Shopping for clothes online has become a staple for many. Gone are the days of taking a trip to the mall and spending hours browsing through shops. Now you can access it all from the comfort of your home. But after saying goodbye to your money and waiting excitedly for that new pair of jeans, there is nothing more disappointing than opening the packet, putting them on with bated breath, and then finding out: they don’t fit. We have all been there.
Not only does this problem frustrate customers, but it also comes with costs for the clothing companies: shipping, processing, cleaning – all of it adds up.
But the Australian-based start-up, ZILIO, is creating the ultimate fix for these shopping woes: a virtual changing room for online shoppers. Imagine dressing your Sims avatar, except the body accurately reflects yours and the clothes are twins of actual brand designs that you can purchase. Before buying, you can see exactly how those will jeans fit.
We spoke to the Melbourne-based co-founder, Anthony Kwok, to find out more about this exciting technology that may become the standard for future fashion e-commerce:
Q: Online shopping has increased revenues and made buying products easier than ever. But there are downsides to ecommerce in the fashion world. Can you speak to some of the challenges that fashion ecommerce faces?
A: Online shopping is cool because it opens up the world to shoppers, [and gives them access] to different brands that they might not have been able to access before. And obviously it is convenient. That is why everyone loves it.
But when we worked in fashion retail for ZILIO, [we saw that] the uncertainty and confusion around garment sizing really stops people from being able to access all that online shopping has to offer. Half the people you talk to avoid shopping online just to avoid the hassle of having to return things. Or, on the other side of the spectrum, a lot of people buy like 10 things, and they’ll return 8 of them religiously. They use their homes as a changing room.
But obviously it creates a big returns problem for businesses, and this cuts into their profit lines. On the sustainability side of things, it is also a dirty little secret but most of our returns don’t go back on the shelves. A lot of brands don’t even want to deal with the returns, they just kind of throw it out, or give it to a secondary supplier, because it costs so much to process. [The returned clothes] often just end up being burnt or they end up in landfills.
Q: According to research, 22% of online returns occur because clothing products ordered fit or look differently in person. Many consumers prefer to use both online and in-store avenues, such as browsing online but buying in-store, or browsing both online and in-store. As a result, many fashion brands are putting effort into both traditional and online retail. How does ZILIO fill this gap and enhance the online shopping experience?
A: When people buy 10 things and return 8, or they shop online but then purchase in-store, they do it to combat a common e-commerce problem: the uncertainty around not knowing how anything fits when you shop online. There are a lot of shopping behaviours that act as pain management for this problem.
With ZILIO, we are trying to eradicate this problem. We’re not just a pain management solution. A lot of sizing solutions just try to reduce the problem without trying to solve it in its entirety. But all our efforts are aimed at just solving garment fit. And through that, people won’t have to shop online and in-store just to overcome the problem. They don’t have to do all this extra stuff. They can just shop online or in-store and have a more seamless customer experience.
Q:What inspired ZILIO and the idea to use technology to fix some of the weaknesses of online retail shopping?
A:I am lazy when it comes to trying on clothes and the changeroom stuff. One day I got so fed up with it, because [ with the way things are now] you have to try on clothes in order to find your perfect fit, to discover your style, and to get your hands on the right ensemble. And one day I said, “Look, if we can dress ourselves in a video game, such as dressing an avatar, why can’t we do that in real life?” And I just thought: Why not?
I was working in a fashion retail department store in Australia called David Jones, and I saw the constant frustration from shoppers who would shop online and always mess the sizes up. They would always have to come in and return, and that’s the story of their lives. You could see that they were frustrated. So I just had this this “what if” idea, and out came ZILIO: we created a virtual fitting room solution for the biggest problem in online shopping.
Q: How does the technology work to create an accurate picture of how clothes will fit on different bodies?
A: We work closely with fashion brands, and whilst working with them and the designers we get all the data around the garments, such as the garment measurements and fabric type. We then use that data to create digital twins of that garment. And on the other hand, we get the measurements of shoppers through our smartphone body-scanning technology, and we convert their bodies into a dataset. Then we just marry the two datasets together, and the difference between the two data sets will be the garment fit.
By having access to all of these unique insights on garment fit, we’re then able to visually show this to the online shopper in a way that is easily understood and digested so that they are able to choose their perfect size as efficiently as possible.
