The Era of Digital Product Tags Is Nigh

Offering solutions for resale, counterfeiting and more, digital IDs are poised to go mainstream.

In late May, Amazon opened its first clothing store in a sprawling suburban mall outside Los Angeles. Like most physical retailers these days, Amazon Style, as it’s called, aims to bring a little something extra to the brick-and-mortar experience, as some might do with plush coffee bars or rotating art installations.

Amazon Style, though, has technology. Each clothing tag comes equipped with a QR code shoppers can scan to see more details about the garment, like sizing, colors and customer ratings. Rather than wrangle an armful of jeans into a fitting room, customers can curate a list of pieces the’d like to try on or rather purchase directly. Clothes bought online can be shipped in-store, where shoppers can try them on and begin the process over again. 

It’s hard to argue with the convenience — but even more appealing, maybe, are those QR codes themselves, which supply consumers with a sea of information at their fingertips.

Retail analysts have been teasing digital product tags for years. London-based trend-forecasting agency WGSN, for one, began discussing them back in 2015, predicting they would hit the mass market by 2024. Amazon Style is the most widespread implementation to date, but slowly, fashion is catching on: Mulberry announced this summer it would be adding what’s called “near-field communication” (NFC) tags to all of its products by 2025, beginning with the pre-owned bags in its internal resale program.

Digital tags offer a whole host of benefits, from curbing counterfeiting to, in a perfect world, supporting transparency all throughout the product’s lifecycle. Yet this is technology that has to be implemented correctly, and with a commitment to use it in the long-term. In today’s supply chain turmoil, this may be easier said than done — but that doesn’t mean it’s not worth trying.

According to WGSN, there are two types of digital product tags that will reshape the retail landscape in the near future: radio-frequency identification, or RFIDs, which use radio frequencies to track and identify objects and will be a key tool for retailers’ back-of-house operations, like inventory tracking and real-time product location; and digital IDs, into which both Amazon Style and Mulberry’s efforts fall.

“We’ll see digital IDs really start to hit mainstream over the next few years, giving consumers highly detailed information about an item, from where the product has been and how it was manufactured, by simply scanning a QR code,” says Candice Medeiros, a strategist for WGSN Insight. “This could reshape current-day models and offer consumers more peace of mind.”

Currently, WGSN has found luxury brands to be leading the charge in this space, given that authentication is so invaluable for the luxury customer.

Consider Mulberry, which is rolling out its own NFC-enabled tags — powered by Product Cloud software platform Eon — as we speak. Its take on digital IDs enables customers to access a personalized digital guide about their item, featuring content and services around authentication, repair and resale. This, Mulberry believes, will create a direct and ongoing connection between the label and its customers for the entire lifecycle of the product.

“We take great pride in creating objects that are made to last, to be loved and passed onto the next generation,” said Mulberry’s CEO Thierry Andretta, in a statement. “Through the digital ID, Mulberry can offer customers increased transparency into the unique journeys of our products, deliver services such as lifetime repair, buy-back and resale, and ensure that every bag can have multiple lives.”

Indeed, Mulberry is intently focused on sustainability. A member of the Sustainable Markets Initiative Fashion Task Force, Mulberry aims to achieve net-zero status by 2035. In 2021, as part of its 50th anniversary, the house announced its Made to Last Manifesto, an ambitious commitment to transform the business to a regenerative and circular model, encompassing the entire supply chain, by 2030. 

Circularity, however, is fashion’s big white whale, the largest global logistics challenge the world over. Can digital tags help it get there?

Natasha Franck, Eon’s founder and CEO, created the platform in 2017 to help solve the most systemic barriers to sustainable business models in fashion retail. It became immediately clear, she recalls, that the underlying enabler to a truly sustainable — i.e., circular — industry was product identity: How could we turn physical products into intelligent assets that brands could monetize, increasing the profitability, intelligence and sustainability of each and every physical product?

“Today within fashion, brands are capturing a fraction of the value they possibly could from each product, and that’s why we’re seeing this tip of brands moving to uniquely ID each and every item for its entire lifecycle,” says Franck. “In a few months time, we’ll be looking back and thinking, Wow, I can’t believe that once upon a time, products didn’t have identities.”

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Eon’s technology works fairly intuitively: When consumers are done with their Alexa satchel, they can tap their smartphone on the piece’s RFID tag and be presented with a range of resale options via the brand’s in-house Mulberry Exchange; that bag’s new owner will have access to the item’s past lives, including how it was authenticated or if and how it was repaired. This, Franck explains, will help foster a new kind of relationship between brands and their customers. Right now, this is entirely transactional, ending at the point of sale. But digital IDs like Mulberry’s shift that interaction into something more intimate, rooted in ongoing, personalized service for that customer and that customer only.

Digital tags have use cases beyond commerce. Adrich, a smart-label platform that’s considered the world’s first consumption tracker, monitors product usage in real-time to enable timely replenishments of consumer packaged goods, from body wash to olive oil. With Adrich’s technology, product labels are able to understand that a bottle of hand soap, say, runs out after 20 pumps, reordering you a new bottle after 15.

“The technology has evolved at the same time the use case has evolved,” says Al Sambar, a general partner at XRC Labs, a New York City-based venture-capital fund and startup accelerator focused on retail technology that invested in Adrich earlier this year. “Say you’re inside your closet and you realize your denim looks faded and you want to reorder a new pair — wouldn’t it be nice if you had a code that could automatically make reordering available?”

It would be nice. So much so that, for shoppers, digital tags may soon make the leap from a nicety to something of an expectation. In fact, WGSN forecasts that on-demand expectations are set to increase, making it essential for retailers to invest in tools that give consumers more transparency around the location and detail of their merchandise. And amid ongoing supply chain disruptions, forged by the pandemic and geopolitical tensions, this technology is well on its way to becoming foundational for retail resiliency. The numbers don’t lie: New data from Adobe finds that consumers have seen over 60 billion out-of-stock messages in 2022 alone — a 235% increase compared to 2019.

“That’s done massive damage to consumer trust and loyalty,” says Medeiros. “Going forward, it will be important for retailers to invest in end-to-end inventory optimization.”

Aside from warehouses and fulfillment centers, RFIDs can be placed on cargo containers, which can ensure more precise visibility of their material flow. For mass retailers that have heavier fulfillment needs, Medeiros finds that these digital tags are helping to smooth unpredictable obstacles in the supply chain, as much as in consumers’ everyday wardrobes.

“In times of hardship, innovation thrives, and while a lot of this technology is not new, digital tags are providing tangible, real-time relief across the retail sector,” she says. “What’s great about these tools is that they take everyday touch-points and elevate the customer journey while also empowering them.”

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Source: Fashionista.com