Skip to main content

The Connected Products Economy Is Nigh—Here’s How It’ll Work

Imagining a circular fashion economy where materials and resources are reused and repurposed, rather than landfilled, incinerated or otherwise cast to the four winds, is well and good. Achieving it is another matter altogether.

Enter the so-called “connected products economy,” an economic model where details about products are no longer captured in inconsonant and siloed databases but rather digitally coupled to the Internet of Things (IoT), allowing value-chain stakeholders to access the data they need to maximize value and drive truly circular systems.

That’s the vision detailed Monday in a new report by the CircularID Initiative, a collaborative effort, spearheaded by New York startup Eon, to create an open, industry-wide standard for a digital identity that can efficiently identify and authenticate products at every step of the supply chain.

Or as Natasha Franck, founder and CEO of Eon, explains it, products in our current linear model of take-make-waste are “lost,” meaning their maximum value isn’t being managed, monetized or recaptured after they’re sold.

Products in a connected products economy, on the other hand, are “no longer lost” but active nodes in a wider network, she wrote in the report. “Products are identified and connected to systems—enabling industry to capitalize on the continuous use and reuse of products and materials.”

Members of the initiative, including such boldface names such as Closed Loop Partners, H&M Group, Target, PVH Corp, C&A Foundation, Accenture, Microsoft, Waste Management, The Renewal Workshop, the New York City Economic Development Corporation, IDEO and I:CO, contributed their perspectives to the report.monet

Related Stories

Think of the CircularID as a “digital birth certificate,” one populated by data fields such as product name, brand, color, factory identification number and material content. By accurately maintaining a product’s attributes even long past the point of sale and across geographies, such a tag would be able to power reuse, repair and resale at a never-before-seen scale.

“Brands and retailers lack systems to maximize the full value of a product over its whole lifetime,” wrote Nicole Bassett, co-founder of The Renewal Workshop, an Oregonian company that repairs and refreshes excess inventory and unsellable returns from brands such as Mara Hoffman and The North Face. “This means the creative, physical, natural and financial resources that have been invested in products are lost when value still exists. This leads to massive waste problems with negative environmental impacts and significant financial losses.”

A CircularID, on the other hand, not only increases the speed and accuracy of processing garments for resale (whether on white-label or third-party platforms) but it can also help textile recyclers determine how to move garments through the right end-of-life channels for the production of new fibers.

“Efficiently, accurately and effectively identifying which solution is right for each garment passing through a sorting facility, especially a facility designed for scale and volume, is extremely challenging,” wrote Raymond Randall, managing principal of environmental services company Waste Management. “This is where CircularID fills a need in the marketplace because it can help identify the best use of old and used clothing by evaluating its embedded data against varying sets of criteria.”

A brand that wants its own garments back, for example, can task sorting equipment with identifying and separating those items for return to the manufacturer. Or if a textile recycler only accepted garments made with certain fibers, or without trims such as buttons or zippers, then a CircularID can signal to equipment to divert incompatible garments to more appropriate pastures.

For brands that wish to provide more transparency about their supply-chain practices—an increasing customer mandate—CircularID can create a “digital link to the factory or farm from the first to the last mile,” wrote Jill Standish, senior managing director for Accenture’s global retail consulting practice.

“Having an open record of a product’s provenance and journey encourages fashion brands to build and draw insights from a powerful knowledge capability and communicate it consistently to consumers,” she wrote. “This is the essence of transparency.”

Customers can also tap into the CircularID to access unique information about their products, access washing, care and end-of-life directions, provide feedback to brands about products through the products themselves or upload information to digital wardrobe applications.

“By choosing to submit their wardrobe and apparel usage data—overlaid with personal data collected via a personal data account—users can have more personalized shopping and planning experiences,” wrote Chris Grantham, executive director, circular economy, at IDEO, a design and innovation firm.

“This would include recommendations of new items to match with unworn garments, and options of renting, swapping or buying reconditioned items with a relatively high cost per wear,” Grantham added. “They could also opt to repair a loved item no longer in use, or decide to release funds to buy something new by reselling an old item.”

A CircularID Connected Product has three main components: a digital birth certificate with relevant data fields; a digital passport that includes a record of interactions with a product throughout its life cycle; and a physical identifier, such as a QR code or RFID tag, that remains attached or embedded within the product from the cradle to the grave.

At present, the initiative itself is “trigger agnostic,” so it doesn’t recommend any one form the hardware might take.

“Because of things like washability, you’re going to need different hardware for a swimsuit than a pair of jeans,” Annie Gullingsrud, chief strategy officer at Eon, previously told Sourcing Journal. “So it would vary depending on application and how it might affect customer experience.”

All of these elements will eventually come together as Eon pilots the CircularID Protocol with CircularID Initiative members and other industry partners throughout 2020. A public version is expected to go live sometime in 2021.

And while CircularID may not change the world, it may shape fashion’s future.

“Applying IoT solutions to garments is much needed to help address waste generation, driven by fast seasonal turnover, and falling clothing utility rates,” wrote Mats Linder, a consultant at the Ellen MacArthur Foundation, a British charity that promotes the circular economy as an economic imperative. “These technological innovations will be of great use to businesses wanting to rethink how we make clothes, as well as how they are sold and worn.”