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Cisco StyleMe Virtual Fashion Mirror

Engagement Overview Cisco IBSG © 2011 Cisco and/or its affiliates. All rights reserved. Page 2 Cisco IBSG’s market research and consumer testing show that Cisco ...

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Cisco Internet Business Solutions G roup (IBSG ) Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffiliates. All rights reserved. 12/11 Engagement Overview Cisco StyleMe Virtual Fashion Mirror How New Consumer Behaviors Are Enabling Retailers To Revitalize Their Stores by Combining the Virtual and Physical Worlds Written by Lisa Fret well Solution Developed by Lisa Fretwell and Clive Grinyer Overview As e-commerce matures and people become more comfortable shop p ing with their mobile devices, retailers are searching for new ways to revitalize their stores and reposition them as the strateg ic assets they should b e. The Cisco Internet Business Solutions Group (IBSG) believes mashops solutions that bring together the virtual and p hy sical world s in the stor e environment will be instrumental in helping retailers lead this chang e. Following the successful announcement of the mashop p ing concep t at the 2011 National Retail Federation (NRF) Annual Convention & Expo, Cisco IBSG has continued working with partners and customers to create a variety of new mashop solutions in the a r ea s of a d ver tising , fa shion, and home design. These solutions combine augmented reality with the latest networking technolog ies, as well as both online and dig ital content, to create immersive and rewarding in-store experiences that build customer loy alty and incr ea se sa les. One of the most promising new concepts is Cisco StyleMeTM (see Figure 1), which gives customers a fun and inter a ctive wa y to try on clothing and accessories virtually . Cisco StyleMe consists of a life-sized mirror that overlay s the customer s imag e with pictures of clothing they select using g esture- and touch-based interfaces. It enables shop p ers to q uickly create outfits by mixing and matching a wid e rang e of g arments from the retailer s in-store and online inventor y . Cisco StyleMe also ad d s value b y p rovid ing customers with exp ert fashion ad vice and allowing them to receive feed b ack about their choices throug h social media and messag ing. As online apparel sales continue to g row, retailers should take the op p ortunity to reinforce and integ r a te their store and web channels to avoid cannib aliz ation. Forrester Research predicts online fashion retail will g row at a compound annual growth rate (CAGR) of 10 percent versus just 3 p ercent for in-store In the United Kingdom, 35 p ercent of shop p ers b uy ap p arel By combining the virtual and physical worlds, Cisco StyleMe allows retailers to use their stores to capture and even enhance online sales. Cisco IBSG s initial work also shows that mashop concepts such as Cisco StyleMe can drive cross-channel sales, increase conversion rates, and grow wallet share. Engagement Overview Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffi l i a tes. Al l ri ghts reserved. Page 2 Cisco IBSG s market research and consumer testing show that Cisco Sty leMe is a hit with men and women of all ages. Two consumer groups were especially enthusiastic ab out the virtual shop p ing experience women over 50 years of ag e and y oung er women in their 20s. During testing , it became clear that the b enefits of easily try ing on new outfits and g etting exp ert ad vice far outweig hed any ap p rehension the older group had ab out the technolog y . For younger women, tests showed that Cisco StyleMe made the shop p ing exp erience both fun and social. Figure 1. Cisco StyleMe Provides a Fun and Immersive Mashop Experience for Customers. For retailers, Cisco StyleMe has the p otential to: Maximize sales b y giving customers access to an extend ed rang e of products Increase purchases b y offering customers advice and recommendations about items that g o with their selected outfits Boost revenues from consumers that sp end a greater amount of money when they use more than one channel to shop Enable better m erchandising and range decisions throug h insig hts gained from customer choices Source: Cisco IBSG, 2011 Engagement Overview Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffi l i a tes. Al l ri ghts reserved. Page 3 Experiencing Cisco StyleMe Cisco StyleMe allows shoppers to quickly browse a wide range of clothing and accessories, build and try on outfits virtually, and purchase the items they want on the spot. To begin the Cisco StyleMe experience, shop p ers simp ly walk up to the life-siz ed