Ralph Lauren Leads the Digital Transformation of its Industry

Achieves business agility and customer experience innovation through full product digitization -- Highlighted by the World Economic Forum for best practices

Last week Ralph Lauren revealed its partnership with EVRYTHNG. Working together, the global fashion and apparel leader is connecting its full product portfolio to the web — assigning each product item a unique Digital Product ID to generate real-time data intelligence throughout each product’s journey from manufacture to the end customer, and beyond. Beginning with the Polo brand, and involving hundreds of millions of individual products, the strategy — case studied by the World Economic Forum in a report published during the Global Futures Council meeting in Dubai last weekend — is proof of Ralph Lauren’s intent to Lead with Digital, and establishes a new competitive benchmark for the apparel industry.

 

Ralph Lauren’s Digital Transformation

Working with EVRYTHNG and our strategic partner Avery Dennison, Ralph Lauren is making every product item #borndigital with a unique Digital Product ID added as each item is made. A stitched-in label with a QR code specific to each item connects the garment with its Digital ID in the EVRYTHNG Product Cloud. The unique Digital IDs capture and apply information as each product moves through the supply chain, to the point of retail, and into the hands of the end customer. Consumers simply point their smartphone camera at the code on the label, authenticating the product, accessing information and engaging in digital services and experiences linked with the specific item. The experiences are dynamically tuned to their location, sales channel and other CRM or contextual information.

 

The scale, depth and ubiquity of Ralph Lauren’s product digitization strategy are ground breaking. By digitizing each item as its made in third-party production locations, Ralph Lauren is achieving unprecedented real-time visibility into its manufacturing operations. This creates better control of supply chain integrity, and provides the data intelligence needed to operate with more efficiency and agility. At the other end of each product’s journey, Ralph Lauren has a powerful channel for direct engagement with its end customers. The new Digital Product IDs allow Ralph Lauren to engage directly with customers with contextualized experiences and share product and brand information. What’s more Ralph Lauren now has the ability to gather real-time product data as each item travels through the global supply chain, to retail and into the hands of the customer, a critical step in a world where circularity in fashion is a goal.

 

Our role at EVRYTHNG is to:

  • provide Ralph Lauren with the global cloud platform to commission millions of Digital Product IDs as product items are made in partnership with labeling provider Avery Dennison,
  • gather and manage product data across the product life cycle, and
  • provide the tools to apply that data to facilitate Ralph Lauren’s operational objectives and to dynamically shape the end customer experience with each item.


An Industry In Need Of Digital

The global apparel market is expected to be worth $1.4 trillion by 2021 according to Ecomonitor International – a growth of 8.1% or over $100-billion from 2016. The US and China account for 42% of industry revenues, driven by purchasing power and scale, respectively. Yet despite the growth, the industry faces significant challenges with consumers demanding more transparency, changing sales channels and business models, counterfeit and parallel trade leaching incomes, and regulatory and consumer demands for sustainability that push toward more circularity in the supply chain and huge growth in the secondary market.

 

How to respond?  Like other consumer industries, the apparel industry has a fragmented supply chain with many brands relying on networks of production partners – predominantly in Southeast Asia and China – to produce their products. Effectiveness, integrity control and nimbleness in the supply chain depend on visibility of what’s being produced where and when.

 

Revenues lost to counterfeit across the clothing, textiles, footwear, handbags and watches markets amounts to $450 billion per annum according to Fashion Law, the lion’s share of a $1.2 dollar problem according to a 2018 OECD report. While gathering data intelligence to mitigate this problem, apparel brands also need to evolve their business models with faster cycles, more dynamic shipment, and shorter, faster runs to work with new sales channels. All of this requires a large scale mechanism to gather data from the point of manufacture.

 

At the same time, consumers are looking for new and authentic brand experiences and the convenience of on-demand services, while demanding transparency and sustainability. Where did an item come from?  What is it made of?  What are the credentials of its production?  The challenge: Even if a brand puts in the effort to do all the right things during sourcing and production — making that information accessible to the consumer hasn’t been easy — there is only so much space to communicate on a hangtag or a label after all.

 

Growth in the secondary market — the resale of used products and/or the rental of products to consumers enabling re-use — is growing massively and presenting new challenges. Most painfully illustrated by The RealReal’s recent problems with counterfeit products. It’s tough to manage brand integrity later in the product life cycle and until now, almost impossible for brands to play a key role after the point of initial purchase. Digital traceability provides a compelling opportunity, making it possible for each item to be tracked and authenticated at any point in its life cycle, thereby providing important tools for a robust secondary market and the creation of new business models that need to track products between multiple owners or users.

 

Finally, the apparel industry – which is the largest consumer of water outside of food production – has talked a great deal about circularity. The concept of recovering fabrics and materials for re-use in making new items is tremendously appealing. Yet it’s a vision that largely remains aspirational. A key reason is the difficulty in capturing source information. Unless recyclers can access information about the fabrics they are sorting they can’t economically separate materials to make circularity possible. A digital identity traveling with an item and carrying information about its composition can help to address this problem.


Data Across the Product Life Cycle

The World Economic Forum has case studied Ralph Lauren as an example of advanced manufacturing with its application of data sharing across the supply chain. As a recent McKinsey study identifies, the supply chain is fundamental to performance improvement. The fine grained data that can be generated through internet of things technologies, and the methodologies to share data across the supply chain, are market leading strategies highlighted by the World Economic Forum’s Centre for the Fourth Industrial Revolution.

 

The end-to-end digitization program implemented by Ralph Lauren provides a powerful example. Ralph Lauren’s Digital Product IDs linked to each product item enable data to be captured and shared as product items move from manufacture to distribution to retail and to the consumer. Operating as a ‘digital twin’ for the item in the cloud, the digital identity is accessible via the web and able to build an aggregated data set of the product’s journey. This methodology of data sharing creates visibility not previously possible, and with the application of adaptive analytics and machine learning, makes it possible to apply data in real-time for business efficiency and dynamic personalization.

 

Data about the product journey can be generated after the point of purchase as well, with consumers able to interact with products — on a consent basis — to authenticate products and access product information. This provides Ralph Lauren with a powerful means to ‘crowd source’ traceability information in the field, helping to authenticate products, identify gray marketed products, and gain real-time insights on retail trends and consumer behaviour.


Pointing the Way

It’s hugely exciting to be playing a central role in Ralph Lauren’s digital strategy. By putting an end-to-end product traceability and data generation capability in place, Ralph Lauren is creating an innovation platform based on the application of data-driven intelligence. While we can clearly point to specific applications like factory visibility and consumer engagement as immediate areas of value creation, it’s the ability to apply real-time knowledge to every area of Ralph Lauren’s operations and its customer experience that is the long-term opportunity Ralph Lauren has created for itself, and the reason brand owners across all consumer markets should pay attention.


Niall Murphy, CEO and Co-founder, EVRYTHNG

 

Press Contacts:
Susan Baldwin

EVRYTHNG
susan.baldwin@evrythng.com
+1 (509)939-1137

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