Adam Gold,

In 2015, e-commerce consumer packaged goods (CPG) sales grew 42 percent ahead of overall growth in e-commerce, with the industry’s boom driven largely by online retail, including Amazon subscription sales, which more than tripled.

But despite the overall success of the CPG market, which is predicted to reach $36 billion by 2018, the sales figures tell a bigger story. Between 2011 and 2015, $18 billion in market share shifted away from large CPG companies to smaller players. And in 2015, 90 percent of the top 100 CPG brands lost market share, with 62 of them experiencing declining sales.

As big CPG brands are growing slower than the industry at large, the market is instead being led by smaller brands, with whom the giants are struggling to compete. While the industry has always been very competitive due to high market saturation and low consumer switching costs, the competition is even more intensified online. This is because online retailers have created an even playing field, where brands of all sizes can compete equally for the same customers. On Amazon, advertising space is virtually unlimited, meaning that more advertisers are competing for attention. This offers brands endless “shelf-space,” allowing smaller brands to compete with their larger competitors right at the point of sale.

Let’s look at the US diaper market as an example, where P&G (44 percent market share) has long been locked in a battle with Kimberly-Clark (37 percent market share). Now, their Pampers and Huggies brands are facing competition from smaller players like Bemax, a distributor of private label disposable diapers, which has plans to launch on Amazon this month. While Bemax is a relatively small company (having brought in $538,738 in 2015), it represents the larger threat e-commerce poses: opening the doors for challenger brands to outdo the likes of Huggies and Pampers by undercutting them on price.

Moreover, online retailers serve to disintermediate brands, owning customer data and relationships. (And that’s not even mentioning the fact that Amazon is starting to steal market share with its own private label CPG brands such as Mama Bear baby products.)

If big CPG brands want to avoid fighting a price war on Amazon and retain market share, they must seek our direct access to their customers via owned direct-to-consumer (DTC) channels. Some brands have found that by selling directly to consumers, they’re able to control the customer experience, build stronger relationships and collect valuable customer data that leads to powerful insights for product innovation, as well as for the personalized shopping experiences more and more consumers are beginning to demand from brands.

As part of this DTC strategy, CPG brands have an opportunity to digitize their physical products, turning them into new sales channels and creating a smarter product-as-a-service model. Considering that one of the major differences between big CPG players and their smaller counterparts is the sheer volume of products they put out into the market every day, this product digitization presents a huge competitive advantage.

Moreover, by taking control of each physical product pack as smart, digital media, CPG brands can unlock new value throughout the entire product lifecycle, using real-time data to build an IoT ecosystem around their products and power applications that transform everything from their supply chains to their sales, marketing and customer relationships.

As CPG brands look to regain market share and win out online, they need to create a direct link to customers to gather consumer behavior data, open up cross and upsell opportunities, and build long-term, higher value relationships. If big brands want to worry less about disruption from the smaller, digitally native players, it’s time to get smart about DTC.

Adam Gold is VP, Enterprise Solutions, CPG at EVRYTHNG.

To learn more, please get in touch.

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Dominique Guinard,

The heatwave generated by the blockchain revolution hasn’t spared the IoT field. While there are a number of blockchain use cases that just don’t make sense (such as controlling smart home devices), we are particularly interested in its potential impact on product traceability.

Some of the unique properties of blockchain technologies could be very useful tools to help fix a number of inefficiencies in the supply chain. In particular, the immutability and decentralization can help fix the growing distrust within supply chains and between consumers and brands.

Not idling on these ideas, we’ve launched a number of EVRYTHNG Labs activities. Concretely, we are working on several pilots with our customers on practical guides to evaluate blockchain solutions, while also creating bridges between the blockchain and EVRYTHNG.

Supply chain traceability services are not inherent to blockchain solutions, and we have been successfully providing such services to a number of big brands. Here, we’d like to talk about a proof of concept to leverage blockchain technologies for existing supply chain tools. With this service, we’re showing that transactions in the EVRYTHNG platform could be backed by a blockchain. This could be used to reinforce the immutability and distribution of transactions, which could be useful for use cases regarding distrust. For example, this can be used in product provenance applications (studies have shown most US citizen do not trust organic or artisanal labels) or for regulatory compliance (GDP2013/C343/0 states that a deviation of temperature within the supply chain of a drug should be reported to the distributor and recipient).