screen. Once the system captures their imag e, customers can use gestures and touch to search the retailer s complete inventor y, includ ing b oth in-store and online items. Based on information provided by the retailer, shoppers can search for clothing by brand name, garment type (b louse, d ress, etc.), price, color, size, and availability. As d esired items appear, customers select and save the clothing to a d ig ital wardrobe where they can view further details, includ ing recommendations or g o withs, accessories, and the same items in different colors. Shoppers can try on individ ua l garments or entire outfits virtually , as well as take a p icture to keep for themselves or share with others. These p hotos can be stored in their p ersonal and secure d ig ital ward rob e, where the imag es can b e accessed at any time. The desired items can be purchased in the stor e or online. If customers want to think ab out their p urchases, they can send a shopping list and p ictures to themselves via email or SMS. Figure 2. A Cisco Cius Tablet Shows Dresses in Different Colors. While the customer is interacting with the Cisco StyleMe virtual mirror, store associates can use a tablet computer to control the screen, review the customer s d ig ital ward rob e and p ictures, check whether items are in stock, and have selected g arments broug ht to the dressing room or checkout stand . Associates can also help customers place online orders for home or store delivery, enter ship p ing information, and manage customer infor ma tion (see Fig ure 2). Source: Cisco IBSG, 2011 Engagement Overview Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffi l i a tes. Al l ri ghts reserved. Page 4 Designing the Experience To create such a fun, immer sive, and interactive experience, Cisco IBSG utilized a design methodolog y that relies heavily on customer testing and reviews. The design team held several customer workshops to determine which features and cap ab ilities ad d ed the most value. In addition, customer feedback was instrumental in desig ning the physical attributes of Cisco StyleMe. Once the specific features and overall d esig n were agreed upon, Cisco IBSG created a customer experience architecture that detailed each step of the Cisco StyleMe experience from the customer s point of view. After considering several options, the design team settled on a screen lay out with five main sections for entering information, b uild ing outfits, storing items in a digital wardrobe, trying on outfits, and making purchases (see Fig ure 3). This a llowed a la r g e enoug h area for customers to see themselves in the virtual mirror while leaving adequate room on the screen for functional icons. The user interface was also designed so that customers could build and try on an outfit using a maximum of only three g estures. Figure 3. Icons on the Cisco StyleMe Mirror Allow Customers To Control Their Overall Experience. From a physical standpoint, Cisco IBSG designed the Cisco Sty leMe structure, store backgrounds, fixtures, and lighting to create a simp le and comfortab le user exp erience. In addition, it was important to balance the need for customer privacy and comfort with the desire of retailers to attract shop p ers to Cisco Sty leMe. Cisco IBSG accomp lished this b y using a variety of op aq ue materia ls to b uild the Cisco Sty leMe p ilot. Cisco IBSG s work was rewarded, as test customers d escrib ed the exp erience as fun, easy to use, and very simple. Source: Cisco IBSG, 2011 Engagement Overview Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffi l i a tes. Al l ri ghts reserved. Page 5 Enabling Technologies Behind the physical exterior, Cisco StyleMe is made up of several components and enabling technolog ies that work together seamlessly to deliver the overall customer experience. The core solution includ es a life-siz ed screen to d isp lay the video output, a PrimeSense camera to capture images and gestures, and an artificial intelligence eng ine that combines imag e analytics, recognition software, and aug mented-reality cap ab ilities. The main Cisco StyleMe unit is sup p orted b y a Cisco Cius tablet that allows store associates to manag e the unit as well as guide customers to ensure they have a great experience. From a process perspective, retailers need to prepare images of clothing items for use with Cisco StyleMe so that they can be overlaid on the customer s imag e. Cisco IBSG b elieves this process is best handled centrally. With regard to p ayment networks, Cisco StyleMe is designed to sup p ort both in-store and online sy stems. This allows retailers to choose the payment method that best suits their b usiness and merchandising