Virtual Try-On Technology: What You Should Know

What’s your personal color?

You’ve probably been asked this question a lot lately. Or maybe you’ve even asked yourself at some point.

There’s a good reason why color analysis has been receiving so much hype these days. People want to make sure their next wardrobe addition perfectly matches their seasonal color palette.

While consulting a color analysis expert can cost a few hundred dollars, many are turning to free, AI-powered tools like TikTok filters and apps to figure it out on their own.

We’re not here to debate whether in-person color analysis is worth the money or not. Instead, let’s explore how business owners can make use of this trend to improve and personalize their customers’ online shopping experience.

How? Throughvirtual try-ons (VTO).

As the name suggests, this digital solution allows shoppers to try on accessories, makeup, and clothing virtually without visiting the physical store. Want to know if a dress flatters your body type? Or if a lipstick shade complements your skin tone? All it takes is a mobile device.

In this article, we’ll walk you through everything you need to know about using VTO technology.

Here’s what we’ll cover:

• E-commerce and the cost of returns
• What is VTO and how it works
• The cost of adopting VTO
• Biometric data privacy concerns
• A step-by-step guide to using VTO tools

The Return Dilemma: A Billion-Dollar Issue

The rise of VTO technology in e-commerce didn’t happen by chance. It emerged in response to the surge in online shopping during the COVID-19 pandemic and the growing need to address high return rates.

E-commerce sales are projected to reach $1.9 trillion by 2029. Despite the promising positive outlook, business owners continue to face a significant number of returns, especially in fashion retail.

A 2023 report by the National Retail Federation revealed that merchandise returns reached $743 billion last year, with online purchases contributing significantly at $247 billion.

What Returns Mean for Shoppers

For some customers, the return process can be a frustrating and time-consuming experience. Aside from the disappointment of receiving an item that doesn’t meet expectations, returning a product often involves multiple steps: submitting a request, waiting for approval, and physically dropping off the item at a designated location.

Delays, miscommunications, and confusing policies only add to the hassle, leaving shoppers dissatisfied and less likely to make future purchases.

The Price of Returns for Retailers

The cost of processing a return can reach up to 65% of the original selling price, posing a significant challenge for businesses. Items bought online are significantly more likely to be returned compared to those purchased in traditional brick-and-mortar stores. Additionally, many customers say they’re more likely to shop again with a retailer if the return process is simple and if free return shipping is offered.

These challenges (i.e., high return costs and growing customer expectations) can be addressed with VTO technology. VTO helps customers visualize how items will fit or look, minimizing the likelihood of returns caused by dissatisfaction with appearance or fit.

As Alexander Berend, CEO of the AI-imaging software company Anthropics Technology, said:

"There's a few different reasons why people return clothes... People try it on and then they just don't like how it looks on them, or it could be that it doesn't fit, or it could be that you don't like the feel of the clothes. Virtual try-on really goes to those first two in a big way."

Understanding VTO: An Overview

Also known as ‘virtual fitting’ or ‘digital try-on,’ VTO has been adopted in the e-commerce landscape for quite some time now, especially during the COVID-19 pandemic. It’s widely used across industries like cosmetics, jewelry, apparel, and footwear to provide customers with a more interactive shopping experience.

This technology enables customers to visualize products from the brand’s catalog on themselves using a smartphone or any camera-equipped device. By overlaying digital versions of items like clothing or accessories onto a real-time image of the user, customers can move around and see if the product looks good on them from different angles.

Some tools even allow users to upload photos or videos, using these as models to virtually ‘try on’ items like sunglasses, earrings, or outfits.

How VTO Technology Works

VTO brings together a powerful mix of machine learning, artificial intelligence (AI), augmented reality (AR), and 3D modeling and animation. Here’s how it works:

• The user takes or uploads a photo or video of themselves.
• Computer vision analyzes the image to create a detailed digital model, identifying key features like body measurements and facial landmarks.
• Virtual clothing or accessories are then adjusted to fit the digital model, tailored to size, style, and user preferences.
• Finally, the user sees a realistic image or video of how the product would look on them.

Exploring VTO: Price, Effectiveness, and More

VTO’s upfront costs cover software development, 3D scanning equipment, annual cloud storage, installation on the e-commerce site, and product photography. Overall, the initial investment could range from $95,000 to $470,000.

The good news is, retailers don’t have to build from scratch. There are many VTO software tools that can be integrated seamlessly with retailers’ e-commerce platforms, including:

• WANNA: It delivers cutting-edge 3D and AR technologies for fashion items such as bags, footwear, jewelry, and clothing. WANNA has been used by FARFECTCH, Dolce & Gabbana, Valentino, and Balenciaga.

“AR and Virtual Try-On is a transformational opportunity for the luxury sector, bridging the gap between physical and digital, evolving e-commerce from 2D flat into 3D immersive and personalized. At FARFETCH, we have seen great results across the shopping funnel with outstanding feature adoption, product engagement, and significantly higher sales for Virtual Try-On-enabled products.”

- Filipa Neto, Head of Open Innovation, FARFETCH

• Zyler: It offers a digital dressing room tool that makes browsing more fun. Zyler also gives size recommendations and personalized emails for the retailers. It’s trusted by brands like Moss, John Lewis, M&S, and Larusmiani.

  
  

• PICTOFit: An end-to-end platform for VTO, this solution allows users to make avatars and to try on garments that fit their body type and style. It also offers virtual mix-and-match, size visualization, and layered outfit styling.

• Perfect Corp.: This tool goes beyond VTO with AI analysis tools, such as a skin scanner for skincare recommendations and aesthetic simulation to assist medical clinics in presenting treatments to their patients. It supports makeup, eyewear, accessories, and more.

