In the Connected Products Economy Report, Caroline Brown comments on how the fashion industry is currently facing an opportunity to rethink the linear model by looking to a more efficient, sustainable and circular model for the future.
This week we are going to be sharing with you expert visions outlined in the Connected Products Economy Report. From Natasha Franck to Mats Linder Consultant, Ellen MacArthur Foundation, we take a closer look at their key message which focuses on how we can power circular business models, global transparency and new economic incentives to change patterns of production and consumption.
Unlocking value and catalyzing innovation at the intersection of people, products, and systems, the report presents an ambitious plan for how the industry can embed circular economy principles in connected products. Yesterday we featured words by Natasha Franck, the CEO and Founder of Eon, today, we focus on words by Caroline Brown Managing Director, Closed Loop Partners.
Caroline Brown is a Managing Director at Closed Loop Partners. In this role, she leads the practice for fashion and beauty across investment platforms. Caroline has spent over two decades in the fashion industry. Most recently she was CEO of Donna Karan International (DKI) and DKNY, for LVMH.
Every once in a while, we witness the transformation of a major industry. Driven by the development of smart technologies and changing attitudes, these moments present a meaningful opportunity for brands and consumers alike. Today, the fashion industry faces such an opportunity as it rethinks the linear model and looks to a more efficient, sustainable and circular model for the future.
Let’s imagine the economic benefits of a model which, instead of disposing of raw materials, allows for their recapture. A model that promotes an ongoing dialogue with customers keeps them close to the brand and creates an opportunity not only to sell but also rent, repair and resell again. Such a circular model would deliver the positive economic value of material reused, rather than the cost associated with materials lost. It would allow for greater margins on the resale of a product that does not require a new production cost. All of these are meaningful financial metrics and inherent in circular business models alongside environmental and societal benefits.
“When Products Become Intelligent, Brands No Longer Lose Sight, Connectivity And Relationship To The Product They Create Or The Customer Who Purchases Them.”
This model, enabled by visibility, aligns with the growing consumer demand for transparency. Intelligent products, embedded with smart technologies that carry knowledge and digital capacity to create a connected system, unlock the valuable economic incentives resulting from increased transparency and power, our capacity for such a transition. When products become intelligent, brands no longer lose sight, connectivity and relationship to the product they create or the customer who purchases them. The opportunities to generate revenue are no longer solely at the first point-of-purchase but rather available throughout an ongoing relationship of value delivered from the product to the customer.
Every day there is a new brand or retailer launching a resale, repair, rental, or recycling program, demonstrating the value of establishing an ongoing relationship between the customer and brand through products. As these programs become increasingly common, products need to become intelligent by adding a new digital layer that will underpin and transform this ongoing relationship between the brand, product and customer.
Brands that miss out on building circular models will also miss the opportunity to capitalize on their benefits. The current linear model simply requires growth by selling more – more production and more consumption, no matter the cost, is the measure of success. But in the future with intelligent products, the brand that is able to create one jacket, and sell that one jacket three times through recapture of its product, materials and customer relationships will undoubtedly win.