ob jectives. For example, a retailer could set up Cisco StyleMe so customers can place their orders throug h store associates armed with tablet computers connected to the in-store sy stem, or allow customers to make p urchases on their own mob ile devices via Q R codes or after receiving an email message with a customer shopping list. Retailer Feedback Working with the Cisco sales team, Cisco IBSG tested Cisco StyleMe with eight retailers in the United Kingdom that rep resented a wide rang e of fashion exp eriences. While all of the merchants saw the p otential of Cisco Sty leMe, midmarket retailers were most interested in the mashop because they believed it offered another touchp oint to reach their customers and differentiate the exp erience they offer. These retailers also felt the exp erience itself could expand sales by encouraging customer s to b uy mor e and incr ea se conversions from peer recommendations. Based on the initial feed b ack, Cisco IBSG is now working with three U . retailers to launch Cisco Sty leMe p ilots in their stores. Cisco IBSG is also p resenting the mashop to several retailers in the United States. Customer Feedback Cisco StyleMe is d esig ned for p eop le who like the experience of shopping in stores. While Cisco IBSG s testing showed tha t Cisco Sty leMe was a hit with men and women of all ag es, it was particularly liked by two customer segments women over 50 years of age and younger women in their 20s. Older Women Women over 50 are less willing than other ag e g roup s to try on clothes in a dressing room. For this g roup , Cisco StyleMe made finding and try ing on clothes simp le and easy while still allowing them to enjoy the full in-store shop p ing exp erience. They felt Cisco StyleMe enab led them to g et a sense of what worked and what didn t without the time-consuming and tiring process of removing and putting on clothes. These women also saw the mashop as a great way to assemble a sp ecial outfit for an upcoming event such as a wed d ing or anniversary . Finally, they liked the flexibility of buying their clothing in the store or online. Engagement Overview Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffi l i a tes. Al l ri ghts reserved. Page 6 I loved th at I was able to try on all sorts of item s very easily an d then take ju st the ou tfits I wanted to the changing room to help m e m ake the final decision. Woman in the older age bracket who tested Cisco StyleMe Twenty-Somethings For younger women in their teens and early 20s, shopping is all about having fun. This group of consumers also enjoys shop p ing with friend s. In tests, younger women sp ent a sig nificant amount of time using Cisco StyleMe because it gave them a different way to shop with their friends. The newness of Cisco StyleMe also resonated with this group because it was fresh, exciting, and enhanced their shopping experience. I cou ld spen d h ou rs u sin g S tyleMe. It was great that I cou ld share the ou tfits I liked with m y friends. I can t wait until this is in all of m y favorite stores. Woman in the younger age bracket who tested Cisco StyleMe Increasing Sales in the Face of Rapidly Shifting Shopping Behaviors Sales are dramatically shifting from brick-and-mortar stores to the Internet. Highlighting the power of this market transition, Forester Research expects online apparel sales to g row at 10 percent CAG R while offline sales are projected to increase at a rate of just 3 In the United States, early retail adopters of e-commerce are already showing strong online revenues. For example, rep orted 29 p ercent of its sales in 2010 occur r ed online, while Urban Outfitters reported 19 p ercent of its sales came from the Internet in the same y According to Mintel, a leading market research firm in the United Kingdom, more than 35 percent of shoppers bought clothes online in 2010 a numb er that continues to grow. Additionally, online fashion sales have risen b y 152 p ercent over the past five years, reaching b illion in And this trend is exp ected only to accelerate. Forrester Research states, Online shopping will continue to cannibalize in-store shop p ing as consumers b ecome more familiar and b eg in, in many cases, to p refer the convenience of online shop p ing. 6 As these trends continue in force, retailers should look for new solutions to mutually reinforce and g row both in-store and online sales. Cisco Sty leMe allows retailers to accomplish this by turning their stores into a strateg ic advantage that streng thens sales g rowth across all channels. Cisco IBSG believes Cisco StyleMe has the potential to b enefit retailers in four ways: 1) Grow in-store and online sales by giving customers access to an extended range of products in their size. With greater selection, customers are more likely to find the items they want to purchase, thereby increasing sales for both store and online channels. 