If an array of start-ups and fashion players are successful, in the future every piece of clothing, watch or handbag you buy will have a digital twin.
Scan a QR code on an item of clothing and it will bring up a webpage full of information about that item, from materials used to styling suggestions and benefits, like access to exclusive products.
The same webpage can even be linked to a reselling partner, so you can easily put your purchase up for sale once you’re done wearing it. If you were the buyer of this used item, you could verify its authenticity by seeing previous owners return to its manufacturer. And maybe, if you were that manufacturer, you could get a royalty each time the item was resold.
An existing product at the center of its own data and service ecosystem is well established in other markets, especially big-ticket, tech-heavy items like cars. But fashion has only caught on to the idea, such as using RFID tags to track inventory in a warehouse. However, interest in giving products individual identifiers is growing, especially as businesses and consumers become more familiar with using blockchain technology to unlock new opportunities.
Breitling now issues blockchain-based digital passports for its watches with features like proof of authenticity and service notifications. The blockchain also powers Hublot’s electronic warranties, which customers activate by taking a photo of their watch with a phone.
It’s still far from standard in fashion, however. For certain items produced in limited quantities, such as luxury watches, assigning a numerical identifier is relatively simple. But the biggest brands can release millions of items each year, each of which would need a tag such as a QR code or an NFC chip.
Getting the setup right still leaves the biggest question unanswered: whether customers will use them. Brian Kilcourse, managing partner of research and advisory firm Retail Systems Research, put it this way: “It must be more valuable to use it than to ignore it. Consumers don’t get excited about this stuff.
Bridging the physical and digital
Many start-ups try to trivialize digital twins. Many of them take on the task, like Lablaco and Arianee, rely on blockchain for the business, pairing each item with its own non-fungible token, or NFT. It’s a method also used by the Aura Blockchain Consortium, a non-profit organization formed by luxury players such as LVMH, Prada and Richemont-owned Cartier. Aura has registered “double-digit millions” of products on its private blockchain, Daniela Ott, Aura’s general secretary, told BoF last year.
Eon, which recently received funding from Imaginary Ventures, the venture capital firm of Net-a-Porter founder Natalie Massenet and investor Nick Brown, is creating credentials that are not blockchain-based, but claims that brands can still connect them on the blockchain of their choice.
But to make digital IDs as useful as possible, common standards need to be established so that each digital ID platform is not a closed system with a limited set of capabilities. Brands already have much of the information needed to give their products a basic digital identity in their inventory management systems, but the data needs to be extracted and processed.
Eon’s partners connect to its platform via an API. So far, they include luxury and designer companies, like Yoox Net-a-Porter and Gabriela Hearst, and mass retailers like Target.
“All product data is basically in a vault,” said Natasha Franck, founder and chief executive of Eon. “We say, ‘Okay, there are five million of this sweater in this size, in this color, produced in this factory.’ And we generate the five million serialized unique identifiers.
The information can be embedded in a QR code, NFC chip or RFID tag and attached during manufacturing. The exact shape varies by product. Clothes might get a QR code next to their washing instructions, but a handbag might have an NFC chip sewn into it.
Eon aims for its platform to be useful at different points in the life of a product. Durability information or style suggestions can be helpful when a customer is shopping. The same menu offering these selections could also offer an option to resell the garment through a participating retailer or direct the user to a textile recycler if the item no longer has resale value.
Aura imagined using digital IDs to enhance storytelling around luxury products. Ott said his dream was to show a video of the person who made a watch or a bag. Lablaco strives to link its digital IDs to virtual versions of the garments.
“They can be used for augmented reality experiences such as trial runs,” said Lorenzo Albrighi, co-founder and CEO of Lablaco.
The company is even building a virtual world where digital twins can be worn, although its main goal is to enable circularity. H&M tested its technology for a rental program in a Berlin store last year and recently worked with Weinsanto on a collection for Dover Street Little Market in Paris. Clothes have “timelines” where their owners can record memories and other content. (Lablaco said it was migrating from the Ethereum blockchain to the less energy-intensive Flow blockchain.)
A challenge that all players who create digital IDs face is to make them as functional as possible.
“A product ID is worthless if it doesn’t connect to other apps,” says Franck. This is why Eon is building a network of partners to which its digital twins can connect.
Arianee has made its protocol open-source so that any developer can use it. Lablaco is now trying to build an open platform. Its first partner will be FibreTrace, which allows companies to track materials throughout the supply chain, Albrighi said.
More utility may prove essential in enticing consumers to use these digital identities.
“We’re just at the very beginning,” said Sucharita Kodali, vice president and principal analyst at Forrester. “They’re building the data layer right now. There must be a user layer.
However, rival companies do not always cooperate and may not want to be on the same platform. If digital IDs don’t offer enough value for consumers to pay attention, it’s unclear how long brands will spend resources on them.
But proponents say they will unlock benefits for brands and shoppers. In a recent interview with BoF about Imaginary Ventures’ investment in Eon, of which she is joining the board, Massenet described digital IDs as a way to bring physical fashion to the web3, an evolution being considered of the Internet to a decentralized architecture powered largely by blockchain. She compared the creation of IDs to the laying of railroads at the start of the Industrial Revolution.
According to her, commerce has gradually moved away from a centralized model where the consumer, the product and the retailer are all in one place. E-commerce has made the product a data point; the buyer did not need to be physically nearby and it could be stored in a warehouse. The rise of marketplaces meant that the retailer did not even need to own the product, and the spread of peer-to-peer commerce further decentralized purchasing. In this context, products need their own distinct and digitized identities.
“We are on the cusp of so many new developments in retail that will transform the way consumers, brands and businesses interact,” she said.