Merging of reality and virtuality: advantages of the phygital mode

• "Phygital" fashion: the merging of the physical and digital worlds in the fashion industry
• Challenges facing the fashion industry: environmental impacts and the need for radical change
• Example PlatformE: integration of blockchain, service-based model and production on demand

Phygital fashion: challenging the digital transformation

The digital transformation has challenged the fashion industry, affecting not only the design and production process, but the entire supply chain and everyone involved. The term "phygital" describes a merging of the physical and digital worlds and represents a new reality for the supply chain, where brands design, produce, present and sell fashion in innovative ways. From a circular perspective, "phygital" fashion is viewed as clothing that is not only durable but also reusable. Digital transformation combined with a "phygital" approach has the potential to transform the fashion industry into a true "powerhouse for good".

The process change

There are three main types of digital circular business models: service-based models, blockchain-based supply chains, and on-demand production. The production-on-demand model has the potential to shift the economy from economies of scale to flexibility, transforming the entire process of predicting, producing and consuming fashion items.

Rising consumer demand for sustainable clothing has sparked industry interest in blockchain technologies and solutions such as NFTs and digital passports that can provide transparency, sustainability and circular authenticity. Physical garments are combined with NFTs as digital twins, and consumers have access to information about their garments' journey through the supply chain.

Traditionally, the fashion industry has not had a system to track products after sale, but a "phygital" approach can increase product longevity and physical value, and support a circular economy. The data collected helps improve quality and recycling processes by maintaining a connection to the product after it leaves the store, and digital twins also enable brands to achieve secondary sales.

Phygital Best Practice Platform E

PlatformE, for example, is a technology company that markets this approach. The company's mission is to dramatically reduce overproduction and waste in the fashion industry by providing luxury fashion brands with the tools to move from a mass-produced model to a made-to-order model. This includes the production and sale of virtual garments, as well as the on-demand production of the physical version.

Digital product development and digital sales enable garments to be made only after they have been sold. This avoids the biggest cost and environmental aspect, namely large inventories. This means that the traditional "push" system is transformed into a "pull" system, allowing for timely on-demand production and ensuring a sustainable approach.

PlatformE works with brands to digitize collections and to support the process of selling the digital assets and producing them on demand. Their technology is designed to connect the 3D asset at the point of sale, which means they also provide brands with blockchain-based capabilities such as B. NFTs to guarantee the authenticity of their products.

Benefits of Phygital Concepts

Phygital modelling, which encompasses the merging of physical and digital elements in the fashion industry, offers a multitude of benefits:

1. Seamless shopping experience: Phygital Mode allows customers to shop both online and offline, creating a seamless shopping experience. Customers can try on products in stores and at the same time display additional information using digital technologies.
2. Personalization: By combining data from online and offline interactions, brands can better understand their customers' preferences and needs and provide personalized offers and recommendations.
3. Interactive shopping experience: Phygital concepts offer interactive elements such as virtual fittings or augmented reality mirrors that make shopping a fun and engaging experience.
4. Omnichannel Strategy: Phygital Mode enables brands to implement an effective omnichannel strategy, leveraging the advantages of both brick-and-mortar retail and online commerce to target customers at different levels.
5. Extended range: The integration of digital elements expands the reach of fashion companies as customers from all over the world can interact with the brand online.
6. Efficient warehousing: By connecting online and offline channels, inventories can be optimized and demand can be better forecast, resulting in more efficient warehousing.
7. Innovation and brand image: Phygital models allow fashion companies to position themselves as innovative and future-oriented brands that integrate new technologies and concepts into their business strategy.
8. Data analysis: The digital component enables companies to collect, analyze and use extensive data about customer behavior to make informed business decisions and optimize their marketing strategies.

Overall, Phygital concepts enable the fashion industry to blur the lines between the physical and digital worlds, offering improved customer engagement, personalized offers and innovative shopping experiences.

Classic pillars of the fashion industry in transition

The digital transformation has the potential to fundamentally change the fashion industry and make it a more sustainable and efficient industry. By combining digital and physical elements, fashion companies can optimize the supply chain, reduce resource consumption and promote a circular economy. Innovative companies are already showing how digital circular business models can be successfully implemented and have a positive impact on the environment.