Blue Bite CEO & Co-Founder Mikhail Damiani discusses how fashion brands can easily connect directly with consumers, both before and after the sale.
March 24, 2020
The following video and transcript is from a discussion between Mikhail Damiani and Electric Runway's Amanda Cosco at the Fashinnovation event held in February 2020 in New York City.
Amanda: Hi everybody, how’s it going? Nice to see everyone. Mikhail, for those who don’t know, who are you and what is Blue Bite?
Mikhail: Thanks for having us here today. My name is Mikhail Damiani, I’m the CEO and Co-Founder of Blue Bite. At Blue Bite, our goal is to help improve lives by connecting people and information through the physical world. Essentially, we are doing that by taking every day physical items and transforming those into a digital platform to create this one on one channel between brands and consumers to unlock various use cases.
Amanda: You play in the QR and NFC space. For folks in the audience who maybe come from a fashion background and aren’t familiar with those technologies, can you walk us through exactly how it works?
Mikhail: So QR, I’m sure a lot of you are familiar with those little black and white boxes you can scan with your phone. NFC is Near Field Communication, it’s actually a technology that’s been around for awhile and we use it these days for things like Apple Pay and Google Pay. It’s a technology that’s easily placeable inside an item and I have some examples here, I’ll do a small demonstration to show you.
This is an adidas x Parley shoe, it has NFC embedded into it. All I do is tap it with my phone, without an app or anything, and it triggers a mobile experience that gives me the story behind that shoe around sustainability and some features some events and things like that. It’s a very elegant and easy consumer experience. There’s no battery required, there’s no app required and it’s a technology that is used pretty prevalently these days. Again, these are just two of many different types of technologies. You have other visual recognition technologies, like Digimarc for example.
Just to clarify, Blue Bite is not an NFC or QR company, we’re a consumer experience platform. We work with all of these different technologies to make sure that the experience that the consumer gets, after engaging, whether it's with a QR code or by tapping an NFC tag, is relevant to them. We’re invoking logic based on your location, based on the physical item you’re interacting with, based on the product life cycle, whether you’re engaging inside of a store or after you’ve purchased the item, the experience actually evolves and changes over time based on your context and that’s really the goal of our platform.
Amanda: Right, and in a way, products have always been the touchpoint between brands and consumers but there’s this new opportunity, with the internet of things, to connect products to the internet. Where do you see Blue Bite fitting into that opportunity and what are some of your main use cases?
Mikhail: Sure, and I agree, the products are a touchpoint. The one thing I would say is that touchpoint has been underutilized because it’s a one time touchpoint and kind of a one way touchpoint. Our goal is basically to take that and elevate and transform that from a touchpoint into a platform, into a channel that lives on through the entire product lifecycle. We are giving brands the ability to connect with consumers during the sale, presale and then post-sale but then also for consumers to provide data and feedback directly to the brand from the physical item.
As far as use cases, authentication is a big use case, and that’s both for giving data back to brands but also protecting consumers when they’re buying the items. Storytelling is a big one, you see the Bulgari bag on screen and I have it up here as well, they do a lot of storytelling inside of the retail environment but then after you purchase the item, that story evolves and different content is provided to you. Commerce is a big one and the last one is all around sustainability and transparency.
Amanda: Okay so, just to push back for a second, let’s say I’m a Chanel, for example. I’m selling a Chanel bag directly to my consumer, the consumer knows they’re getting a Chanel bag because they bought it from me. What would be the advantage for me, as a Chanel, to work with you and have your technology in one of my handbags?
Mikhail: I’d say that’s a limited part of the use case. Of course if you go to a Chanel or Bulgari store, you don’t really need to authenticate it, you have enough trust in that experience to know that that’s most likely an authentic item. I think there’s a couple use cases, one it’s authentication of returns, so if you buy something from Chanel and return it, for Chanel to know what you’re returning is, in fact, authentic is one key issue. Another is really around the consumer experience. You look at Chanel and you look at other brands, a significant percentage of the items you’re buying, you’re not buying directly from a Chanel retail store. It could be from another retailer, or, in many cases, it could be from secondary or tertiary ownership of that item, you may be buying it from somebody secondhand.
These days, if you buy that Bulgari bag in the store and you register yourself, Bulgari knows that you’re their customer. If you now sell that bag to someone else, now all of a sudden Bulgari or Chanel has lost contact with the ultimate consumer of that. If you take this and transform it from a touchpoint into more of a channel and communication platform, now you actually, as a brand, keep in touch throughout the entire product lifecycle in respective of where the product was purchased and if you’re the first, second or third owner and that is something that brands aren’t doing these days.
Amanda: Right, there’s no way for them to continue that conversation. So as we’ve heard from the previous panel, sustainability is so important for the fashion industry and for the world right now to be thinking about. How can Blue Bite work with brands to help them achieve their sustainability and transparency goals?
Mikhail: I would say that’s certainly a hot topic and has been for, at this point, maybe two to two and a half years. The adidas example you see up on the screen is a really good showcase of that. On the sustainability side, there are a couple of different facets that we play in, the first one is around storytelling. So if I’m going into a store, and I want to find out what makes that sneaker unique and the fact that it’s made out of ocean plastics that they’ve turned into thread, it’s a lot easier for me to just tap that physical item and get that information versus reading something or a card on there. The ability to promote this eco clarity and look at the transparency and seeing what are the materials that went into that, what are the labor practices that went into creating that item, the supply chain, all of that can be shown to the consumer directly through the physical item. Brands are spending a ton of money and a ton of resources on doing this so why not be able to communicate that directly to the consumers through the physical product.
