“I can imagine how we will use technology to fix what I think we can all agree on in the fashion industry: a pretty broken system,” says Kenneth Loo in a conversation with FashionUnited about the future possibilities of Web3 and new Technologies. The co-founder and CEO of communications company Chapter 2 envisions an industry where players can clearly see the benefits of the secondhand market and resale value, supported by a higher level of transparency enabled by a more robust blockchain.
Loo’s company only entered this sector about two years ago, having already established a strong foothold in the world of fashion and supply chains, which he believes flow seamlessly with ongoing developments in new technologies. Chapter 2 has an impressive fashion client list and has worked with companies such as Nike, Filling Pieces, No Sesso, Puma and Huf. The list of new technology clients is also extensive and is complemented by names such as 9dcc, The Fabricant, Mason Rothschild, Trame and Ledger, all influential players in the world of digital fashion and Web3.
Direct gatekeeping for fans
Loo’s enthusiasm for the future of this sector stems from the fact that such projects offer more opportunities for engagement between consumers and brands. He believes this will be especially the case with the upcoming transition from direct-to-consumer (D2C) to direct-to-fan (D2F), an approach that differs from traditional direct selling. “A D2F mentality is about how you turn that person into an ambassador,” explains Loo. “How can I get them to become our most important customer?”
At its core, it’s about combining different technologies that are in use today and, according to Loo, will help create a dynamic that allows loyal customers to benefit from their engagement. Technologies we are already familiar with, such as artificial intelligence (AI), emerging technologies, blockchain and non-fungible tokens (NFTs) – an element, incidentally, that Loo says was poorly branded at the start and will therefore see a rebirth – could come together, to create new ways of engaging and interacting with audiences. “The consistency of programs based on new technologies is starting to evolve from brand to brand in terms of how they want to use these types of technologies as a means of access,” said Loo.
Loo explains these features, starting with the “Access Passes” – the brand’s NFTs – which act as a door opener to Token Gate content, discounts and events, moving away from the original idea of NFTs as digital works of art and instead embracing the technology a means of rewarding loyalty. Evidence of such features has already been adopted by companies such as Diesel and Louis Vuitton, both of which have launched initiatives that allow their fans to purchase NFTs and thereby gain access to exclusive shows or products.
Digital twins replace receipts
Another development that Loo expects is the development of the “digital twin” – a term coined for products that have a blockchain-based presence and therefore exist in both the digital and physical worlds. He linked the emergence of this feature to the overproduction of clothing, the increase in counterfeit goods and the integration of EU regulations, one of which will soon require the introduction of digital passports and therefore digital twins for brands operating in the EU.
“Digital twins will provide the ability to authenticate real-world products and at the same time provide those products with much greater utility,” said Loo. In his opinion, these benefits can come from promoting digital fashion offerings that can be worn in online worlds. to functioning as a receipt at certain points in the customer journey and replacing the physical element.
Loo also sees an opportunity to change the current processes in the industry: “I think what will happen is that we will finally have success with the pre-sale model, because that is something that fashion has been missing for decades. You can start a pre-sale and no one will buy it until the product is manufactured. What we’re seeing now is the ability to pre-purchase something and get a digital fashion product that comes with utility. The asset will captivate you, engage you and get you excited about your purchase and the brand you have grown to love, while the physical product is still being tailored, produced and delivered.”
Today, products are being improved with innovative additional benefits. With the introduction of digital twins, the supply chain will be connected from seed to shelf and now to infinity. Factories are incorporating digital twins early into the manufacturing process, a trend accelerated by the pandemic and the increasing use of computer-aided design. The digital twin can be created when the sample collections are created. This allows manufacturers to use digital twins as a tool for inventory tracking and identification, linking the product from the point of sale and taking advantage of coveted royalty opportunities on resale.
“Here I see us making strong progress with the promise that blockchain will accelerate sustainability and waste management in production. By creating the digital twin from the beginning of product manufacturing and then using it as an inventory marker. Then, as the product gets closer to the shelf, that asset is equipped with more and more capabilities, providing a space to entertain customers while they wait for the product to be ready,” Loo concluded.