)

Placed in Brioni’s flagship stores acrossfive of its major boutiques -

Milan, Rome, Penne (Pescara), Las Vegas and New York, the Brioni

Miror is a new suiting technology whereby a customer is provided with

many different fabric and colour options for a suit, that he can choose

to see on a virtual maneqquin.

By 2017, brand wishes to be able to take this technology a level up

where if a customer is looking at the mirror, he will be able to see that

particular design on his own self in high definition rendering, virtually,

by interacting with the mirror.

https://vimeo.com/98918184

Proximity Marketing Solutions:

Macy’s

IPhone owners who use the retail app Shopkick will start receiving a

notification when they walk into either Macy’s Herald Square, New

York or Union Square, San Francisco locations. The notification will

direct them into Shopkick’s app, which can alert them to deals and

remind them of products they were interested in that are on sale at the

store.

https://www.youtube.com/watch?v=CipsLFB8KFk

Proximity Marketing Solutions:

Duane Reade by Walgreen

Duane Reade, the largest drugstore chain in New York City, now

owned by Walgreens, updated its app in May 2014 by integrated

iBeacons in 10 select locations. This allowed the pharmacy chain to

add new features like weekly ads and coupons, pill reminders, the

ability to schedule appointments, save shopping list and an option to

order photo prints from Instagram. Customers will also receive

notifications (even on their locked screens) as they near a store, and

get discount offers based on what they previously purchased.

Social Media Engagement: Ted Baker

To celebrate the launch of their Christmas campaign, Ted Baker has

created a large scale digital Mistletoe installation situated on top of

store entrances, exclusively at three stores globally, titled ‘Merry

Kissmas’. The three stores participating are New York 5th Avenue,

London Westfield and Tokyo’s Omotesando. To sit alongside this

exclusive window scheme designed and realised by Kin Design, Ted will

also be hosting a digital and social media ‘Meet Me Under the

Mistletoe’ campaign, where Ted Baker called out to customers and

members of the public around the world, passing by or visiting the

select stores to take a photo under the mistletoe. Utilizing personal

Twitter and Instagram profiles with the hash tag #KissTed they will then

automatically be entered into a competition to win a romantic luxury

holiday for two.https://vimeo.com/81832701

Social Media Engagement:

Marc Jacobs

A Marc Jacobs pop-up store located in New York’s SoHo was

accepting Twitter, Facebook and Instagram posts, tagged

#MJDaisyChain, instead of money for purchasing a new Daisy

perfume. The store will remain open also during New York Fashion

Week in February 2014.

https://www.youtube.com/watch?v=42BEJ5r_wkQ

Social Media Engagement:

Nextatlas

Nextatlas is an innovative service that provides accurate analysis

on emerging trends in fashion, design, style.

It is a new way to do trend forecasting whereby Nextatlas

combines data coming from the leading image-sharing social

networks like Tumblr, Instagram, Twitter, Pinterest, and reorganizes

it via an internally developed algorithm, into useful reports for the

fashion, design, communication and marketing professionals.

The brands can easily visualize emerging trends according to

their sectors and needs, through the combination of images from

different streams of these social media channels, and can bring it

to use such as better understanding how to compose their

restocking or to find inspiration for their next collection.

www.nextatlas.com

Gamification: iCoolhunt

Launched in 2010 by two brothers from Turin, Luca and Alessio Morena

(also the founders of Nextatlas), "iCoolhunt" application is a location-

based photo-sharing platform for reporting new trends. It is an

interesting way to collect grassroots data on the current trends.

The founders describe it as a Social gaming app where all users called

“coolhunters” upload pics and tips related to interesting and

fashionable trends in clothes, design, tech, music and various other

lifestyle trappings. Players gather followers and votes to level up from

Rookie to Observer to Spotter and finally to Guru. Users can also see

emerging trends mapped out locally and globally on the Trenditory.

www.icoolhunt.com

mashable.com

Gamification: Uniqlo

https://vimeo.com/151343864

Japanese retailer, UNIQLO, has rolled out its first-ever neuroscience

fashion campaign that matches clothing selection to consumer’s

moods.