Transactions in the EVRYTHNG platform are modeled as Actions (according to the W3C Web Thing model), mostly using the standard EPCIS terminology. As an example, moving a pair (or pallet) of shoes from distribution to a store is an Action on the uniquely identified pair of shoes (Thng), performed by the distributor (source) designated to an actual pair of shoes (destination). Such a transaction is authenticated via API keys and certificates and recorded in the EVRYTHNG platform, where applications can consume it via APIs. So, in essence, this could serve product provenance or be used as a basis for regulatory compliance.

But what if the brand decides to modify this data after the fact? This is where the blockchain can help: transactions in a blockchain are immutable.

Thanks to EVRYTHNG’s Reactor, we can illustrate how to “certify” this transaction via a blockchain. We created a Reactor script that creates a secure hash of an EVRYTHNG Action and pushes this as a transaction in the Bitcoin or Ethereum blockchains. After about ten minutes, the transaction is accepted by the Bitcoin system and validated by a number of Bitcoin participants (miners) before being permanently added to the blockchain. A blockchain bridge service running on the EVRYTHNG side captures this event and creates a new Action containing the reference to the Bitcoin transaction. The Action is now certified by the blockchain, it can be audited by anyone and any modification could easily be spotted (the Action hash would become different from what was recorded on the blockchain).

This is a relatively simple example of the power of a blockchain. However, it is also important to note that implementing supply chain traceability, product provenance, or product authenticity does not necessarily need a blockchain solution. Blockchain technologies are still in their infancy, and the relative immaturity and heterogeneity of the technologies make them quite a risky bet. Hybrid approaches are a safer model, since they can leverage the potential of several blockchains while maintaining the data in proven platforms. EVRYTHNG is definitely playing in this space, and we will gradually release new tools for integrating our centralized system with an increasing number of blockchain solutions.

Andy Hobsbawm,

The International Data Corporation (IDC) recently reported that 102.4 million wearable devices were shipped in 2016, representing 25 percent year-on-year growth. Despite this, innovation has slowed in the sector, with wearables being definitively “out” at Mobile World Congress this year.

But the market won’t stay this way for long. Wearables as we know them are on the verge of becoming more truly “wearable” than ever before as they become invisibly stitched into our everyday wardrobe. As fashion designers and mainstream clothing brands begin seeing the value of making their garments smart, we’re entering the next evolution of fashion technology: connected clothing.

Fit Fashion

Currently, the biggest wearable market drivers are health and fitness. For the second year in a row, Fitbit owns the largest market share thanks to its recent acquisition of Pebble and its existing line of more conventional wrist-worn fitness trackers. And with good reason. Health is the primary reason consumers purchase a wearable device, and 45 percent of wearable owners are sporting fitness bands. So it’s no surprise that apparel brands are using smart clothing to relay information about fitness and health back to their customers.

At Paris Fashion Week last fall, British-Cypriot designer Hussein Chalayan partnered with tech giant Intel to bring something new to his Spring/Summer 2017 show. As models walked the runway, visual projections showed their stress levels on the wall beside them, via biofeedback being sent from the connected accessories they were wearing.

The problem is that while wearables work well for fitness fanatics and make decent pieces of runway theater, they’re not becoming an essential item for everyday consumers. The smartwatch revolution didn’t create another universal “must-have” product like the smartphone, and a report from PwC recognizes that “over time, fewer consumers use their wearables daily,” evidence that this technology isn’t becoming habitual or part of our daily routines.

Integration with the wider digital ecosystem of other products and services can help. Amex and Jawbone partnered to integrate NFC payment into wristband trackers, for instance. More compellingly, health insurance programs like Vitality from Discover offers a sophisticated rewards program and discounts on your healthcare premiums if you share your wearables data with them.

Seamless Experiences

But the real opportunity is not to create new wearable products, but to fold new smart, digital technology back into existing apparel products. Thirty-six percent of the respondents in PwC’s survey said that wearables should be “an important part of my wardrobe/outfits.” What better way to seamlessly fit wearable technology into your wardrobe than with smart apparel? By digitally-enabling clothing that they already sell—and that customers already love—brands can become an integral part of people’s everyday digital lives.

