With a history rich in catalogue retailing, Littlewoods.com owner Shop Direct knows a thing or two about product presentation.

But in recent years, as the company has embarked on a digital-first strategy, the vast majority of the business's time and energy has been spent increasing customer engagement and maximising revenues of its five online brands, which also include Very.co.uk, Isme.com, KandCo.com, LittlewoodsIreland.ie and Woolworths.co.uk.

Having outsourced its customer service operations and reduced catalogue production from 29 million in 2005 to around four million this year, Shop Direct announced its first annual profit for a decade in the summer. And as it looks to maximise revenues over the next ten years, the retailer is pinning its hopes on virtual fitting rooms and other rich technologies to attract, retain and delight its customers, and present its products in a modern way.

Jonathan Wall, Shop Direct's group eCommerce director, told Essential Retail that virtual fitting rooms could be a "big win" for the company, and it's currently an area of significant focus as it looks to find the best solution from a burgeoning array of options.

"Obviously as a mail order business, returns are a big cost for us," he explained.

"If we can reduce this by 1% it could bring a significant saving to our business or allow us to reduce prices, so we are desperate for digital fitting rooms to work. There are lots of different technologies in this space, and we're trying to work out the best way forward."

Return rates for some of the leading fashion retailers are reportedly as high as a third of all sales, so virtual fitting rooms are being touted as a way of letting customers 'try on' a product as if they were in-store. It is clear that getting this technology right could pave the way for a much more profitable eCommerce operation.

Shop Direct is currently testing a number of technologies, working with the likes of Fits.me and Metail, but split tests are proving that customers appreciate some of the features but do not like others. It appears that there is some way to go to find the perfect fit.

Offering some insight into the testing process, Wall said: "Our customers have told us that it's not about building virtual avatars that they can put their face on, but they have also told us it's definitely more than just having a static size guide on the site.

"We are working with partners to see if it's an interactive size guide or some form of mannequin based avatar that will work – it's a very exciting area at the moment."

Wall admits that changes made to the business in recent years have made it easier to trial new technology, allowing the company to "fast fail" or "fast succeed" which is a flexibility that can prove crucial in such a rapidly evolving digital economy.

Two or three years ago it would have taken around six months to bring in new technology to the business, he added, but the group's legal and procurement processes have been made more efficient to allow it to trial new systems and software much more quickly than in previous years.

"If we see new technologies being used by competitors or partners come to us, which is happening on an increasingly regular basis, the thing for us is to get them live and tested quicker than we've ever been able to do before.

"We have lots of traffic coming to our site so within days we can gauge if something is going to be successful or not. This is a key thing for us – the ability to fast fail and get things out on the sites."

Much of the technology currently being investigated at Shop Direct fits in with the new mobile path to purchase that is seeing smartphones and tablet devices become the point of focus for retailers across the globe. New data from IMRG and Capgemini shows that UK shoppers are expected to spend £2.9 billion via mobile devices this month alone, which is double the figure from December 2012.

For Wall and Shop Direct, a lot of work has gone into producing digital catalogues that operate online and on mobile retail sites, and they are currently piloting Adobe apps that the company hopes will provide a "rich and engaging experience" for customers.

It's a step forward from the PDF-based page-turning catalogues that Shop Direct currently offers online, but there are a number of challenges the business faces in using these platforms to drive revenue.

"We're looking at what the future is for digital catalogues and what the KPIs will be – should it be customer engagement or should it be about driving revenue?" Wall questioned.

"It's a really difficult conundrum for us because we want engagement but at the end of the day we are a retailer and need to make revenue."

The group currently does not have a transactional app, with huge focus given to rolling out and maintaining mobile websites in recent years, but in 2014 it will launch a transactional app that is being viewed as a significant revenue generator.

Analytical studies from Shop Direct have shown that its mobile customers are much more likely to make a purchase with the business, which justifies why the company is spending so much of its time developing mCommerce strategies. Speaking at a Mobile Marketing Association forum this autumn, Wall said that he expects all Shop Direct customer transactions in 2015 to have touched a mobile at some stage.

"I was trying to explain how important we see mobile to our business," he explained.

"It is the silver bullet and it's the first time we've been able to truly speak to our customers 24/7."

Whether it is what the eCommerce boss describes as "snacking" to find out more information about a product or the company, or whether it is solely checking delivery options and pick-up points, mobile is quite clearly becoming central to the consumer purchase journey.

"When customers just browse on their mobile and then go to desktop, the conversion uplift is so significant," said Wall.

"We know customers who browse on a mobile and order on a desktop are by far our most engaged customers."

Other technology, such as augmented reality and scan and buy QR code solutions, has been trialled by the group but customer take-up was weak. Wall describes it as "technology for technology's sake" and showcase solutions that are someway ahead of what the customer actually requires.

The ability to try new technologies quickly, discard those that are not successful and run with those that prove useful is clearly bringing a number of benefits to the business.

Shop Direct's latest annual trading statement showed that sales were up 1% year on year to £1.69 billion and pre-tax profit reached £6.6 million, compared to last year's loss of almost £60 million which was attributed to a number of redundancy payments and significant digital investment.

CEO of Shop Direct Alex Baldock said at the time the results were announced that online now accounted for more than 80% of all sales, with around two-fifths of those coming from mobile. He also spoke of a "clearly defined and disciplined strategy for the continued evolution of Shop Direct, with world class personalisation at the heart" as the business moves towards becoming "a world-class digital retailer".

Wall is confident that the strategy is working, and as eCommerce director he is at the heart of much of what is set to drive the business forward in the coming years.

"We've invested a lot of money [saved from cutting down catalogue numbers] into digital marketing to migrate customers online, and I think you can see from our profit that we are starting to reap the benefits of that.

"We know if we can migrate customers to digital they will more profitable for us in the long term – and we will also have a better experience to offer them."

http://www.shopdirect.com/