The wearable technology, UMood, is placed on the forehead of

customers, who are then shown a series of still images and videos. Their

neurological reactions provide a brainwave reading, allowing UNIQLO

to score this against an algorithm that will then suggest a t-shirt from

the retailer’s range to match the consumer’s state of mind.

Gamification: Sun & Sand Sports

https://www.youtube.com/watch?v=oHiWNH5BpT8

Sun & Sand Sports is committed to delivering exciting and innovative

experiences for its customers. Their concept stores realise this vision

perfectly with interactive buying guides, digital displays, customization

and training zones along with smart dressing rooms. Three interactive

Experience Zones (football, basketball and running) highlight the sights

and sounds of each sport, with social media integration and the ability

to capture customer details. Their CRE-8 Customization Zone allows live

artists to personalise items, from sneakers to surfboards, and a central

event space showcases new products and up-and-coming sports.

Gamification: The North Face

The North Face is using artificial intelligence to engage

with customers, on its website.

In Nov 2015, the brand announced testing of a software

that will act as the “personal intelligent online shopper”.

Using the IBM Watson artificial intelligence platform and

Fluid XPS intuitive recommendation engine, customers

can now use natural conversation as they shop online

to receive personalized outerwear recommendations.

Users enter information on when and where they would

like to use the jacket and answer a series of questions

regarding additional preferences (features, colours

etc.). The system then suggests the products matching

the preferences.

www.thenorthface.com/xp

s

Virtual Fitting Rooms

Virtual Fitting Rooms Overview

Virtual fitting rooms are the online equivalent of the regular in-store changing rooms – that is, it enables shoppers to try on clothes to check

one or more of size, fit or style, but virtually rather than physically. Having begun to emerge from 2005, fit technologies started to be widely

reported from 2010, but are now available from an increasing variety of providers and are in use by a growing number of prominent retailers

in their webstores or in their physical retail spaces. There are several types of approaches:

Approach Startups/New businesses Established technical companies Collaborations

Size Recommendation Fittery, Fit Analitics, Sizer, Virtusize, Stantt, ThirdLove

2D Customer’s Model Virtual Dressing Room Holition Sally Hansen & Holition*,

CoverGirl & Holition*

3D Customer’s Model triMirror, Styliff, Nobrandsolution, ELSE Twin Set & FitsMe*

Brioni & Clx Europe and Sharp*

Augmented Reality MemoMi, Fitnect, Zugera, Xoonla, ELSE

FXGear, Microsoft (Kinect), Uniqlo & Holition*,

Rayban & Fitting Room*, Kakimoto Arms & Toshiba*

* technical partners

Size Recommendation: Fittery

Features: Founder Catherine Iger created big data startup Fittery based on the

concept that most recommended sizing tools for those shopping online are

inaccurate and that leads to $18 billion worth of returns annually. It bases fit not

on size, but on actual garment measurements, and then curates items specific

to the shopper’s measurements, as well as the way they prefer things to fit. The

tool promises sizing that is 34 percent more accurate, and has found in tests

that it can cut retail return rates from the current standards of 30 to 40 percent

for online purchases to 6 percent. The company, which started out with

menswear and plans to move into women’s wear, can also use its data to

make recommendations to brands. For instance, a shirtmaker might sell

significantly more shirts if it just makes them an inch narrower.www.fittery.com

Size Recommendation: Fit Analytics

Features: Fit Analytics is a size advisor providing clothing size recommendations

for online customers by measuring individual dimensions via webcams.

