How virtual clothes could help solve the problem of fashion waste | CNN Business

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CNN
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The ephemeral nature of fashion may seem like an odd bedfellow for the blockchain, an online ledger designed to be permanent. But the industry is finding ways to leverage it and other digital tools to reduce waste and propel fashion into the future.

Italian company Lablaco is working with fashion houses and brands to digitize their collections in the growing ‘figital’ fashion market, where customers buy both a physical fashion item and its digital ‘twin’, designed to be collected or used by avatars in virtual environments such as the metaverse.

Lablaco was founded in 2016 by Lorenzo Albrighi and Eliana Kuo. Both had backgrounds in luxury fashion, but were looking to improve the industry’s sustainability credentials and promote circular fashion – the practice of designing and producing clothes in a way that reduces waste.

The pair launched the Circular Fashion Summit in 2019, and Lablaco worked with retailer H&M to introduce a blockchain-based clothing rental service in 2021.

Fostering fashion in digital spaces helps generate data that is vital in efforts to move toward circular fashion, they argue. With Lablaco’s model, physical and digital items remain paired even after the sale, so if a physical item is resold, the digital equivalent is transferred to the new owner’s digital wallet. The transparency of blockchain technology means that the new owner can be sure of its authenticity and the creator of the item can follow its after-sale journey.

“If you don’t digitize the product itself, you can’t have any data to measure and you don’t know what the impact of fashion is,” Albrighi tells CNN Business.

The textile and fashion industry generates approximately 92 million tonnes of waste annually, and digital fashion could play a role in reducing this figure.

Kuo says digital spaces could be used as a test bed for the physical world. For example, a designer could release a piece of digital clothing in 10 colors into the metaverse and use sales data to inform which colors to use for the real-world version. “It automatically becomes an on-demand model, which can really reduce fashion waste,” he says.

Trying on virtual clothes could also reduce the amount of clothes that are returned to the physical world, says Albrighi. He adds that organizing fashion shows in virtual spaces reduces the need for the fashion world to travel. Both interventions have the potential to reduce the industry’s carbon footprint.

But for these innovations to become mainstream, Albrighi says incentivizing designers is key. With the phygital model, blockchain transparency could allow brands to receive royalties when an item is sold over its lifetime, a way to “produce less and earn more.”

“It’s the beginning of a new industry,” he says.