How virtual clothes could help solve fashion's waste problem

Lablaco wants to use digital tools to revolutionize the fashion industry. (Source: Lablaco via CNN)

Fashion's ephemeral nature might seem an odd bedfellow for the blockchain, an online ledger that's designed to be permanent. But the industry is finding ways to harness it and other digital tools to reduce waste and push fashion into the future.

Italian company Lablaco is working with fashion houses and brands to digitize their collections in the burgeoning "phygital" fashion market — when customers buy both a physical fashion item and its digital "twin," designed to be collected or worn by avatars in virtual environments like 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 clothes rental service in 2021.

Pushing fashion into 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 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 the new owner can be assured of its authenticity and the item's creator can follow its aftersales journey.

"If you don't digitize the product itself, you cannot have any data to measure, and you don't know what's the impact of the fashion," Albrighi tells CNN Business.

CUTTING WASTE

The textile and fashion industry creates roughly 92 million tons of waste annually, and digital fashion could have a role in reducing that figure.

Kuo says digital spaces could be used as a testbed for the physical world. For example, a designer could release an item of digital clothing in 10 colours in the metaverse, and use the sales data to inform which colours to use for the real-world version. "It becomes automatically an on-demand model, which really can reduce the fashion waste," she says.

Trying on virtual clothes could also reduce the amount of clothes that are returned in the physical world, says Albrighi. He adds that staging 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 widespread, Albrighi says incentivizing designers is key. With the phygital model, the transparency of the blockchain could allow brands to receive royalties when an item is resold throughout its lifetime — a way to "produce less and actually earn more."

"It's the beginning of a brand new industry," he says.