Company works with over 5000 brands that are present on multibrand e-

commerce stores as Asos, or working directly with brands as Puma, The North

Face and 1.5 million individual garments covered, charge a fee only if the

shopper gets a size recommendation, purchases the item and does not return

it. In an A/B test run by the The North Face, Fit Analytics increased conversion

by 2.4%. On an annualized basis, this 2.4% increase projects to an added value

of $1.3 million.

www.fitanalytics.com

Size Recommendation: Sizer

Features: Sizer’s patented computer vision technology enables the

reconstruction of a 3D object (the user’s body) from a set of 2D pictures. This

disruptive technology is applied to the most used device on earth: the

smartphone. The system takes into account multiple parameters for each

garment: measurements, fabric types, flexibility, body tolerance, and the

designer’s vision. It then matches them to users’ measurements, as captured by

the app or entered manually. Sizer propose to way of cooperation: one for

retailers and one for consumers.

www.sizer.me

Size Recommendation: Virtusize

Features: Virtusize lets customers to compare specific measurements of an item

they are looking to buy with a similar item they already own. By displaying and

overlaying 2D silhouettes of both garments, the startup says that customers can

more accurately compare sizes and, ultimately, choose the item that would fit

them best. It’s a compelling pitch and has obvious cost savings over the up

front work involved in 3D visualisation of a retailer’s entire catalog. Startup was

launched in 2011 in Stockholm and work with many brands and retailers

including partnership with Asos, Acne Studios, Balenciaga etc.

www.virtusize.com

Size Recommendation Service: Stantt

Features: This dress shirt startup wants to end the S-M-L measurement

conundrum. How will they accomplish that? It all started on Kickstarter. In 2013,

Matt Hornbuckle and Kirk Keel funded the initial research to scan multiple body

types in 3D and generate about 200,000 measurements with millions of data

points to create 75 custom sizes. Shoppers only have to measure their arm

length, waist, and chest. An algorithm determines the best fit.

www.stantt.com

Size Recommendation Service: Third

Love

Features: Brand that sells bras based on their own fitting chart. Size can be

defined by downloading the app and make a picture of yourself in bra and

tank top. On their website there are a questioner to define your size. Even

though it is fashion brand, their core value is providing their customers real sizes

not standard ones.

www.thirdlove.com

2D Customer's Model: Holition

Features: Holition’s main strategy is focused on digital engagement -

technology meets human experience. They have deployed global projects

using a wide range of technologies. They developed several apps that allows

consumer try-on make up or nail polish by using their photo. As well as offering

their own apps Face by Holition and Nails by Holition they collaborated with big

brands such as Sally Hansen and Covergirl The apps created by using highly

advanced real-time tracking, realistic visualisation and personalised skin tone

analysis all combined into one mobile consumer app.

www.holition.com

2D Customer's Model: Virtual Dressing

Room

Features: Virtual Dressing Room app is an example of trying to fit the clothes on

picture of the customer. There are several categories available such as Shorts,

Skirts, Dresses etc. App shows some pieces from the real brands such as H&M,

Forever 21 and some others, but customers cannot shop in the app.

www.primolook.com

3D Customer's Model: triMirror

Features: The triMirror Designer Tool uses real-time cloth simulation technology,

which captures all aspects of the garment, including the physical

characteristics of the cloth and its measurements, shows where the garment is

tight or loose and how it behaves when the avatar is in action. The clothes

respond so much like the real material that the user can almost touch them.

Using this technology you can create your customized fashion model by

choosing skin and hair color, hair style, body size, body shape, and detailed

body measurements. You can then browse a catalogue of clothes, see

garment details, try on all of the available sizes, add them to your favourites list

and view recent try-on history, and to purchase them.www.trimirror.com

3D Customer's Model: Styliff

Features: Styliff Inc is a tech startup company formed in 2014 in Florida, USA. The

project started in 2013 by students Grega Trobec from Slovenia and Konrad

Zuwała from Poland and won a prize in a EU and Polish innovation programme

(Lower Silesian voucher for Innovation) in the same year. In 2014 during Grega

Trobec’s Student Exchange Programme in Barcelona they successfully raised

Seed Capital from a Brazilian Angel Investor and formed Styliff Inc together with

Brazilian, Dutch, Spanish and US partners. Styliff is a revolutionary virtual dressing

app that allows users to try on clothes, purchase them and share outfits with

friends, unfortunately now only available for US.