Q: So how do you see if it’s too loose or too tight? Is that where the heatmapping comes in?
A: There are two modes [that show two different] views or displays of your avatar. The Measurement Display shows your avatar, and there are many measurement points on your body like your waist, your hip, your top thigh, and so on. And for all these points you’ll be able to see the garment fit measurements, like 2cm of looseness here or extra tightness there.
And if you switch the view into the Perfect Fit Guide display, then you’ll be able to translate all those measurements [and compare it to the intended design fit]. You’ll have a little icon that’s next to the avatar saying if it’s too loose or too tight, or if it’s in the ‘green zone’ which is the right fit.
Q: Tell me a bit more about this smartphone body scan. Does that mean that people don’t have to physically measure themselves to get their clothing measurements?
A: That’s exactly what it means. You’ll be able to create avatars immediately on the spot just from two or three photos. You’ll be able to map an entire body accurately into a data-set with a full set of measurements.
Q: And these body scans are generally quite accurate?
A: They are. Over the past few years, the [progress of] technology in the world has made it accurate enough for us to comfortably use it in terms of garment fit. A few years ago, especially before Covid, it was totally out of the question. But [by] now, the technology has developed quite a bit.
Q: Do you think that retail companies will start adopting these technologies themselves as a part of the online shopping experience?
A: That’s the reason why we made ZILIO. So that we can offer retailers a solution to this big problem that they’re facing. Retailers are bleeding through their profit lines [and returns are a big reason for this]. One example is ASOS. Back in 2012, the CEO said that if they can decrease their return rate by just 1%, then they’d increase their profit margins by 15 million dollars instantly. And this is back in 2012 when their entire net revenue was only 55 or 60 million dollars. [Returns] eat away at a lot of their resources, but no-one has an answer to it.
On the other hand, if the question is, ‘Will brands and retailers invest in themselves to develop this kind of technology and adopt this kind of technology?’ [The answer is that] it’s a possibility, but I think it’s unlikely. We’ve seen Levis and other brands try to do it, and it hasn’t been successful yet. Because the technology just doesn’t exist. It takes a lot of investment to be able to pull this off.
But retailers and brands will have to adopt this [kind of solution], whether it be with ZILIO or something else. I can say this with confidence. [In the same way that] you can’t be a clothing store without having change rooms, [this type of technology will become necessary for online shopping businesses].
Q: Right, so in the future you won’t be able to have an online shopping store without having an online changeroom. If I’ve understood you correctly, you are a B2B business: your customers are retail stores who need your technology, you don’t sell your app directly to customers?
A: Yes exactly. It’s a website plugin for brands, and their customers can use [the technology] for free.
Q: What is your clientele base like at the moment?
A: We’re still at a relatively early stage [of our start-up]. We founded ZILIO in 2019. So, all the brands we’re working with are local, in Melbourne specifically. But because we’re a digital business, we can work with anyone in the world. We’ve got plans [to grow our clientele] beyond just Australia.
Q: Can you speak to the broader power of this kind of technology to change the world of fashion and online shopping? Does it have any potential links to the metaverse and VR retail?
A: I think this [technology] can go a long way beyond just increasing returns and conversion rates. The reason why we got into this, and it’s a big motivating factor for me personally, is that through working in retail we’ve been able to see how fashion can really empower people and [enrich] their lives. It can give them [a platform for] self-expression and [improve] their confidence.
You put a person in the perfect-fitting outfit, and they’ll be able to feel like a million dollars. We always saw that with our old clients. They come into stores looking for an outfit for their first job interview or their first date or their wedding or something, and they might be all shy and they’re not really feeling their best. But then you put them in the right outfit and they’re ready to take on the world.
Online shopping enables you to access all of this on an unlimited scale. Because there are thousands of brands that you have access to, you’re [more likely to find] that right brand and fit. That perfect style.
But because of this sizing problem, no-one’s been able to [have this access] and really take advantage of [all there is on offer]. [Solving the returns problem and helping people to find clothes that fit online] has the potential to bring people closer to being able to have that self-expression – to being able to really take advantage of what fashion can do for them.
Q: What are some of the challenges you have faced as a growing start-up?