The starting price for these VTO software ranges from around $100 to $1,000, making them fairly accessible. Also, when it comes to VTO, the accuracy depends on the underlying technology, so make sure you choose the software that meets your e-commerce and financial requirements.

Is VTO really effective?

A recent study shows that VTO technology increases average sales per customer while reducing return rates by over 27%. It also keeps customers engaged longer, proving its value in improving the online shopping experience.

“If a company claims using their product will produce X number of shades of improvement, what does that mean to a consumer? The consumer is left wondering what each shade of whitening would look like... Our AR-Powered Teeth Whitening Virtual Experience, based on our extensive research and clinical results, shows consumers a realistic representation of what our products can do for their own teeth. This is what consumers want and need.”

-Gary Binstock, Director of Technology, Strategic Innovation & Technology Alliances of Colgate-Palmolive

What do customers say?

AR is becoming a must-have for businesses as younger generations embrace it in their shopping experiences. A 2022 Dynata survey revealed that most Gen-Z and Millennial online shoppers want to use AR to try on makeup or experiment with new hair colors, and are interested in virtually trying on clothes, shoes, and accessories.

This shows that Millennials and Gen-Z, the largest spending demographic, are driving the demand for AR-powered shopping experiences.

The Hidden Risks of VTO: Biometric Privacy and Legal Compliance

VTO tools collect biometric identifiers such as eye color, retina, and facial geometry. These unique physical features can be stolen and used by hackers to impersonate users and gain unauthorized access to devices and personal accounts.

The Biometric Information Privacy Act (BIPA) has led to legal challenges for companies using VTO technology. Estee Lauder, Louis Vuitton, and Christian Dior were among those that got embroiled in the biometric privacy issue by their customers.

Some retailers argue that BIPA doesn’t apply to them because they don’t store biometric data. However, VTO uses AI to analyze customer preferences and biometric profiles to suggest products. This process typically involves collecting and temporarily storing data, which may trigger compliance requirements under BIPA and other privacy laws.

Under BIPA, companies must take the following steps to avoid legal pitfalls:

1. Inform individuals in writing that they’re collecting biometric data.
2. State the purpose of collection and the retention period.
3. Get the consumer’s written consent before collecting the data.

So, what steps should businesses take to protect their customers’ information and mitigate risks? Purdue Global Law School cited the following tips:

• Clearly disclose any biometric data collection in your terms and conditions.

• If you need to store biometric information, make sure your policies and practices comply with BIPA and other privacy laws.

• Consider using popup notifications or ‘clickwrap’ agreementsthat require customers to explicitly agree before using VTO tools.
  

  
  

VTO Made Simple: A Quick Guide to Getting Started

Now that we’ve covered the basics of VTO, the costs, and legal considerations, here’s a straightforward guide on how to adopt this technology.

Step 1: Know Your Goals

Start by identifying why you want to implement VTO. Is it to reduce return rates, increase customer confidence, or improve conversion rates? Take a look at your current challenges, such as high return rates or low customer engagement, and consider conducting a quick survey to see whether your customers are interested in using try-on tools during their shopping experience.

Step 2: Choose the Right VTO Solution

Again, you don’t need to develop your own VTO system, as it requires a higher upfront cost. Research VTO software options and choose what aligns with your business needs. What AR functions do you need? How much can you allot for this technology? Will it be easy to integrate with your current platform? Consider all these factors before choosing your solution.

Step 3: Update Terms and Conditions / Ensure Legal Compliance

Inform customers why their data is collected, how it will be used, and how long it will be retained. Obtain consent from customers before collecting biometric information.

Step 4: Prepare Your Inventory

High-quality images or 3D models of your products are essential for VTO functionality. A well-organized inventory system will ensure a smooth setup process.

Step 5: Test Your VTO Technology

Work closely with developers to incorporate the VTO software into your e-commerce platform. Test the user interface yourself. Is it intuitive and easy to use? Does it provide a realistic and accurate representation of products? Are the sizing and alignment of overlays accurate when applied to images and videos?

Step 6: Promote Your VTO Feature

Once your VTO is ready, let your customers know! Launch a marketing campaign to showcase the benefits of your new tool, such as a personalized shopping experience. Highlight the feature in your emails, social media posts, and website banners. Also, you could ask the customers for feedback or reviews about their experience with the technology.

Step 7: Monitor Performance and Feedback

Take a look at your performance to evaluate the impact of VTO on your business. Use analytics to measure key indicators such as changes in return rates, increase in sales and customer satisfaction, and the time spent on your platform using the VTO tool.

Compare data before and after rolling out VTO to determine if it’s meeting your primary goals. Don’t forget to collect ongoing customer feedback to identify areas for improvement.

Making the Most of VTO with Your Inventory

VTO tools provide an immersive and personalized shopping experience for consumers. By simply uploading a photo or video, customers can virtually try on clothes, accessories, eyewear, and even footwear—all without stepping into a physical store. Powered by a combination of AR, AI, and 3D modeling, VTO technology has proven to reduce return rates and improve purchase decisions.

However, like any technology, VTO comes with challenges, particularly around biometric data privacy. To address this, make sure to obtain clear consent from shoppers and inform them about how long their data will be retained (if applicable). These steps can help you avoid potential legal issues and build trust with your customers.

To maximize the effectiveness of VTO, a good inventory management solution is essential. With BoxHero, you can organize and track your stock in real-time to ensure accurate availability for your VTO system.

Try BoxHero today and take your VTO-equipped business to the next level!