www.styliff.com

3D Customer's Model: Twin Set &

Fits.Me

Features: Twin Set in coloboration with Fits.me provides their e-commers

customers the posibility to try clothes online by just entering measurements into

the program. Fits.me, one of the most advanced technologies of the moment,

will be made quickly and easily a 3D avatar with your appearance and suggest

you the best size option.

www.twinset.com

3D Customer's Model:

Nobrandsolution

Features: Italian startup that offers the Taylormatic platform which is a 3-

dimensional virtual product configurator. It allows users to select customizable

products from a virtual catalogue, which they can subsequently configure and

customize to their liking. Configuration options include the selection of product

components, shapes, accessories, materials as well as colours.

Taylormatic is not limited to specific product types. Thanks to its flexible

database and the possibility to configure every aspect of the User Interface,

such as icons, menus, the logic tree of the catalogs and so on, it can be used in

every field by every brand and customers, from fashion to furniture, from

watches to automotive, as well as architecture and design.www.angel.co/nobrandsolution-srl

3D Customer's Model: Samsung

Samsung Turns OLED Displays Into Virtual Fitting Rooms.

Integrated with Intel Real Sense technology, the OLED displays

create a sort of interactive closet.

Both devices tap into Intel's Real Sense technology, and are

intended for retail outlets that want to provide customers with

a virtual fitting room. But Samsung said the Mirror Display

(pictured) might also one day replace home mirrors.

3D Customer's Model:

Brioni & Sharp and CLX Europe

With a software designed and developed by *Clx Europe, installed on

the monitor Sharp PN-70-inch E703, Brioni Miror is a large vertical screen

that can be seen in five of luxury menswear brand Brioni’s boutiques -

Milan, Rome, Penne (Pescara), Las Vegas and New York.

The interactive screen has the ability to simulate up to more than 8

million possible combination displays from 1500 different fabrics and

accessories, on a 3D human figure, using Tablet as an interface.

According to Roberto Antoniotti, CEO of Clx Europe, “The tablet may

also contain information relating to customer preferences, and the

software can propose fabrics based on the climate of the placewhere the store is located. Once you have madeyour choice, you can

order directly in digital.”

https://vimeo.com/98918184

Source: italiaoggi.it*Clx Europe is a company that supports brands, retailers and agencies in the creation,

management and distribution of media content on a global scale and in multi-channel

market.

Augmented Reality: Uniqlo & Holition

Features: In October 2012 Uniqlo,for the new flagship store opening in San

Francisco unveiled 'the virtual dressing room' using patent pending technology

from Holition. Holition developed the software power behind the Magic Mirror

technology and, working in partnership with Dai Nippon Printing Company,

created a seamless retail experience that allowed consumers to try on the full

range of colours for a variety of Uniqlo Fall/Winter jackets. Trying on clothing in

front of the Magic Mirror prompted a touchscreen that allowed the customer to

select other colours in the range which could be tried on. The Mirrors were also

fully connected to social media, allowing instantaneous sharing direct from the

Store. The Magic Mirror has also been deployed at the Shinjuku Takashimaya

store in Japan.www.holition.com/portfolio/uniqlo

Augmented Reality:

Ray Ban & Fitting Box

Features: Ray-Ban is using augmented reality to demo their products with the

Ray-Ban Virtual Mirror. The technology behind the Virtual Mirror, called FIT3D

Live, is made by a company called FittingBox, and according to them, they

want to be “the driving force behind this digital revolution which will

dramatically change the optical industry”. They’ve also found a way to track

your face without the need for an augmented reality tracking marker, so

existing reference points (eyes, nose, ears) are apparently enough to place and

move the sunglasses in real time.

The end result is a rather fluid experience that accurately replicates the

experience of trying on a pair of sunglasses, and it definitely validates the idea

that augmented reality could soon replace in-store visits as the way that we

evaluate many products.

www.ray-ban.com/usa/virtual-mirror

Augmented Reality: Zugera

Features: Zugara is an Augmented Reality company based in Los Angeles,

California. They create Augmented Reality software, Virtual Reality software

and Virtual Style Sense (VSS) Technology that gives retailers the power to now

track inventory interaction in-store. Developed with Custom Country, VSS allows

shoppers to digitally view different colors and styles of items in a display.