A: I’d say capital and runway time have been our biggest challenges. [Runway is basically the amount of time we have left before we run out of capital]. This is mainly because our tech is so complex. It doesn’t exist in the world. That is also why you don’t see any sizing solutions solving the problem. To be able to build this tech and solve this riddle, you need strong talent on the technical team. And that’s expensive. It also takes time to re-iterate, and to navigate through this problem, [because you are] continuously failing, [learning], and tweaking the solution until we can get there.
We are also first-time founders and [are young], so we were all broke [when we first started]. We saved up quite a bit, and we invested that, but we were always facing a scenario of like, ‘Okay, we’ve got three weeks until we’re bankrupt, maybe 12 weeks on a good day.’
We almost went bankrupt within our first four weeks. The investor we had fell through, and there was a week left until we were going to run out of money. My cofounder also had job offers for corporate gigs that pay much more, and he had bills to pay. He sacrificed a lot of money to come on board with us. And I was about to sell my car just to buy some more time. I really believed in this product, and in this idea. And it was just heart-breaking to know that we were going to fail before we even had a chance.
After a while, we started making a name for ourselves around our community and people started invested in us. They saw that no matter how tough it got we wouldn’t quit. After a while it got a bit easier [to secure funding], which is how we got to this point.
[This financial battle] was the story of our lives for literally two or three years. This year [things are better for the company financially because] my cofounder and I took ourselves off payroll. We’re sacrificing everything for the technical team, and now we’ve got a year until we’re right out of runway, so we have that comfort.
Q: If there’s wasn’t a motive for businesses to invest in online shopping before, I’m sure the pandemic really changed that, so hopefully [things will get better].
A: Yes, it was good timing. We’ve been very, very blessed, especially of late.
Q: What is the biggest lesson you have had to learn from this experience?
A: All these years, we’ve very much been in a scarcity mindset. The focus was on how we need capital, and how we’re always running out. And we were always getting into debt. It was this mindset of ‘we need to do as much as we can so that we can raise investment’, not ‘we need to do as much as we can so we can make this idea work.’ We spent years researching and made sure the idea was rock-solid and better than anything on the market. But as we were growing and building it, the fear started coming in. We were always focusing on having to extend the lifeline of ZILIO, and that requires investment. We were always in the mindset of ‘we need investors, and once we get investors, everything’s going to be fine.’ But that is the biggest trap that founders can fall into.
I’d say the best advice is to bootstrap as much as you can and find a way to become self-sustainable as fast as you can. [This means using personal savings, borrowing money or receiving investments from family and friends, and using money from initial sales rather than seeking investors or bank loans]. If you come from that angle, if you get investment it is a bonus. But you don’t do things just to get investment.
It’s kind of like dating. If you talk to a person just to try and date them, there’s a [sense of] desperation. But if you’re working on [your own thing], trying to do the greatest things in your life, and you [meet someone] as a by-product, then you’re in a better position to provide more value, have a better relationship, and have more chances at things like that happening.
It’s about honestly not caring if [investors] give you money, and instead being genuinely interested in who they are and building an authentic connection. And through that process, if you [end up] wanting to work together, that can be cool. [But it’s not the endgame of the interaction]. It creates a different dynamic.
Q: Looking to the future, what are your biggest short-term and long-term goals for ZILIO?
A: We are currently building our [first fully working version of ZILIO which has all the core features], but there are still parts of the technology that are a bit unknown. And we’re busy solving that problem. We’ve done most of it, but the goal is to be able to launch later in the year. We will only be working with denim brands at first and will start generating revenue.
In the long-term, our goal is to be the leader in solving the trillion-dollar Sizing and Returns problem in online shopping. We believe that online shopping has a lot more potential of blowing up if this problem is resolved and we want to be that reason why.
In general, we’re trying to meet with as many fashion brands as possible and talk to people in the industry. That’s how [we network, get feedback and information], and chat with shoppers. It’s how we’ve been able to get to where we are. But we’re still trying to figure out a lot of things out on the way. So we’d love to meet more brands and learn how we can create the best solution for them, and solve their pain points to the best of our ability.
Technology is moving at a fast pace and just as online shopping seemed to explode overnight, we can expect fashion e-commerce to grow in new and exciting ways. ZILIO’s virtual changeroom is an idea that has tons of potential and may just be the next big thing in online retail. Goodbye to clothes that don’t fit and expensive, inconvenient returns. The future of fashion e-commerce is here.