And the technology and processes already exist to do this—at massive scale. Last year, EVRYTHNG partnered with Avery Dennison RBIS to enable more than 10 billion apparel and footwear products to be #BornDigital™. In a bid to “switch on” the apparel industry, we’re embedding unique digital identities into individual physical products right at the point of manufacture—connecting them to the Web via smart labels and tags that can be scanned by smartphones and RFID readers. This gives brands the ability to unlock new value with various digital applications, experiences and analytics.

Download our ebook to learn more about #BornDigital™ apparel.

Recently, fashion designers Rochambeau and Rebecca Minkoff have leveraged the power of #BornDigital™ to turn their products into an owned digital media channel and to create more valuable, direct consumer relationships.

The Rochambeau BRIGHT BMBR contains a smart tag that allowed the jacket’s wearer to unlock exclusive experiences in dining, art, nightlife and fashion, including a digital pass to the designer’s Spring/Summer 2017 New York Fashion Week runway show.

Ahead of her Spring/Summer 2017 Fashion Week show at The Grove in Los Angeles last month, Rebecca Minkoff unveiled the world’s first smart bag with a run of limited edition #AlwaysOn Midnighter bags. Each came with a hangtag that allowed buyers to unlock a VIP ticket to the runway show, in addition to other exclusive offers and experiences.

We’re already well on our way to realizing the #BornDigital™ wardrobe of the future, which will empower brands to create unique experiences and personalized content for their customers, all while accessing valuable new insights and the ability to optimize their product operations.

We don’t need to buy and wear another gadget. We just need the clothes we already wear to get smarter.

To learn more about #BornDigital™ apparel, please get in touch.

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Simon Jones,

The global infant nutrition market is massive. Zenith estimates the market is worth over $50 billion, and it is forecasted to be the fastest growing packaged food category over the next five years, achieving growth in excess of 7% per year. It’s also a resilient market. Despite the economic downturn in 2009, when the global economy took a nosedive, the infant nutrition category grew by 7% in value, and it is showing no signs of slowing down.

The category is particularly strong in China. According to the Dairy Companies Association of New Zealand, the Chinese milk formula market was worth a staggering 682.7 billion Yuan ($99 billion) in 2014, and it is expected to be even bigger in the coming years.

However, while infant nutrition is burgeoning in China, the market is also struggling to demonstrate brand and supply chain integrity, amidst high demand for imports of trusted brands. Last year, Chinese authorities arrested a gang suspected of manufacturing and selling more than 17,000 tins of counterfeit baby formula in several provinces across the country. Currently, infant formula manufacturers are investing a great deal of time and money on packaging solutions to combat counterfeiters, who are buying cheap baby formula and adult milk powder, then packaging it in fake tins of well-known brands.

The problem: These existing expensive, often limited anti-counterfeit solutions use proprietary systems to read barcodes or special inks, meaning consumers are shut out of the authenticity process and don’t know if the infant nutrition product they’ve bought is genuine.

Infant nutrition brands need a smart, digital product authenticity solution that bridges the gap.

This is precisely what EVRYTHNG provides. We’ve partnered with the world’s leading packaging companies to embed digital identities at source, making it simpler for billions of infant nutrition cans to become smart, digitally-enabled products. These #BornDigital products are manufactured with a software identity connected to an intelligent cloud platform that stores and manages data throughout the entire product lifecycle, allowing brands to efficiently solve product authenticity and traceability challenges on an industrial scale.

Now, infant nutrition brands can put a code on their packaging that serves as a digital trigger, encouraging consumers to scan the mark with their smartphone in order to verify that the product is indeed authentic–an action parents are likely to follow to ensure they’re protecting their children’s health and safety. This consumer-product interaction also simultaneously sends data back to the brand to let it know if a product has been copied or scanned in the wrong market, effectively “crowdsourcing” anti-counterfeit and brand production efforts.

Rather than waste time and money with separate solutions for anti-counterfeit and consumer engagement, infant nutrition brands can now bridge the divide with a single smart solution that serves both purposes. By embedding digital intelligence into packaging, brands can transform their products into trackable, interactive assets that engage customers, give parents peace of mind, win trust, and deliver end-to-end traceability across the value chain.

Simon Jones is VP, Enterprise Development at EVRYTHNG.

To learn more about how IoT smart products and packaging technology can help solve product authenticity and traceability challenges, please get in touch.