Company worked with big players from fashion industry such as Nordstorm and

Ted Baker.

www.zugara.com

Augmented Reality: FXGear

Features: FXGear is a South Korean company originally established as a

computer graphics software developer, then expanded into developing virtual

human technologies, mobile graphics engines and virtual reality technologies.

FXMirror is an augmented-reality fitting room solution that offers convenience to

shoppers and customer data to retailers. Shoppers can try on clothes virtually

without the hassle of getting in and out of clothes. Retailers can gather crucial

data about their customers' preferences and shopping behavior.

www.fxgear.net

Augmented Reality: Microsoft (Kinect)

Features: Kinect may have started as a revolutionary gaming device, but its

effects are being felt in industries from space exploration to healthcare. Kinect

can render a room, a person, and the movement of objects in 3D, allowing

people to interact naturally with a system. It’s also starting to have a profound

impact on the retail space, where stores are beginning to use Kinect as a

means to better reach their customers and enhance the retail experience.

When stores use large displays and screens to highlight their products, adding

Kinect and its user interface abilities is the next logical step to a static

information kiosk. Kinect takes a passive device and makes it active: it can

“wake up” and make promotional offers as the customer walks by. It can

display everything from makeup to clothing on the customer, who interacts with

Kinect’s camera. And it makes finding information as simple as speaking a

command or navigating the system’s interface.

www.youtube.com/watch?v=Mr71jrkzWq8

Augmented Reality: MemoMi

Features: MemoMi Labs Inc. provides the world’s first high-fidelity, true-vision

digital imaging software platform. Delivering an adaptive and controlled

camera perspective, MemoMi’s patented technology can be used in a wide

variety of technology applications, including ‘smart mirrors’ for retail stores.

Applicable to any combination of camera and screen, MemoMi’s platform

performs perspective correction from every angle and distance in real time,

delivering a distortion-free, realistic image with true eye-to-eye contact.

www.memorymirror.com

Augmented Reality: Fitnect

Features: Fitnect is a full customizable, powerful and easy to use

augmented reality 3D fitting room system. Their technology allows

shoppers to virtually try on various clothes and accessories, giving

the chance to preview products without trying them on physically.

www.fitnect.hu

Augmented Reality:

Toshiba & Kakimoto Arms

Features: Clients at one of Tokyo’s most famous hair and make-up

styling salons, Kakimoto Arms, can now get more than stylish color

and cuts from their favorite stylist—they can also see how they

look in recent fashions or coordinate a whole new look, thanks to

a virtual fitting system developed by Toshiba.

www.youtube.com/watch?v=abcqIZku784

Augmented Reality: Xoonla

Features: Milan-based company that offers the augmented reality solution for

retailers. The technology they use developed by FX Gear company and can be

demonstrated through appointment in the showroom in Milan area

www.xoonia.com/virtual-dressroom

Augmented Reality: ELSE

Features: ELSE Corp is an Italian B2B startup, designing & developing a new

technological SaaS platform for Virtual Retail and Cloud Manufacturing. For

theMicam fair and MIPEL they created a virtual corner in the shop, where it is

possible to try the new customer experience, based on tailor-made and

customized products through 3D foot scanning and virtual fitting.

www.else-corp.com

Brand Certification Systems Against

Counterfeit

Counterfeit Solutions

Product counterfeits have always existed in the industry of fashion and luxury and they always had their own

target market of buyers. This is only growing, as the world fights through the trauma of economic slowdown.

More than 37,000 websites, which were selling counterfeit goods, have been closed down in an effort by global

law enforcement (December 2015). Operating at the time of the Black Friday and Cyber Monday online

shopping extravaganzas, the effort was led by US Immigration and Customs Enforcement’s (ICE)’s Homeland

Security Investigations (HSI), which partnered with industry and law-enforcement agencies from 27 countries

across the world, including Europol and Interpol, to take action against the sites.