2) Increase return store visits by creating differentia ted in-store exp eriences. The battle for customer attention and loy alty is fierce. Cisco StyleMe gives retailers a powerful new way to Engagement Overview Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffi l i a tes. Al l ri ghts reserved. Page 7 entice consumers into their stores and provide them with a new way of shopping. By making shop p ing fun and easy , retailers are more like to enjoy return visits from customers. In a d d ition, the follow-up emails that list items from customers d ig ital ward rob es, comb ined with appropriate personalized offers, will continue to incr ea se conversions even after shop p ers leave the store by redirecting them to retailers e-commerce sites. 3) Increase both in-store and online conversion rates b y allowing customers to receive expert advice and interact with friends and family who influence their buying decisions. For many shop p ers, it is imp ortant to receive feedback from influencers designers, fashion experts, friends, and family to feel g ood about buying clothes. Cisco StyleMe provides a way for shop p ers to receive this information at the p oint of decision, which will turn shop p ers into buyers and buyers into loyal customers. It a lso a llows retailers to further increase conversions through follow-up marketing activities such as sending shoppers reminders about items they liked while they were in the store. 4) Increasing wallet share by providing integrated experiences that encourage shoppers to stay within a brand while they shop across channels. Cisco IBSG s research shows that consumers who regularly shop across multiple channels sp end 50 to 70 p ercent more on a sp ecific retailer s or b rand s By offering in-store, online, and mob ile touchp oints, Cisco StyleMe allows retailers to capture this additional revenue. For shoppers, Cisco StyleMe provides the best of both worlds (store and online) so they receive a wider selection of clothing from which to choose. In addition, Cisco StyleMe saves busy shop p ers time since they d on t have to wand er the store floor searching for items they wa nt to try on. Finally, customers can try on more items since they d on t have to chang e as often. One retailer taking advantage of Cisco StyleMe is John Lewis, the leading d ep artment store chain in the United King dom. The company is currently preparing to imp lement a Cisco StyleMe pilot project in sever a l of its stor es. Simon Russell, head of multichannel sales for John Lewis, believes mashop exp eriences play a key role in cap turing sales across channels and is excited to use Cisco StyleMe to further the chain s lead in the fashion retail market. Our goal is to be a leader in the multichannel world. With Cisco StyleMe, our customers can see our entire assortment, try on many different outfits, and get the sizes and colors they want. An d becau se they can u se so cial m e dia to sh are an d get advice, they ll be inspired to shop and buy even more. Simon Russell Head of Multichannel Sales John Lewis Engagement Overview Ci sc o I B S G 2011 Ci sc o a nd/ or i ts a ffi l i a tes. Al l ri ghts reserved. Page 8 Conclusion With Cisco StyleMe, retailers will soon have a powerful new weapon in the battle to innova te a nd reinvigorate the in-store experience. To p rep are, executives should position their stores at the center of the shop p ing exp erience rather than letting them become simp ly showrooms for online sales. They should also ensure their technolog y infrastructures are up to the task of sup p orting interactive and rich-media experiences, which, based on the response Cisco IBSG has received to date, will soon b ecome commonp lace among lead ing retailers. Retailers that prepare now will be in a strong position to capture the opportunity of incr ea sed revenues from consumers who spend more money when they use more than one channel to shop. For more information about Cisco StyleMe, please contact: Lisa Fretwell Clive Grinyer Senior Director, Global Retail Practice Director, Innova tions Practice Cisco Internet Business Solutions G roup Cisco Internet Business Solutions G roup +44 7879 436 114 +44 500814683 lfretwell@ Endnotes 1. Source: Forrester Research, 2011. 2. Source: Mintel, 2011. 3. Source: Forrester Research, 2011. 4. Sources: and Urban Outiftters, 2011. 5. Source: Mintel, 2011. 6. Source: Forrester Research, 2011. 7. Source: Cisco IBSG , 2011.

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