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LEVERAGING DIGITAL ID TO SCALE CIRCULAR FASHION



An Analytical Report Of Digital ID & The Impact On Sustainability



The report introduces and analyzes a digital initiative (e.g., a project or product) or digital innovation (e.g., technology or service) that could transform or disrupt firms, industries, markets, economies, or societies.



Macro Environments & The Emergence Of Circular Fashion





We live in a “fast fashion” world, where companies produce high volumes of low-priced clothing at the expense of the environment and workers. The demand for secondhand clothing is higher than it has ever been. But, brands are not benefiting from this new opportunity. Instead, resale platforms such as thredUP, Poshmark, and The RealReal, among others, are capturing the value of highly sought-after brands in every sale after the first.


Resale/second hand is a driver of circular fashion in that it extends the usable life of clothing and offers opportunities for repurposing. The growth in this market is driven by the growing number of people willing to sell their clothes due to new, online platforms such as thredUP, Poshmark, The Real Real, etc. But, current resale formats and options lack the intention inherent to true circularity. If this intention is captured, it can transform the consumer approach to owning and sharing clothing and simultaneously offer brands new revenue streams and strategic opportunities.



What Does Digital ID Do?





Digital ID & traceability goes beyond the back office unlocking a new world of loyalty-based experiences.


  1. DESIGN & DEVELOPMENT: Authenticates the make of a product, ensuring it meets sustainability, quality and testing, and compliance requirements

  2. SUPPLY CHAIN: Informs on actual inventory levels to improve merchandising decisions (pricing, promotions) and replenishment

  3. RETAIL & DISTRIBUTION: Automates the authentication of product at the point of sale and resale. Allows distributors to track inventory at an item level, not just a style level

  4. POST-PURCHASE & LOYALTY: Offers loyalty experiences that consumers can unlock by using products at various stages of the product life cycle




The Buzz Around Digital ID





"The launch of Digital Product IDs demonstrates how we continue to use technology to deliver more for our consumers and ensure the integrity of our products throughout their lifecycle.”


- David Lauren, Chief Innovation Officer, Ralph Lauren Corporation


Based on the TECH ASSESSMENT MODEL Digital ID can be considered a Venture initiative since it aims to leverage technologies or partners currently available outside of the existing companies. Digital ID also has the potential to become an Enterprise Action once organizations recognize the need to change their ongoing business models.


"Today, when we buy a garment, it is often challenging to reliably keep track of where it was made, what it is made of, and its authenticity. This can make it difficult to care properly for garments over the long term, to resell them, and even to recycle them. At YOOX NET-A-PORTER we believe that unique Digital IDs - essentially digital passports for the garments in our wardrobe – can help to overcome these challenges.”


- Giorgia Roversi, Director of Sustainability & Inclusion, YOOX NET-A-PORTER GROUP



Future Predictions





As the technology evolves and sees wider adoption, there are a few predictions on the development of Digital ID for a Circular Economy:


  • Allow space for a new generation of consumers who want greater transparency

  • Potential to gamify loyalty through tracking consumer and product lifetime relationships. The larger variety of consumer use cases, the deeper the loyalty

  • Tracking consumer demand to optimize production and reduce overstock

  • Authenticate sustainable efforts and reduce waste within the fashion industry

  • Control reseller market by diverting seconds-sales internally within the brand/platform ecosystem and authenticate re-sale products right at the source

  • Creating a Digital Fingerprint through technology that is intrinsic to the product without an added embellishment

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