Together with product clones though, the category of payment cloning is also on a rise. Many of the backend

and frontend financial service providers are working hard to adapt and support the migration of card payments

from magnetic stripes to EMV chip and PIN based methods. ACI Universal Payments commissioned Forrester

Consulting to conduct a study on how retailers are managing fraud across channels, and they found that 65% of

retailers believe they lack the tools to effectively manage omni-channel fraud.

Currently, some of the brands are implementing the solutions internally to fight with the counterfeit products, but

at the same time, individual enterprises are launching special services and apps to help the customers check

authenticity of a product.

Case-Study: Moncler

Moncler is introducing a new technological tool

in its fight against fakes. Beginning with its

Spring-Summer 2016 collection, each of

Moncler’s products will be outfitted with a radio

frequency identification (RFID) chip to let

customers authenticate it, via use of an app.

The technology is the same that allows people

to pay for items with their phones. The chip will

also have a QR code that customers can scan

and an alphanumeric code they can check on

the code.moncler.com website.

Case-Study: Salvatore Ferragamo

Beginning with its Pre-fall 2014 collection, Salvatore

Ferragamo began embedding RFID chips into the

left soles of its women’s shoes to allow the company

to verify their authenticity. It has since added the

tags to products in other categories, including

women's bags and luggage and men's shoes and

small leather goods.

Case-Study: UGG

UGG is really struggling with the amount of its

counterfeit being produced. The brand has

taken legal action against 60,000 websites

selling counterfeit UGG products. A majority of

counterfeit websites are operated in China,

which protects the actual counterfeiters from

prosecution. But UGG has a separate tab on

the website about authenticity of the products

where customers can check if the third party

website they are planning to buy UGG from is

legit.

Case-Study: Certilogo

Certilogo is the brand authentication system

used by a growing network of top brands and

by almost 1 million consumers worldwide.

A different Certilogo Code is placed on each

product item and associated with supply chain

information. Consumers scan the code to check

the authenticity of the merchandise before or

after purchase and provide valuable

information on their profile, their location and

the online/offline store where the product was

found. The Certilogo platform then translates all

data gathered into comprehensive analytics on

counterfeiting, supply chain issues, parallel

markets and consumer profiles.

Case-Study: NetNames

NetNames offers a single point of contact for

management of internet domain names, in all

locations, globally, and protection for brands

across all online environments. Company's

services include brand protection, online

security, anti-piracy, domain acquisition, new

gTLDs and corporate domain name

management. NetNames offers wide list of

services for online brand protection: mobile

app protection, social media monitoring, online

marketplace monitoring, including the Anti-

Counterfeiting service (fully tailored online

detection and rapid removal of counterfeit and

grey market products).

Case-Study: Novagraaf

Novagraaf is an international patent and

trademark consultancy that advises clients on

Intellectual Property strategy and

management. Whether trademarks, patents,

domain names or designs, Novagraaf

specializes in the protection and global

management of Intellectual Property rights,

including identifying abuse and acting

decisively if and when infringements take place.

Novagraaf offers IP tools, which allow to monitor

URLs for suspicious activity, including trademark

infringement.

Case-Study: Sinfotech

Sinfotech started in 2012 in Italy, with the advent

and spread of NFC technology, to test and

develop new marketing solutions and business.

Sinfotech is able to provide innovative solutions,

using NFC technology, for different market

sectors, such as the Anti-Counterfeiting,

traceability, marketing, loyalty. Sinfotech is

available to the personalization and

development of new solutions and applications.

The Anti-Counterfeiting NFC is possible thanks to

the peculiarities of NFC tags to have a unique ID

to prevent forgery.

Case-Study: Spronxil

Sproxil uses mobile technology to combat

counterfeiting and increase brand equity with

innovative, consumer-focused product

protection and targeted marketing solutions. Its

award-winning Sproxil Defender™ technology

drives revenue and engages consumers at point

of sale through brand assurance, fraud

protection, and loyalty rewards.