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Frederik Armbrust,

Recently, the fashion industry has been shifting toward a “see now, buy now” model, wherein the latest styles are immediately available for purchase as they’re unveiled on the runway. Although the shift has caused a surge in sales for some brands, it’s also put a serious strain on supply chain logistics. But with better inventory management through an IoT-enabled solution, brands can make “instant fashion” a reality now, rather than in the future.

Transforming Production Cycles

Traditionally, it would take around six months for a designer’s fresh collection to hit the shelves after debuting at a fashion show. But this has caused issues for luxury brands, as it then gives the mass-market labels time to “take inspiration” from the luxury designers. Within this period, fast fashion brands are able to produce similar, if not identical, designs that hit stores at around the same time as, or even before, luxury labels.

The “see now, buy now” model is essentially the luxury fashion industry’s way of giving fast-fashion a run for its money, making the real thing available before the copycats.

Burberry was the first major brand to test the concept, in September 2016. At the time, the British label’s creative director, Christopher Bailey, announced the firm would debut a “seasonless” collection combining both men’s and women’s wear, with pieces of the collection available across brick-and-mortar stores and online the following day. In the same month, Ralph Lauren, Tom Ford and Tommy Hilfiger followed suit, presenting their first immediately-shoppable runway shows.

Despite the considerable restructuring costs associated with the new model, the concept proved successful. Tommy Hilfiger’s chief brand officer, Avery Baker, claimed web traffic to increased by 900 percent in two days of unveiling the new, appropriately-named collection, “Tommy Now.”

Logistics Nightmare

Today, fashion brands have seen much success thanks to the “see now, buy now” model. Take Italian luxury fashion house Moschino, whose business is now made up of 10 percent “see now, buy now” sales. However, while it’s a growing trend in the fashion industry, offering customers the entirety of a collection to purchase right away, it doesn’t come without challenges. In particular, without having the time to gauge which garments will be in demand once a collection launches, as you would with the traditional model, there’s the potential problem of sitting inventory, meaning that some items that never make it to sale. And as Jane Hali, CEO of retail research investment firm Jane Hali & Associates, notes, sitting inventory, which is just taking up space and wasting money, is a huge cost to brands.

Said Jane: “As having been a buyer for most of my career, I can tell you: The later you order the merchandise, the smarter you are. If you have long lead times, you’re not going to make the right decisions. You can’t have a warehouse full of inventory just sitting around until a customer is interested.”

Fashion house Tom Ford has run into similar problems, having to keep clothes off the racks until the day after the show, losing a full month of selling with merchandise just sitting in the stockrooms. In March this year the company announced that it was pulling out of the “see now, buy now” model, citing “a logistical nightmare” thanks to misguided delivery timing.

Inventory Management

Underlying the “logistics nightmare” of “see now, buy now” is the challenge of inventory management. The good news is that this can readily and easily be solved for brands through an Internet of Things (IoT) solution that offers increased visibility and traceability, while providing greater analytics and creating one-to-one connections with end-consumers.

By giving individual apparel products unique digital identities, managed by an intelligent cloud platform, fashion brands are able to better understand demand trends and improve their inventory management to make “see now, buy now” possible. Smart product technology connects anyone throughout the supply chain to each unique item and gives greater insight into where that item needs to be at every step along the way.

As an example, let’s say a customer living in New York City is watching the Ralph Lauren runway show via an interactive video. The customer sees a t-shirt she wants to buy, so she clicks on it. And because the brand knows her geo-location, Ralph Lauren ships it to the SoHo store vs the Madison Avenue store. Rather than ship a thousand t-shirts to New York blindly, the brand can understand consumer demand in precise locations and anticipate how many will actually sell (and where), allowing for more precise and agile delivery.

Fashion brands no longer have to worry about inventory wasting money. With greater product visibility and data through EVRYTHNG’s technology, brands can keep inventory in a distribution center and be smarter about diverting their products based on demand location.

The “see now, buy now” model is still very much in the experimentation phase, with brands working out what works best for them. But we know that consumer demand and technology will only advance. It’s safe to say that this is a trend that won’t be going away. And with better inventory management, “see now, buy now” can be a dream for fashion brands.

Frederik Armbrust is VP, Enterprise Solutions, Apparel and Footwear at EVRYTHNG.

To learn more about how IoT smart products and packaging technology can help solve inventory management challenges, please get in touch.

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