Reinventing retail brands with “The Internet of Clothes”

Imagine having your own personal digital closet that lives in the cloud. Avery Dennison is taking a giant step forward by moving the “Internet of Things” to “The Internet of Clothes”.

                Imagine having your own personal digital closet that lives in the cloud. Avery Dennison is taking a giant step forward by moving the “Internet of Things” to “The Internet of Clothes”. By attaching a unique RFID or QR code to your apparel item, Avery Dennison will make your clothes be #BornDigital.

                Avery Dennison’s Retail Branding and Information Solutions (RBIS) business unit manufactures labels (hang tags, RFID labels, care labels) for most of the existing brands, retailers, and manufacturers in the apparel and footwear industry. Its business model has been tailored around their mission to “Elevate Brands and Accelerate Performance” for their customers [1].

                The traditional operating model has been to deliver value to customers through its existing global distribution network, reliable service, quality, and consistency. In terms of product innovation in the actual physical label, great strides have been done to advice its customers with the latest trends, but the reality is that there is only so much you can do in terms of the label’s physical design to elevate its consumer appeal and boost the value of the brand.

                In April 2016, in order to continue to add value to their customers in new ways, Avery Dennison announced a groundbreaking deal with the smart products software pioneer EVRYTHNG, which has built a leading IoT (Internet of Things) Platform called Janela [3]. The goal of this deal is that through this newly developed platform, Avery Dennison will be able to offer its retail customers not only a physical label but a digital one as well. GQ magazine calls this deal a forward step towards “The Internet of Clothes” [4].

               Over three years, Avery Dennison’s goal is to digitize a minimum of 10 billion apparel products for the leading brands and retailers, enabling them to revamp the end consumer’s relationship with the brand. As Deon Stander, Vice President and GM of Avery Dennison RBIS, mentions: “As a company that is involved right at the start of the life of a garment or pair of shoes, we are going to be able to activate an entire industry by bringing each item uniquely to life with its own digital identity” [5]

How will this benefit the operating model of Avery Dennison’s customers?

               At point of manufacture, an apparel item will be #BornDigital with a unique code (RFID or QR code) that identifies every single item individually. This code will stay with the item through each step of its life cycle, from factory, to retailer, to consumer and finally to recycle. This will allow better tracking of goods for a much better inventory control with a lot less waste. It will allow brands to have more control and operate responsibly in every step of the life cycle of its products.

What’s in it for the end consumer?

              The end consumers will be able to scan this code using their phones and add it to their digitalized closet. This will enable them to access personalized styling recommendations, content on how to take care of their purchased product, the story of where and when the garment was sourced and manufactured, recommendations on how to recycle it after end of use, loyalty points, curated clothing, and many other great features.

              With this consumer data, retail brand owners will be able to revamp their brand by: driving personalized campaigns, promote new products, offer smart targeted discounts, enable returns and reorders, secure brand protection and product authentication. The possibilities are endless.

What are the next challenges for the Avery Dennison/EVRYTHNG deal?

              Information is power and handing over data may come at a huge cost if consumers do not see a clear benefit that outweighs the risks. There are now many IoT platforms and all of them are fighting each other to become the prevailing one. How will EVRYTHNG’s platform achieve this when you already have other big players in the market?

             Data privacy will always be one of the biggest concerns for consumers. While technology keeps evolving to provide better data protection, so does the complexity of threats. For IoT companies such as EVRYTHNG, Jared Ho, an attorney in the FTC’s Division of Privacy and Identity Protection, says “We recommend that companies engage in ‘security by design’ which means they conduct regular risk assessments, and minimize the data that they collect and maintain, and that they test their security before launching a product” [6].

             Will this be enough for Avery Dennison and EVRYTHNG to be able to provide the end consumer assurance that his/her data is at no risk?

(764 words)

 

Bibliography

[1] RBIS Apparel and Footwear Branding. (n.d.). Retrieved November 17, 2016, from http://rbis.averydennison.com/en/home/our-solutions/apparel-and-footwear-branding.html

[2] Avery Dennison Corp Comparisons to its Competitors, Market share and Competitiveness by Segment – CSIMarket. (n.d.). Retrieved November 17, 2016, from http://csimarket.com/stocks/compet_glance.php?code=AVY

[3] Introducing Janela™. (n.d.). Retrieved November 17, 2016, from http://rbis.averydennison.com/en/home/our-solutions/apparel-and-footwear-branding/introducing-janela-smart-product-platform.html

[4]       H. (n.d.). The internet of clothes is here. Retrieved November 17, 2016, from http://www.gq-magazine.co.uk/article/internet-of-clothing

