E-Commerce in the Textile and Apparel Industries - In the Virtual Dressing Room<br>Returns Are A Real Problem

by Jan Hammond and Kristin Kohler

Many distinctive aspects of the textile and apparel industries present challenges to implementing electronic commerce. First, and perhaps most important, is the difficulty of accurately characterizing the product online. Many of the characteristics of a garment that are pivotal to the consumer decision-making process—color, feel, and fit—are difficult, if not impossible, to communicate "virtually." Moreover, unlike books, music, and consumer electronics, the difficulty in describing the product cannot be offset easily with customer reviews, reviews by industry experts, or comparisons based on independent performance evaluations. (Although for online purchases, as for catalog purchases, brand names help consumers infer certain aspects of quality or fit, especially for consumers making repeat purchases.) These obstacles likely will act more as a deterrent in the B2C segment of electronic commerce than in the B2B segment, since industry standards for characterizing color and fabric are more familiar forms of communication for business partners than for individual consumers.

Compounding the difficulty in characterizing the product is the personal, often emotional nature of an apparel purchase. Apparel purchasing decisions are closely linked to individuals' feelings about themselves: their body image and the image they wish to project. Clothing is the "skin" one chooses to wear to project one's self-image to the public and hence is intimately tied to one's sense of self. Thus the decision can be laden with emotional factors that are less important in decisions to buy books, music, groceries, and electronics.

Ample evidence suggests that current B2C sites are unable to characterize their products adequately to allow consumers to make effective choices. Most compelling is the high return rate for apparel products purchased online, which mirrors the rate for catalog apparel purchases: By one estimate, returns for apparel bought from catalogs ranged from 12 to 35 percent, depending on the product's style and how fashion-forward it was. Specifically, for casual apparel, such as from Eddie Bauer or Lands' End, returns have been reported in the 12-18 percent range; for more fitted fashions, 20-28 percent; and for high fashion, they have been reported to have been as high as 35 percent. 2

Another approach examined consumer propensity to buy certain product categories on the Internet. An analysis by Harris Interactive ecommercePulse computed the ratio of dollars consumers spent offline as a result of online shopping to dollars spent online. The greater the ratio, the more likely that online shoppers use Internet shopping sites to gather information about products rather than to make direct purchases. It is not surprising that apparel led the list: For every dollar spent on apparel online, consumers who visited online apparel sites spent $2.92 purchasing apparel from catalogs or bricks and mortar stores. Compare the results for products that are easier to specify: computer software (offline-to-online ratio $0.99); health and beauty products ($0.93); music/video products ($0.83); and books ($0.68). 3

Ample evidence suggests that current B2C sites are unable to characterize their products adequately to allow consumers to make effective choices.

— Jan Hammond & Kristin Kohler

The accuracy of color on the Web is of particular concern to consumers. A Web-based survey conducted by InfoTrends Research Group indicated that 88 percent of consumers would prefer to shop at an Internet site that could guarantee "true and accurate" color. 4 Most of the consumers polled in the survey already use the Web to purchase nonapparel products that are not dependent on color. However, the respondents indicated that they rarely purchase apparel online, "largely because of their insecurity about getting what they expect." 5 The report indicated that many consumers who purchase apparel online refer to printed catalogs for more accurate depictions of color.

The degree to which the difficulty in characterizing apparel products inhibits online consumer purchases differs by garment type. Basic products are selling well online, according to Forrester Research. 6 These products have a number of characteristics that make them more amenable to online purchasing. First, they are fairly familiar products, making their descriptions easier to understand. The touch and feel of basic garments are quite familiar and are fairly similar across brands, which makes the buyer less hesitant to purchase them "sight unseen." Purchases of basic products also create fewer "surprises" when the garment arrives. (One industry observer noted that you need to "sell consumers twice"—first when they buy the item online, and second when they open the box and compare the product to what they remember seeing on their screen.) 7 Similarly, for more basic items, the fit of different garment styles tends to be better understood, making it easier to purchase online. In some cases, the cut of a basic garment may be more forgiving in that it can fit a wide range of body types. Products like men's dress shirts and women's hosiery, which have consistent, known sizing, are also amenable to online buying. Basic garments are typically relatively inexpensive, further contributing to a low level of perceived risk in an online purchase. And since basic products are worn for "everyday" events, their purchase usually evokes little emotion.

Consumers perceive more fashionable items to be more risky to purchase online: The decision is more significant because of the increased importance of touch and feel, color and cost, and the increased emotional element associated with more fashionable clothing, which is often purchased for special events. However, the Internet is expected to penetrate the fashion segments of the market, in part because it will provide exposure and access to unique or unusual products that are difficult for consumers to find locally. The ability to customize clothing for fit, fabric, or style should also provide an impetus to increase online sales of fashionable garments.

Several initiatives are under way to improve the ability of online sites to characterize their products and thereby reduce both the hesitancy of consumers to purchase apparel online and the return rates of those products. The key challenges are representing color, fit, and the details of design and style.

J. Crew is testing E-Color's new "Colorific" feature, designed to increase online color accuracy and consistency. 8 E-Color offers server-based software called True Internet Color to increase the accuracy of colors depicted online. Recent reports suggest that Bloomingdales.com, Jcrew.com, and others plan to adopt True Internet Color on their Websites. 9

Detail can be difficult to discern online. HP Open Pix and Live Picture offer zoom technology. According to Forrester, Bloomingdale's and J. Crew are starting to use these technologies on their sites. Most online apparel sites plan to introduce zoom technology.

A range of options is under development to help consumers identify the right size for apparel products they are considering. Some sites offer "fit calculators" to help consumers translate their measurements into sizes. Others (for example, Public Technologies Multimedia) offer more sophisticated software to map consumers' measurements to appropriate brands, styles, and sizes. Still others are using two- or three-dimensional models to help consumers predict product fit. A firm called TheRightSize recently announced technology called "The Rosetta Stone of Fit" to reduce the rate of size-related returns in the apparel industry. The company plans to offer the technology for use in Internet, catalog, and in-store shopping. 10 BodyMetrics Ltd. provides software that recommends the best fitting size for the garment selected and on-screen visualization of clothing on a customized mannequin. Body scanners for taking measurements have been developed, but Forrester Research suggests consumers may prefer to purchase products shown on an attractive model rather than seeing it draped over the consumer's true (but imperfect) body dimensions. Additional problems with body scanning may also inhibit adoption and use, such as the tendency for people to strike unnatural poses in the scanning machine, producing measurements that will not lead to good fit.

Reprinted with permission from the chapter "Distinctive Aspects of the Textile and Apparel Industries: Factors Affecting E-Commerce Adoption" in Tracking a Transformation: E-Commerce and the Terms of Competition in Industries by the Brookings Institute Press, 2002.

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Janice H. Hammond is the UPS Foundation Professor of Business Logistics at Harvard Business School.

Kristin Kohler is an MBA student at Harvard Business School.

Brookings Institution Press