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Articles

The Future Of Retailing

Shopping onlineFor all those busy people who have better things to do than fight the traffic, find a parking space, try on clothes, and wait in line to check out, the future of retailing will be spectacular. As featured recently in USA Today, we are on the precipice of breakthroughs in technology and apps that will revolutionize the shopping experience – both online and in stores. It is especially crucial that Canadian retailers embrace these tools if they are to successfully compete with the barrage of American and European retailers that are opening their doors across the country and shipping for free to Canadians. Moreover, with relatively little legacy e-tailing investment in Canada, retailers could leapfrog the competition by taking advantage of these advances. But they better be quick as they are already behind many in the UK, Europe, Australia, and the U.S.

The technology already exists in an increasing number of U.S. shopping centres. A 10-second body scan will tell you the store where you will find the perfectly sized apparel item you are looking for. Me-Ality has installed machines in a host of shopping centres (not yet in Canada) that operate much like the new airport scanners – but without the see-through technology – and are free to the customer. You step into the circular booth, fully dressed, and wait as the scanner takes about 200,000 measurements in 360° using low-power radio waves. The numbers are translated into personalized shopping guides for your body size and shape. The kiosk then spits out a list based on the style, size, or brand you are interested in. Me-Ality claims to "match your exact measurements to clothes that will best fit and flatter your body shape, making it easy to shop." This service is for both men and women. The retailer pays a fee each time they show up in a personalized recommendations list.

Significant Support

The Me-Ality scanners were developed by Unique Solutions Design Ltd., a Canadian company in Dartmouth, NS. The firm also provides 'Size Recommendation Software,' an online software solution that matches customers' measurements with items' size specifications. The company, in its earlier days, received significant support from the province through Nova Scotia Business Inc.

These scanners have been installed in malls across the U.S. and hundreds of stores have signed up. New locations and brands are popping up every day. Current brands include shopping centre stalwarts such as Banana Republic, BCBG MAX AZRIA, Eddie Bauer, Gap, Ann Taylor Adidas, Brooks Brothers, J. Crew, Lacoste, Nike, and Talbots – to name a few. And the best part is that, once you've been scanned, you can use the service for either in-store or online shopping, taking the guesswork out of choosing sizes.

Can't find a scanner near you? A Berlin-based startup, UPcload, has launched a new web-based scanning service. Winning Germany's startup of the year award in 2011, UPcload measures you dressed in "tight dark clothing standing in front of a light wall" via your webcam. It takes three minutes and four poses (holding their free calibrated CD) to get your results. According to their website, Bloomberg Businessweek found UPcload "measurements were within 1.5 cm of a professional tailor's."

This service is free to the consumer, providing you with a detailed list of measurements to be used when shopping online and for buying custom-made clothes. This allows for truly 'digital tailoring.' You can "share your UProfile with others to get gifts that fit." Right now, the number of retailers that are directly linked to UPcload is limited, but growing. Those that have signed up have an UPcload widget on product pages. Click the widget, enter your password and, presto, the appropriate size is chosen.

These are still early days for this technology and the competition is growing. Fits.me works with a set of measurements that you provide. It uses such diverse fields as apparel design, anthropometrics, IT, robotics, and engineering to create a robot, shaped just like you, on which to try every garment, so you can see how it would look. This is the 'virtual fitting room.' The robot feature does slow the process, making it costlier for the retailer.

Realistic Avatar

Intel is going even further in creating the digital fitting room with the development of its 'Magic Mirror.' It uses parametric technology to simulate your body type and how particular clothes will fit based on your body measurements. The Magic Mirror provides a realistic avatar of you to see how you look in the latest fashions. It puts clothes on you without you doing a thing. These apps can be used in many ways. For example, they could be used in fitness clubs to demonstrate equipment or to show you how you would look 10 pounds thinner. In three to five years, this technology could be available at home on TV screens. Ortho Baltic has made a 3-D foot scanner that works in just 27 seconds, allowing for the perfect shoe or orthotics construction.

Clothing makers, armed with body data collected from real shoppers, could sew better fitting garments and more accurately forecast what sizes to stock. Retailers would save on labour needed to fold and re-hang rejected garments. Some are already seeing its potential as a marketing tool. Returns and refunds are painful and expensive for both the merchant and consumer. An estimated 20 per cent of apparel bought online is sent back. Sizing software in development for home motion-sensing devices, like the popular Microsoft Kinect, will soon allow consumers to scan themselves in their living rooms before clicking 'purchase' on their computer screens. It is already available for commercial licence to allow companies to build Kinect-based solutions.

Many retailers are already combining digital capabilities with the in-store experience. Macy's, for example, uses the Magic Fitting Room in its midtown Manhattan store, a combination webcam-tablet mirror. You stand in front of the mirror, it takes your picture, and then you virtually try on all the clothes Macy's has downloaded into their system. Most shoppers loved it; the coolest thing was that the Magic Mirror paired clothing with accessories to create virtual outfits – all for sale at Macy's – which could be downloaded onto Facebook pages to share with your friends.

JC Penney is downloading all of its products onto an interactive big screen in some of its stores. Google's augmented reality (AR) glasses (Project Glass) – the interactive smartphone we will wear – is still a few years away, but AR apps are already available for smartphones and tablets that will virtually decorate your home, find local restaurants and movie theatres and pinpoint your position on a golf course.

The bottom line is much work remains, but the opportunities and challenges for all interfaces with consumers are enormous. The confluence of smartphones, 3-D printers, parametric technology, and so many other applications of digital technology will change retailing dramatically, eliminating traditional fitting rooms, check-out lines and expensive inventory and returns. This will be a win-win situation for both business and the consumer. Ignore these trends at your peril. This is one important way to watch productivity soar.

Dr. Sherry Cooper is executive vice-president and chief economist, BMO Financial Group.

Reprinted by permission of BMO Financial Group.