14 July 2022
by Isabelle Ohnemus
Photo by Jon Cellier on Unsplash
With inflation running at its highest level in 40 years and the Federal Reserve adopting an increasingly aggressive stance to tame consumer demand and prices, the risk of a global recession is on the rise.
With no end in sight to the disruption of the global supply chain caused by the COVID-19 pandemic and more recently the war in Ukraine, input costs will continue to escalate.
The time for deliberation is over.
The choice, preserve margin and pass the additional cost on to your customer in the form of higher selling prices. Alternatively, absorb the cost increase and maintain current selling prices. Whatever the choice, bottom-line profitability will be adversely affected. Revenue will be challenged as customers reject higher price tags while absorbing the increase in input costs will squeeze margins.
Incorporating a size and fit guidance solution in your product detail pages should be part of a strategy to maintain and grow sales while preserving margin in a global economy experiencing significant inflationary pressure and the prospect of a prolonged recession.
While there is a competing array of size and fit recommendation technologies to choose from, now is not the time to experiment with technologies, the application of which is in their infancy in the size and fit guidance space.
Whether it is the metaverse or a combination of augmented reality and virtual reality, the promise of these technologies to deliver a convergence of the real and virtual worlds remains unfulfilled.
Tried and tested, question-based solutions combining both customer biometric and garment data deliver an extremely high accuracy of size and fit recommendations. Easily integrated into your product detail pages they provide an effective response to the current risk of a downturn in the global economy.
Sizing and fit is undoubtedly the main reason for returning garments purchased online. The costs associated with the returns process are well documented, and cost savings derived from integrating a size and fit calculator into your product detail pages and the attendant reduction in returns are easily quantified.
The benefits of a size and fit solution, however, extend well beyond cost savings specific to the returns process. Size and fit technology is a key contributor to the “big data” that fuels the many predictive models upon which the fashion industry and the planning department are reliant.
Segmenting customers into audiences based on broad factors such as product interest, buyer types and their location in the purchase journey is now less than optimal given the volume of customer-specific data that is currently available on the larger e-commerce platforms.
Integrating size and fit technology into the online shopping experience facilitates the collection of data, feeding the pipeline that fuels the personalization expected by the online shopper.
Studies show the benefits of personalization include:
Personalizing the entire customer journey on a one-to-one basis simplifies the decision-making required of the online shopper faced with a bewildering array of products. Customer engagement is also enhanced by establishing an emotional connection between the brand and the customer as their unique characteristics, preferences, needs, and wants are recognized and acted upon.
The combination of higher interest rates and inflation is a double-edged sword.
Working capital invested in the supply chain, whether raw material, work-in-progress or finished goods, will increase in absolute terms as cost-push inflation leads to higher input prices, and interest rates rise to combat inflationary pressures.
The threat to profitability is clearly evident.
Size and fit technology will again contribute to supplying the data supply chain managers require if they are to optimize supply chain planning. If the challenges of overproduction, wrong production, and short production are to be addressed the real-time data delivered by size and fit solutions are fundamental to predicting consumer demand and the problem of unsold clothing and stock-outs.
And while size and fit solutions are not just about reducing returns and the associated cost, returns data feeds directly into the production process providing valuable information in respect of product quality, size, and fit that may be driving returns.
While integrating a size and fit solution into your e-commerce website will not prevent the predicted recession, neither does it pay to leave money on the table.
At a minimum, size and fit technology will improve your customer experience, maintain revenues, and preserve margin in what may turn out to be an unpredictable global economy.