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Tech Chats: EY’s Helen Merriott on how tech can transform the retail industry

In this Tech Chats video, we spoke with Helen Merriott from EY about the use of technology in retail.

Roop: Helen, thanks for joining us. Today we are talking about the use of technology in the retail space and EY did a report on that. Can you tell me a little bit about it?

Helen: Yes, sure, I’d be really happy to. So, at EY we were intrigued by the enormous number of returns and the rising number of returns in retail and set about doing a piece of primary research to ask consumers about their behaviour and also to ask them about their attitude towards some of the new technologies, which are coming into play.

R: What were the key findings of that report?

H: So, really interesting. We found that 2.2 out of every 10 garments that are purchased online are returned and 78% of those garments are returned because of a size or fit issues, which is an enormous issue, obviously, and if I put some numbers around that, the size of the returns issue in the UK is around £60bn each year, of which £20bn of that is related to online returns. So, it’s a huge issue and when we dug into and

So, it’s a huge issue and when we dug into and analysed the findings we found that there was a particular theme around women, sort of young, affluent women and their shopping behaviour. And if I sort of tell you the story of that, I think it’s quite illuminating. We found that particularly for that demographic, they would buy many different size and colour combinations of the garment, have those delivered to home, try them on, see how they looked and what was important to them was partly the experience of doing that but also getting their look really right. But then when we pressed them, they didn’t like the inconvenience of having to return, they’d much rather it was right the first time in terms of the selection they used to order and then not have to return. So, that’s quite interesting. Then we sort of asked them about that again and they were really, really open to the use of technology to improve their overall experience.

R: So, how can we use technology to combat that problem and reduce the volume of returns?

H: That’s a great question and it’s an area that’s developing really fast. So, I think many consumers and viewers of this will have some experience of clothing retailers and brands, who will often offer a consumer the opportunity to put in their vital statistics in a site in order to give a recommendation of size and there are some retailers who are recommending or sort of giving style advice aligned with that and some even have an avatar so that you can play around with it, an avatar that may or may not look like you and try on some clothes virtually, which is all great and it’s nice customer experience stuff. Where we see the real value coming, however, is further up the value chain.

So, if you think about the design and make sort of producing the garment process, there is technology coming, in fact it’s live and in part being used now, around 3D pattern technology, which when it comes to maturity it is going to enable us to design a product, have a 3D pattern, not on paper, but digitally and to use that to drive both the design and the make of the initial samples, but also the sort of full production runs. And when we can join that data, the data about the products and not just the product size, or garment size, but how that fabric and the fabric in the garment flows, and provide that to a consumer when they are shopping online, that starts to be really exciting and worthwhile for the consumer.

R: That sounds really valuable and useful for retailers, so when will see a mainstream adoption of this?

H: So things are moving quickly and I think mentioned that earlier. I think what we see is there are many, many solutions, hundreds of solutions that we uncovered in doing our scan, all at very different levels of maturity, a lot of investment, and also very early-stage startups as well as businesses starting to scale. So, all of the technology I’ve alluded to today exists. I think the question is how quickly would that be adopted and in a difficult retail economic environment, and how quickly would that become sort of the way business is done. I think our view is that within ten years, we’ll be looking at a really different end-to-end supply chain and customer experience.

R: Thank you for sharing that insight.

H: Thanks, Roop.