[5] Avery Dennison and EVRYTHNG switch on the Apparel industry with 10 billion products in world’s largest IoT deployment – EVRYTHNG IoT Smart Products Platform. (n.d.). Retrieved November 17, 2016, from https://evrythng.com/pressrelease/avery-dennison-and-evrythng-switch-on-the-apparel-industry-with-10-billion-products-in-worlds-largest-iot-deployment/

[6] Nordrum, A. (2016). Wanted: Smart Public Policy for Internet of Things Security. Retrieved November 17, 2016, from http://spectrum.ieee.org/tech-talk/telecom/security/wanted-smart-public-policy-for-internet-of-things-security

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6 thoughts on “Reinventing retail brands with “The Internet of Clothes”

  1. Thanks for the article!
    This seems like a very transformational change in the retail industry. Being able to track each piece of cloth allows great efficiency gains on inventory management and cost reductions. In addition, it opens a new world to database management and direct interaction with consumers to understand purchasing behaviors and influence higher frequency or average expenditure.
    My concern is how retailers will be able to use all this data to actually generate benefits to consumers. With so much information available, they will have to be very wise as to how use this data and truly create a differentiated business model. The first mover will definitely capture this value sooner and create a real competitive differential.

  2. Thanks for sharing – I had not heard of EVRYTHNG before your post. I agree with your view that “information is power and handing over data may come at a huge cost if consumers do not see a clear benefit that outweighs the risks”. My biggest concern with EVRYTHNG is that it depends on consumers adding items to their digital closets which takes an extra step of effort without solving for a real consumer need. In other words, you would have to offer considerable discounts for me to be willing to take the time to upload an item to a digital closet which also has privacy risks. While you acknowledge that privacy is a real risk for EVRYTHNG one thing I would point out is that there is a difference between consumer and retail spending habits. If shoppers are already uncomfortable with their purchases being tracked in a supermarket, I would imagine that retail items, which tend to be more expensive, could make some even more uneasy. For example, you might be less likely to splurge on an expensive item and upload this to your digital library if you thought there was a risk of others finding out how much you overpaid.

    Very interesting read though, wonder what the future holds for this company!

  3. Jorge, certainly Avery Denision is well positioned to digitize its labels. Customers are already looking at labels for size, care/wash instructions, and to see where the product is made. I wonder if these consumer use cases could create interesting partnerships for AD as opposed to simply providing a digital closet. The digital closet and styling information seems to be a ” nice to have” which requires the consumer to spend more effort rather than a “must have”. One application I immediately thought of was the washing and care instructions on the label itself. It is so easy to make a mistake when washing clothes and shrink or damage the clothing you bought. Imagine if your washing machine was “smart” and could “read” the digital label as you threw a load of laundry into the machine. The machine could be equipped with a slot where you feed the clothes in and it reads and sorts the clothing according to what kind of wash it optimal for its care. Suddenly white and colors sort themselves, oxy clean is automatically added to brights after so many washes, and the dryer knows not to turn on when you new black leggings have mistakenly been added. This is a convenience and solution that I would think consumers could get really excited about! Overall, my critique is that AD should consider use cases that help consumers solve common problems. Can you imagine the various equipment providers and CPG companies competing to be the firsts ones to have this partnership with their washing machines or detergent! It could be very profitable for AD!

  4. Interesting post! AD is the one better positioned to capitalize on this new trend as they already make labels for the retail industry. I can see this platform becoming a marketplace for peer-to-peer clothing sharing or peer-to-peer “thrift store” among friends. However, I agree with Maria that this idea will require change in consumer behavior, which is hard to bet on as we learned in marketing.

  5. This is a really interesting and innovative post! This idea of digitizing your closet is a first that I have heard. You are absolutely right that there is almost no way to track a cloth for the production company once its sold. With this technology, the production company can remain connected with its buyers even after the purchase has been made and the clothes have been worn. While concepts like renting clothes (Rent the Runway) and jewelry (Rocksbox) have already become popular, this could be the next step in the way people move to a more shared or a cloud based resource economy. The possibilities are endless!

  6. I find the thought of a digital closet to be quite fascinating. I think every woman knows what it feels like to be getting dressed on a Friday night and “have nothing to wear” despite standing in front of a closet full of clothes. Scanning your items and receiving personalized styling suggestions would be something many customers could benefit from, especially if EVRYTHING can also reduce the amount of time a customer has to spend looking for a new shirt to match an item she already owns by providing ideas. Additionally I am not too concerned about providing retailers with data about my clothes if it results in more clothes I like being manufactured. That being said, I am not a fan of location-tracking beyond point of sale, so perhaps the tag is something customers can remove once scanned into the digital closet. Perhaps EVRYTHNG could coordinate with retailers or credit card companies to have items purchased with a card automatically uploaded to a customer’s digital closet profile (with the option to opt out) to avoid the step of having to scan the item at home!

    Thanks for the interesting read!

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