Phygital Apparel: The Future of Sustainable Fashion

Have you ever wondered what people will be wearing in the "new normal?"

Face masks? A professional top and shorts during Zoom calls?

Don't worry. I've worn my pajamas in countless online meetings too.

But what about the fashion industry as a whole? Will it recover after two years of continuous disruption caused by the pandemic?

According to a McKinsey & Company report, global fashion sales are on track to pick up momentum in 2022. However, this growth will be uneven across countries, especially with the unpredictable nature of COVID-19 and its variants. The state of global fashion industry in 2022 will be characterized by new and persisting challenges such as the logistical difficulties that come with regulatory and trade hurdles. 

Customers have now become accustomed to super-fast delivery, both online and in-store, which means delivery delays strain customer satisfaction. Brands will need to balance the desire to enhance speed to market with the need to alleviate supply chain pressure. Overall, there is now a need to rethink sourcing strategies and implement cutting-edge supply chain management. 

McKinsey & Company also reported that the state of fashion in 2022 is also changing as consumers shift to the metaverse mindset.  Tech-savvy people from the younger generation like Gen Z were said to spend more time in digital environments like social media and online gaming. 

As they shift towards virtual realities in work and school, they also adopt multiverse identities along the way, which they use to engage with others and build communities. Aside from the appeal of a new environment, the Covid-19 lockdowns also exacerbated the need to connect with others online. The metaverse offers these digital communities new ways to interact, shop, and showcase their fashion styles online. 

Despite the changes, the fashion industry remains to be environmentally destructive with fast fashion leading the way. Geneva Environment Network reports that fashion production makes up 10% of humanity's carbon emissions, dries up water sources, and pollutes rivers and streams. The UN Environment Programme also stated that the equivalent of one garbage truck full of clothes is burned or dumped in a landfill every second. This shows a clear need to change the way businesses and consumers create and use apparel. 

Fortunately, there is a solution to the fashion industry’s rickety state: Phygitals.


So what is a Phygital? 

The term “Phygital” is a fusion of the words physical and digital. One example of this is Amazon’s use of augmented reality (AR) tools for customers who want to see what a piece of furniture looks like inside their homes before purchasing it. Phygitals take the best of both the physical and online realms to enable a whole suite of new product and apparel functionality.

Real Items takes phygitals further by pairing physical products with digital twins or NFTs. This integration allows for the extensibility and composability of everyday products. We pair physical products with NFTs using sensors such as Serialized QR Codes, Cryptographic NFC Chips, or Synthetic DNA Labels. These sensors can be scanned using any smartphone camera, giving users access to a product’s journey throughout the supply chain.

 

real items vechain shirt  phygital

 

By simply adding a layer of NFTs and digital services to physical products, we give businesses the power to track and trace their goods throughout the supply chain securely. According to the Harvard Business Review, blockchain enables faster and more cost-efficient delivery of products, enhances product traceability, and improves coordination between partners. Real Items utilizes blockchain technology which is inherently tamper-resistant to provide a trustworthy audit trail in the supply chain and protect enterprise products from counterfeits.

Since phygitals include NFTs, brands can bring their products to the metaverse. Imagine your online avatar wearing a digital version of the designer clothes you just bought. Now think about that avatar joining meetings and conferences in a virtual office. As consumers spend more time in digital spaces, fashion brands can unlock creative ways to engage with customers online.

Traditionally, the fashion industry follows a linear economy with no system to identify products beyond point-of-sale. Real Items phygitals bridge the physical and digital worlds and allow brands to see how their products are used after leaving the stores. Customers can also access a phygital’s digital twin and contribute online data to help businesses improve their product’s quality and recycling processes. On top of collecting data, phygitals allow brands to earn royalties from secondary sales. This encourages fashion companies to create quality apparel that lasts longer and reduces fast fashion’s environmental impact. In a nutshell, phygitals maximize a product’s value and material recovery, which supports a circular economy, and most of all, meet the requirements of the ESG metrics.

 

ESG compliance

ESG stands for Environmental, Social, and Governance. It is a metric that investors consider before investing in a company. ESG grew out of investment philosophies like Socially Responsible Investing (SRI). The Environment metric analyzes a company’s environmental footprint, Social examines the working conditions, while Governance looks into how a company is run and assesses if a company is transparent, independent, and respects shareholders. Investors integrate ESG factors into their investment approach to better assess risks and identify long-term investment opportunities. 

While there is no standardized approach to calculating or presenting the ESG metrics, BlackRock chairman and CEO Larry Fink shared in his 2022 open letter to CEOs that a tectonic shift towards sustainable investing will accelerate. Purpose-driven companies will be the ones to achieve long-term success as there is now a need to innovate to net zero. In just a few years, the automobile industry is racing toward an electric-fueled future, and soon, every sector will have a similar transformation. Those who fail to adapt will become extinct, while those who embrace the transition will thrive. 

In line with ESG, phygitals can track a company's waste management system throughout the supply chain. Fashion brands can now prove that their processes are sustainable and ethical. The information will be on the blockchain, which means it is decentralized and tamper-resistant. Once data is placed in the system, it cannot be easily manipulated, so errors can quickly be traced. This helps avoid biased self-reporting and encourages players in the supply chain to be responsible and take full accountability for their actions. 

Powering a Circular Economy

Bridging the physical and digital realms to get the best of both worlds is not a new concept. With the rise of the Internet of Things (IoT), companies have collected and exchanged data to unlock value and catalyze innovation. Real Items has created a system for enterprises to share information and contribute to a circular future. We do this by allowing stakeholders to efficiently identify and authenticate products for resale, repair, and reuse.

Real Items phygital technology lets brands and end-consumers access a product’s wide range of information to understand its life cycle and how to maximize the product’s value. Instead of throwing a piece of clothing away, you can access its data and discover new ways to reuse or recycle it— that’s one less piece of garbage in the landfill.

We also allow businesses and consumers to earn royalties from secondary sales. This incentivizes brands to continuously have assets traded between consumers while receiving royalties for the lifetime of the goods. In addition, phygitals help brands transition from making trendy apparel to creating clothes that last as long as possible. This, in turn, will encourage consumers to take care of the clothes they purchase and consider them products of worth, which creates a lesser chance to dispose of them. Phygitals allow brands to capture more value the longer something is in the market, so enterprises can now earn more money while contributing to a circular economy.

 

real items phygital supply chain

 

In Real Items, we value security and leverage NFT technology to use the blockchain fully. We envision a sustainable future where products are made with circular design intent and maximized value. We also help our customers grow their businesses through more capital by being ESG compliant, reducing friction with investors. Real Items technology is created with mindfulness— we always consider how it will affect businesses, the environment, and generations to come.

It’s time to welcome the new normal with clothes that are designed with sustainability and a circular economy in mind. These clothes will make a statement not just in the physical world but also in the metaverse. Let’s create economic growth without ecological destruction. Let us choose to go Phygital.

Be ahead of the curve. BOOK A DEMO with Real Items to see how you can turn your products into phygitals and get the best of both the physical and digital worlds. 

Want to learn more about phygitals? Follow us on Twitter or join the conversation with our community on Discord.  

Leave a comment

Please note, comments must be approved before they are published