Smartwrap, the clothing store with 3D virtual fitting solution

    • Università: SDA Bocconi Asia Center
    • Docenti:

      Sandro Castaldo

    SmartWrap is a clothing store with an augmented reality-based 3D Virtual Fitting Solution, allowing customers to access a convenient way to try on new clothes to see each piece of clothing realistically draped over them, moving freely as the shopper moves, without the hassle of waiting for a physical fitting room. Our customers can also shop online with us on our website as per their convenience. Our unique selling propositions include:

    • Quality and material check process
    • Smart Checkout
    • Environment and lighting adaptability: Look of the outfit in different lighting arrangements
    • Additional stylist recommendations to match the chosen items
    • Easy translation of the instructions to make the store tourist friendly
    • Instant messaging service to get the links of the selected items that can be used for buying later online

    Market & Industry

    Today, with the novel coronavirus outbreak, business across the world have been disrupted and the retail fashion industry is one of the hard-hit sectors. According to a customer survey report conducted by First Sight, Inc. nearly 54% of the people are not comfortable using the trial rooms after reopening the shops. This is where virtual fitting rooms comes into the picture. The global virtual fitting rooms market size was valued at USD 2.44billion in 2019 and is projected to reach USD 10billion by 2027, with an expected CAGR of 20.1%. As brand experience is a key driver for brand commitment, many of the fashion brands are adopting the VFR solutions. As the 3D virtual fitting rooms are enriched with multisensory simulations for engaging customers to their brand, it is imperative that adoption of these solutions will surge in the forthcoming years. Although smartphones are escalating the demand for e-commerce websites, customers still prefer shopping through physical stores with an intention to check out the products before purchasing it, thus resulting in implementation of high VFR solutions across physical stores. Personalized recommendations provided by interactive fitting rooms again enhance the shoppers experience thus encouraging retailers to adopt advanced smart dressing room solutions. As a result, the virtual fitting rooms and interactive smart screens are expected to flourish the market growth.

    Swot analysis

    SmartWrap’s SWOT Analysis is done by surveying the surrounding environment of the idea to implement virtual fitting rooms in stores, identifying the internal characteristics of the idea as either Strengths or Weakness and external factors as Opportunities or Threats. SmartWrap’s Strengths are more because it makes shopping experience easier and safer. Interactive panel with adjustable lighting option, elimination of risk of infections through clothes tried by so many people, stylists’ recommendations on the panel based on anthropometrical data sensed, easy update of inventory with every purchase being made and contactless check out options are some of its Strengths while people feeling their collected data being used elsewhere, problems that may arise with the software, hardware, and maintenance of it are its Weakness. Although this idea has been implemented in some luxury stores in some countries, the fact that it has not been implemented anywhere in India or South Asia yet is one of its biggest Opportunities along with slowly incorporating other fashion and accessories in the same model. Threats to this idea would be replication of it in competitor’s stores and information breaching.

    Positioning & Targeting

    The expectations of shoppers have steadily shifted towards unparalleled high standards of service. Spoilt by the convenience of online shopping, consumers expect their in-store experience to be equally easy and enjoyable as a result, fashion retailers are challenged to meet their expectations Consumers walk into fashion stores to see, touch, and try on different outfits which they take with them to the fitting room, the place where buying decisions are made. This is where SmartWrap comes to life.

    Our customer base includes a gender mix of 60% female and 40% male, students, housewives and professionals, aged from 25 to 50 years old, who are tech savvy, hygiene conscious and status oriented. They belong to the medium to high income group with annual salaries above INR 1,000,000.

    The Store

    SmartWrap will be located in the Palladium Mall, Lower Parel, Mumbai. The population of the city is 20.4 million and the purchasing power of the residents is higher than the Indian average. The average footfall in the mall is about 5 million people per month including both students and young professionals. Thus, this location is a consistent choice regarding our positioning, targeting, and pricing strategies. Reaching the location is also very convenient as it is well connected through roads and railway lines. The mall does not host any store providing virtual fitting solutions, so the competition is low.

    The front of our store is fully made of glass, so that pedestrians can see directly what is going on in the store. The entire store is divided into 2 main departments, men, and women. Upon entering, the shopper can see the mannequins dressed in our latest collection.  Inside the store, information is given to the customers for using the virtual fitting room. They are also assisted by our in-house stylists. There are limited number of displays (C and L type) as ours is a virtual fitting room solution, the products are stocked in the storage rooms.

    Communication

    Smartwrap has created a new widget for the fashion industry, and our marketing strategies and roadmap will show that we have a unique opportunity to expand into a new market with the help of In-house marketing tactics and social media exposure. By implementing smart strategies such as in-store fun events, 15-days Refund policy and 30 days Replacement flexibility and various Loyalty and bonus programs, Smartwrap focuses to retain and sustain customers trust and loyalty. For the purpose of expansion and exposure, it also focuses on improving and extensively using its social media presence to sustain in this dynamic competitive environment. The three main platforms where Smartwrap is going to be present are: Facebook, Twitter, and Instagram.

    Products & Services

    If there is one thing we know about our customers—they are busy living. They are going to work. They are raising kids. They are hitting the gym. They are studying for tests. They are headed out on Friday night. They are staying in with Sunday pancakes. Keeping you effortlessly stylish throughout the day lies at the core of what we do. At SmartWrap we have made it our mission to cater to both men and women who love to live. We have got the looks you want, from the brands you love, in the colors and sizes you need. Our clothing and accessories are carefully curated to provide our customers the latest fashions from T shirts, Shirts, Jeans, Trousers, Blazers, Jackets and Coats for men and Blouses, Pants, Skirts, Dresses, Jumpsuits, Formal wear for women we have it all. To keep our customers in style we post new arrivals daily, as well as offer stylist picks to help any indecisive shoppers. Our top priorities are excellent customer service, exceptionally quick order processing and a hassle-free return policy.

    Financial

    Our target clients are middle- and upper-class people who like technology and give utmost importance to hygiene. As per our analysis over 1 crore shopping trips to malls are made during a year in Mumbai. Our store can accommodate 192 customer every day at 100% efficiency. COVID-19 has triggered fear and people now take hygiene and safety very seriously. This factor alone will contribute to high brand acceptance rate and sales. We assume Rs 2,000 as average revenue per customer and net revenue of Rs 9cr, 9.4cr & 10cr for the first 3 years, respectively. Cost of goods amount to 50% thus resulting in gross profit of Rs 4.49cr, 4.71cr & 5cr, respectively. The brand will witness 5% revenue growth rate every year. Major operational expenses incurred are - Rent, HR & Marketing. The 2500 sq. ft. showroom will have a 4-people workforce managing store operations. All the business efforts will reap EBIT of Rs 2.82cr, 3.06cr & 3.29cr in the first year 3 years, respectively.

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