California Apparel News

Buying clothing over the Internet is becoming more of a fulfilling experience and less of a pain for consumers, thanks to emerging rich-media technology available to e-commerce providers. That’s helping to propel online sales to record levels.

Online sales hit $34 billion during the fourth quarter of 2006, the highest level in four years. It is expected to hit $233 billion in North America this year, according to Cambridge, Mass.–based think tank Forrester Research.

More e-commerce providers are taking advantage of technology to help shoppers and themselves capitalize on the online shopping boom. This technology includes 3-D virtual models, zoom-and-spin tools, color swatching, video, customization and a range of other applications to make their Web sites more user-friendly and interactive.

“The thing is that companies are spending millions on marketing to get consumers to their sites, and once they get there, they need to convert their visits to sales,” said Geoff Galat, vice president of marketing for San Francisco–based TeaLeaf Technologies, which provides customer-experience management software to e-commerce companies.

Galat said that only about 5 percent of visitors to e-commerce sites actually buy anything, so capturing their attention is vital.

Technology is helping to do that, both on the front and back ends of business.

Montreal-based My Virtual Model, one of the first on the scene with its 3-D mannequins, has revamped with a new concept called “Brand Me,” which allows consumers to create their own virtual likenesses to carry with them on a publisher’s Web site. Users can also upload their virtual model onto an iPod or handheld and import and export it across a number of applications, including the futuristic virtual world Second Life, where retailers such as American Apparel have set up shop. The Brand Me solution will launch this summer.

MVM is now used across various lifestyle applications such as home deacute;cor, health and diet, toys and games as well as apparel and apparel production, so it made sense, said President and founder Louise Guay.

So instead of using them on MVM subscriber sites such as H&M, Sears, Lands’ End and others, consumers can now bring their virtual models to lifestyle sites such as iVillage, which sells across product categories.

Using Brand Me, consumers will be able to create virtual models that go beyond matching body types. They will be able to import facial images to make their models even more lifelike.

“It will become a standard. People will eventually be expected to be able to travel with their virtual assets. Simulation is powerful,” Guay said.

One of the drivers of the concept, said Guay, is the “try before you buy” philosophy. It applies across the board in retailing. Using MVM in the home market, consumers can use the technology to decorate bedrooms and kitchens, switching out colors, bedding and furniture at the click of a mouse. Visualizing the finished concept can save big bucks, she added.

The concept is also being used in production. After acquiring AGE Technologies last year, MVM integrated the company’s Clicdesign tools, which allow designers to turn Adobe Photoshop and Illustrator programs into CAD-like programs. Adidas, for example, is using it to create virtual storyboards on the Web, eliminating a lot of time in the process.

Other companies, including surfwear maker O’Neill, have provided similar technologies on their Web sites that allow customers to build their own wet suits or boardshorts. Aliso Viejo, Calif.–based 2Advanced Studios Inc.—which last year helped the surfwear company get nominated for a “Webby” award for best functionality—developed the customization tool.

For O’Neill, the technology is intended to whet consumers’ appetites and drive sales to retailers, said Elijah Shepard, director of business development.

MVM and others work in tandem with providers such as San Francisco–based Scene7, which provides most of the zoom and color-swatching tools on the Web. Clients include Macy’s, QVC, Anthropologie, Bloomingdale’s, Levi Strauss, Puma and others.

Those tools have basically become the baseline standard, said Sheila Dahlgren, senior vice president of marketing for Scene7.

“You have to have them to be competitive. Shoppers love to see details. If they can’t see a sweater or shirt in red or whatever color they want, they won’t buy it,” said Dahlgren.

The spin-and-zoom features have been standard for a couple of years. What have changed are the platforms. Rather than create images per each style on a home page with thumbnail images, an enlarged view has now moved into the browser so one master color swatch or pattern can be carried across an entire platform. This saves two and three times off of production costs, explained Dahlgren.

E-commerce providers are also using video and customization tools such as “product configurators” aimed at the custom market. A corporate client can upload its company logo and visualize it on a polo shirt in various colors. Sports fans can see how their names look on the back of a Denver Broncos jersey.

It’s an area gaining interest in the industry, as evidenced by O’Neill’s program and others such as Nike Inc.’s Nike I.D. custom-shoe program.

Technology has over the past couple of years contributed to increasing the conversion rates for e-tailers—that is, getting visitors to buy something. Whereas online shopping sites used to be a loss leader, they are now very profitable.

“When combined with e-catalogs and international business, it can account for up to 40 percent of a company’s business,” said Dahlgren.

Third-party e-commerce providers such as Secaucus, N.J.–based eFashionSolutions have put their own spin on Scene7 tools to develop merchandising vehicles such as the “12 Ways to Wear a Cozy” feature for DKNY. The company used Scene7’s e-catalog tools.

“It’s a very visual way of guiding and educating consumers,” said eFashion’s Justin Schaldone. “They can flip through it and see the many different ways to wear a garment. It provokes thought.”

Added Eric Allen of One-Stop Internet, a Los Angeles–based e-commerce provider: “We’ve seen strong improvements in conversion rates by implementing customer-preferred preferences such as shop-by-color, size, fit, style and price. Ultimately this accomplishes two goals: for the consumer, a seamless shopping experience by giving them the ability to shop based on their own preferences and for the retailer by increasing conversion rates and reducing page-abandonment rates.”

One-Stop develops e-commerce sites for 7 For All Mankind, Trina Turk, Chip & Pepper and True Religion, among others.

Allen said technology is also helping improve back-office efficiency. Alternative payment options such as PayPal (www.paypal.com) and Bill Me Later (www.billmelater.com) have delivered a 6 percent increase in revenue over average order sizes. Affiliate programs show the most promise for brands and retailers, as the average lift in revenue is around 10 percent for apparel sites.

“Third-party dedicated e-mail campaigns have also shown huge returns for our clients, providing a two- to three-day spike in revenue anywhere from five to 10 times over the normal average daily revenue,” Allen said.

Allen said the company is also looking at new technologies such as AJAX, which offers one-page checkouts and the ability to mouse over products that trigger additional product details without reloading pages.

“Because it’s a much more complex development environment and integrating AJAX into Web analytics programs is still an issue, there’s been a relatively slow adoption rate for e-commerce sites,” he said.

Another company, Tealeaf, which develops analytical software, just launched cxView and a new version of its CX platform to help e-commerce providers figure out why consumers are so fleeting.

The CX products track key performance indicators such as conversion rates. “It’s like TiVo for the Web,” explained Dawes.

How important is it to track exceptions? Dawes cited a Harris poll that revealed 40 percent of online shippers switch to a competitor’s site if they run into any problem that takes three seconds or longer. “You may not know you’re bleeding, and in this business, time is critical.”

Fixing those problems can avoid similar problems in the future.