Team 44: Aysenaz Cimsit (633875); Marianna Tabaczyk (647650); Sasha Mballa Ambani Ledji (777624); Sem Gelderblom (647994)
Online shopping marketplaces are responsible for the unsustainable practices of fashion consumption that contribute to the deterioration of environmental conditions globally. As a fashion marketplace, Zalando has the opportunity to reduce over consumption by leveraging a virtual try-on (VTO) tool to reduce item returns. Zalando itself indicates that about 50% of ordered items are returned (Zalando, 2022). Flexible return policies also encourage buyers to shop more, and accelerate supply chain activities that worsen environmental conditions (Velazquez & Chankov, 2019). It can thus be explored how Zalando can be positioned as a leader in the sustainable consumption of fashion. The VTO tool, Digital Stylist, creates a personalised experience for buyers to visualise digitally how their chosen items would look on them before purchase. The gap of doubt is therefore minimised, and subsequently return rates are reduced and customer satisfaction is improved. The pilot project with Zalando aims to promote an IT-driven change that implements AI and machine learning to transform the impersonal buying experience of online shoppers. In effect, Zalando management gained insights on buying behaviour and customer satisfaction to improve their competitiveness in the market.
Current VTO tools are generic and use an avatar to model items on a body. The Digital Stylist prototype initially prompts users to upload a full body image, their body measurements, and their selected items. Using language models and generative models, the tool produces a render of the user wearing their selected items. An AI assistant additionally serves as an online personal stylist to support the interactivity of the tool. Two versions of the tool are created to serve audiences with a significant difference in digital literacy and shopping habits. The AR-ready version gives customers the ability to view how clothing behaves and fits from multiple angles. The light version is optimised for speed by providing lower quality outfit previews directly on uploaded 2D photos of the individual. At the pilot testing phase of the launch, the prototype will be limited in functionality and capacity to allow for multiple testing iterations. The next phase of the product launch focuses on the tool at scale, which requires an in-house development of the tool to increase its capacity and processing power. The two phases are guided by the following key metrics; an 8% decrease in return rates, 15% increase in conversion rates, and a 10 point increase in Zalando’s Net Promoter Score. The metrics not only evaluate the economic effect, but also position Zalando as a leader for responsible consumption and production in the fashion industry.
The success of the launch requires management to effectively create alignment between teams to manage the potential areas of risk; security of personal data, public backlash on image alteration, and the complexity of the tool in comparison to competitors. Management must require research to be conducted on the potential risks, and for alignment to exist between the required elements of the product and customer needs.
The Digital stylist will not only allow Zalando to strengthen their competitive position through innovation, it will also help the world as a whole by contributing to lowering world wide pollution on a planet that is in desperate need of help.
References:
Velazquez, R., & Chankov, S. M. (2019, December 1). Environmental Impact of Last Mile Deliveries and Returns in Fashion E-Commerce: A Cross-Case Analysis of Six Retailers. IEEE Xplore. https://doi.org/10.1109/IEEM44572.2019.8978705
Zalando. (2022). Returns at Zalando. Zalando Corporate Website. https://corporate.zalando.com/en/about-us/what-we-do/returns-zalando
