The rate of change has never been greater — or faster — for the footwear industry, with new challenges popping up every day in nearly all corners of the business, from navigating cash crunches and supply chain issues to understanding the latest technological advances. In its “Ask An Expert” series, FN asks industry leaders — all solutions-based providers — to take on some of the most timely topics.
Consumers increasingly want transparency around the products they’re buying, while brands and retailers want increased visibility into their supply chains. As resale markets grow in volume and dangers of fraud increase, being able to authenticate product quickly and easily is also a valuable asset. One way to achieve this, while also unlocking a new avenue for consumer engagement, is through the use of digital product identities.
Keith Turco, president of product cloud platform Evrythng, spoke with FN about creating a digital product identity; the use cases for both B2B and B2C; and how these identities can be used even after the original sale.
FN: Why is it so critical to be able to locate an item at any point in the product lifecycle?
Keith Turco: Being able to trace items throughout the entire product lifecycle allows brands to optimize their business operations, while meeting consumers’ increased demand for product transparency and authenticity. Today, digital technologies can enable complete product traceability; brands that give each item an active digital identity at the time of production gain a real-time view of the entire product lifecycle. Brands are seeking visibility into the journeys of individual products to solve numerous business issues, including order diversion, recalls, and damaged and irregular goods.
For example, if an order is expected in New York but ends up in Chicago, a company that can track its products will be able to quickly locate the goods and correct the problem, preventing more costly disruption and delays. Similarly, when a brand needs to recall an order, being able to easily identify which container or retail outlet has the items enables the brand to issue an exact recall, versus a broad, sweeping and more expensive one. At an item level, a brand can remedy the issue directly with the customer and provide an immediate fix, keeping the customer happy and perhaps even building deeper loyalty.
FN: What exactly is a digital product identity and how is one created for a product?
KT: A digital identity is carried by an item throughout its lifecycle, from point of manufacture to sale to resale, reuse or recycle. A brand or manufacturer first assigns an item a serialized digital identity. That identity is affixed to the product at the point of creation or packaging and a digital “twin” for that ID is created and housed in the cloud. The unique ID can be printed as a QR code; printed as a watermark on a product label or tag; or housed in an RFID, Bluetooth or NFC chip in the item. At EVRYTHNG, we call these Active Digital Identities™ and we work with a well-established network of factories, labeling technology partners and packaging companies to manage the process of assigning, activating and tracking these.
FN: How can brands use these profiles to elevate the consumer experience?
KT: By creating products that are “born digital,” with an active digital identity assigned at the point of manufacture, brands create an owned-media channel that can deliver contextualized experiences to the end consumer —a critical differentiator in today’s mobile-first world. Consumers can simply scan a code on a product’s label or tag with their smartphone to receive valuable product information and access to personalized experiences. Meanwhile, brands receive real-time data intelligence from theh user, that they can use to drive future sales and marketing strategies.
The use cases are endless for brands. Item-level digitization creates a channel through which to share transparency data, such as product, ingredient and material provenance; authenticity verification; and sustainability information. They can also provide consumers with information about returns, resale and recycling options, including product buyback instructions. These identities can also be used to offer cross-selling and upselling recommendations, as well as to share news, offers, coupons and loyalty rewards with customers.
FN: Limited edition sneakers, and luxury goods in general, often find a second lease of life through resale. What role can these digital profiles play in keeping resale secure?
KT: The ability for consumers and marketplaces to authenticate items with the originating brand owner, at any point in the product lifecycle, is a major enabler for the secondary market. When a product’s active digital identity is assigned, there is only one authentic twin for the item that is housed in the cloud. If that twin identity shows up in multiple places at the same time, it triggers alerts. Connected-product technologies like ours give brands a powerful opportunity to extend customer relationships, acquire more insights and participate at an unprecedented scale in the rapidly growing resale market.
We are also working with brands on what we’ve dubbed “reborn digital” products and initiatives, meaning items that are authenticated and prepared for resale with active digital identities. Many brands are now buying back their own apparel items in an effort to participate in the secondary market and they need to ensure the authenticity of their products that are being resold.
FN: Are there any surprising use cases or benefits that brands should know about?
KT: Brands face fraud risks beyond just counterfeiting. Brand integrity is more often damaged by gray market activity. For example, a premium sneaker or luxury handbag may be “authentic” from a product perspective, in that it’s made with the trim, materials, labels, tags and logos that the company typically uses to create the item – but if the item hasn’t been commissioned by the brand, it’s considered part of the gray market. Product overruns and backdoor diversion are also significant issues for brands. By creating products that are born digital, brands are able to track each item through the supply chain and that, in turn, helps disrupt gray market activity.