Sproxil Defender™ is touted as the most-widely

used solution of its kind, deployed by several

large companies across ten industries and

protecting millions of consumers around the

world.

Case-Study: Brand Reporter

Brand Reporter is YPB’s technology platform

designed for the governments, brands &

consumers to identify, manage, track and

report counterfeit or divergent products within

supply chains or at points of sale. The

customized solutions are simple and easily

deployed applications available on all popular

smartphones.

Brand Reporter solution includes: QR codes,

Barcode scanning, online retail authentication,

consumer marketing, consumer engagement,

data gathering, loyalty & incentives, product

authentication and track & trace service.

Case-Study: MarkMonitor

MarkMonitor®, part of Thomson Reuters, provides advanced

technology and expertise that protects the revenues and reputations

of the world's foremost brands. MarkMonitor Brand Protection

safeguards a brand's revenue and reputation by combating the

growing threat of online brand abuse, including counterfeiting,

unauthorized channels, brand impersonation and stolen web traffic.

E- Commerce service

• Develop and evolve online brand protection strategies

• Expose and thwart web traffic interception schemes such as paid

search scams and cybersquatting

• Protect the brand’s traffic-driving power—and preserve reputation

and customer trust—by rooting out trademark and logo misuse

• Detect inappropriate channel and affiliate activity and take action

• Expose potential counterfeiters and bring their illicit activities to a

halt.

Case-Study: IPReye

IPReye provides two essential services for

trademark and brand enthusiasts – free

trademark and logo search with option to

register new trademarks and logos and a

sophisticated online tool to stop fakes. PReye

Global Ltd is a privately held expert company

focusing on trademark protection issues

globally.

To report trademark infringements and fake

products with smart phones, tablets and

portables, it is necessary to take a photo of

suspected fake product, add some crucial

information about the target and send it to the

company and IPReye will take care of the rest –

analyze the report, contact the brand owner,

manage the trademark infringement case with

the legal partners and keep informed the

reporter all the time how the process progresses.

Case-Study: uFaker

uFaker is a web, mobile and social media

platform for identifying, reporting and

combatting counterfeits. It provides trademark

owners a real-time system for tracking and

sharing counterfeit activity among its team of

lawyers, investigators, licensees and law

enforcement.

Users of the uFaker App can report counterfeits

by making a photo of the product and earn

valuable rewards. The moto of the company is

“Spot it, Report it, Earn Rewards!”

Case-Study: Brand Guard

Brand Guard pioneered a new kind of anti-

counterfeiting solution with patented mobile

based product verification service. Through the

use of proven technologies, Brand Guard

product authentication ensures maximum

protection against forgeries and counterfeits. A

combination of visible security features is used

to identify your branded products uniquely and

makes it possible for your client to authenticate

them quickly and reliably.

On the other hand, Brand Guard provides end

customer the ability to report the name and

location of retailers who are selling counterfeit

merchandise. Additionally, system can semi

automatically generate legal alert document

and post them to the suspicious retailers.

Case-Study: Authenticateit Pty Ltd.

Authenticateit Pty Ltd is an Australian start up companycreated by a team of experts in Intellectual property,

trademark protection, retail, media broadcasting, e-commerce, logistics and IT.

Alarmed by the growing sophistication of counterfeiters inlegitimate retail situations, coupled with the burgeoningproblems in online retail, the team developedAuthenticateit to provide consumers and brands greaterprotection from the threat of illegal and unauthorizedimports. The team has extensive experience working inEastern Europe, Asia, North America and Australasia andadded countless hours to research to develop theAuthenticateit platform. The result is a complete,effectively foolproof system that is simple to use, but offersa powerful disincentive for the counterfeiters around theglobe.

Study carried out exclusively for Intesa Sanpaolo Innovation Center

All rights reserved.

The partial or full reproduction, use, distribution, publication, transmission, amendment

or sale of all or part of these document by any means and for any reason whatsoever is

forbidden.

For any request, please contact osservatorio@intesasanpaolo.com