Again, the cool thing is that this experience evolves over time so now after I’ve purchased the item, I get a prompt through the experience in order to participate in this run for the oceans that adidas and Parley put on each year. So now this item kind of turns into my ticket or access token to the event. Ultimately, the end of life is something that we’re looking at as well and so if you have a tag on that pair of shoes, most likely, a year or two after you’ve used the item, that hang tag has been thrown out. If it’s embedded into the item, I can tap it and it’ll say you've used this item for a year and a half, here are directions to the nearest store if you want to return it or get credit toward another shoe. Getting into circularity, it now becomes much easier for the consumer to do that.
Amanda: Absolutely. I want to talk about experiences now because as we know, in fashion, experiences are so important. Recently Forbes reported that 74% of Americans prioritize experiences over products. So how does Blue Bite enable unique experiences?
Mikhail: Everything we do is around experiences, we call our platform an experience platform. The primary way is digital experiences, so when you’re interacting with an item, the content that you’re getting is actually an experience and it can be exclusive content, exclusive playlists for a run, so if you have a running shoe, you tap it and it gives you some music you can listen to during your run, but also some of the brands are taking this and merging it with the physical world as well, where we do scavenger hunts, so you can tap a certain product around different locations around a city, country or the world and you unlock additional content, offers or perks. Sometimes the two are melded together. This is a really cool launch we recently did with adidas where they actually launched a shoe in New York, called the Rivalry, to play off the five boroughs of New York and the way that they distributed the shoe was the first time it was ever done in the footwear industry. They basically gave the shoe to one sneakerhead or influencer in each of the five boroughs and the only way a consumer could get the shoe was to find those people and tap their physical shoe. You couldn’t get it online, you couldn’t stand in line at the corner at Dover Street market to buy it, you had to find one of these people.
Adidas actually enabled the creativity from these creators, they actually gave them a budget, and said you can promote it in any way you want, on social media, people bought billboards, people rented out newsstands, they got really creative around it. You go, tap the shoe and it gets shipped to you and you get it within a few weeks and every person who sold the shoe got actual money for each pair they sold. They turned everyday consumers into their distribution channel and the numbers were astronomical, I think they had a 56% conversion rate. If you take that same model and translate it to a larger scale, technically every single one of us can become a distribution point. If I like a pair of shoes that you’re wearing, I can tap them and get them and you can receive some kind of credit from the brand for being a promoter or an influencer. I think the opportunity behind that is huge and that’s an example of combining that physical and digital experience.
Amanda: With all of these products floating around and the data that’s floating around with them, as a retailer, how can I tap into that data that is being generated? What type of insights can Blue Bite provide me?
Mikhail: So we’re not a data company. I think data is just a nice byproduct of what we do and obviously every single tap and every single scan and interaction leaves a trace of data. Brands traditionally have a lot of visibility into the supply chain, they certainly have visibility in terms of inventory and what’s happening in store, but once somebody buys that product or item, there’s kind of a black hole of data.
For us, we’re sort of providing that data back to the brand, there’s a lot of passive information that’s being generated so every single interaction you can see where did somebody tap, what kind of item did they tap, you can look at the content they’re looking at. For us, that’s the important part, the context, because depending on where you are and what kind of item you’re looking at, the content you are seeing will change and evolve over time. There’s also the feedback and actual proactive information that the consumers are doing, with a lot of our products, there is a real time feedback loop. So if I bought a pair of shoes and I want to give feedback around the fit or the sizing, I could do that directly through the shoe. So it’s kind of a combination of this passive information that’s happening and proactive information from the consumers.
Amanda: On the flip side of that, as brands and retailers are collecting data, consumers are becoming more and more concerned about their privacy and security, so how does Blue Bite ensure for its clients, like adidas, that you’re working with, a sort of infrastructural integrity to make sure that you’re not giving away people’s data?
Mikhail: That’s a great question, obviously data and security is just a pillar of our platform, with everything happening, GDPR and the California Privacy Act last year, it’s super important. For us, everything is encrypted, everything is stored securely. A decision we made as a company years ago was we don’t touch any PII. So anything that’s customer facing, consumer data, or anything that has personally identifiable information, we don’t touch any of that, we give it directly to the brand. So we’re just kind of an intermediary, so any of that information, through an integration, is stored and processed through their own CRM’s.
Amanda: When we first started thinking and talking about fashion tech about five to six years ago, we had this idea that connected clothing would mean that clothing by the very nature of it’s fiber would be connected to the internet, and now we’re talking about NFC chips and things that are kind of a means to that end but not quite that future that we’ve imagined. So I have to ask you, what’s your vision for the future of connected clothing or fashion tech in general?
Mikhail: I think there’s a place for both of those things, I don’t think they’re mutually exclusive, there are certain brands and use cases where you do want connectivity and there’s certain athletic apparel where you want your heart rate measured and sensors that communicate directly to an app or something like that. If you look at a more broad use case, it’s the idea that every single product can be connected, right? We have this phone in our pocket that we’re pretty much glued to day in and day out, that is the vehicle for connection. If I can put something low cost into every single product, to unlock that capability, to unlock that storytelling, that is something that can happen over the next five to 10 years. I imagine every single one of the products that we own, in some way, shape or form, will be connected and what we like to say is that every product has a story to tell and we’re just the ones who are enabling the ability to tell that story.