Digital Twins & Their Supply Chain Wins with Elyse Tosi

[00:00:00] Digital Twins. So as I mentioned, it's a new commerce channel. Now you can also rethink like the in-store experience You can think about how are you building customer engagement, client engagement and like connecting your closet now?

[00:00:15] Like my closet can be interactive. My loyalty program can now start to speak to you in new ways So I just think that there's so much that ties into this and it is enabled that people don't necessarily know about

[00:00:27] So I just think the way in which the retail landscape looks today is very much going to transform and it's powered by these digital twins

[00:00:36] Hello and welcome to the next level supply chain with GS1 US a podcast in which we explore the mind-bending world of global supply chains Covering topics such as automation innovation unique identity and more. I'm your co-host Reed and I'm Liz and welcome to the show

[00:00:54] Reed and I just had the pleasure of speaking with Elyse Tosi She's the vice president of accounts and implementation at Eon Eon is actually a solution provider partner of ours and they are Involved in all kinds of amazing sustainability work working with brands to connect

[00:01:14] resale and reuse from an apparel perspective They're just on the leading edge of a lot of this work and it was fascinating discussion to have with Elise

[00:01:25] Elise welcome to the show. We're so excited to have you. Thank you so much for having me. I'm excited to be here I am really looking forward to the conversation before we dive in Tell us a little about yourself and your background. Sure. So I am Elise

[00:01:41] I lead accounts and implementation at Eon in this role I help our clients on board to our technology and scale and my background is actually in the supply chain So I've worked for manufacturers sourcing agencies I've driven supply chain strategies and execution for brands like Victoria's Secret

[00:01:59] Eileen Fisher a lot of retail and specialty stores So that obviously helps as we get into some of the physical components of the technology I bet you've seen a lot of changes in the past

[00:02:13] It's been an exciting decade, I would say I mean how I came to be at Eon is One working in the supply chain data was a huge component of making decisions and driving strategies And also being exposed to some brands like Eileen Fisher and really understanding how to

[00:02:31] Incorporate sustainability holistically and all of that sort of intersection came together and brought me where I am And it's been exciting to say the least. I love the quote Exciting decade. You've got so many ways, but when you look at

[00:02:44] Covid and then you look at the focus on supply chains During through before and after even leading up to it supply chains have always been critically important to all of us

[00:02:56] But I know just looking at my alma mater college and the number of master's degrees around supply chain management 150% growth just crazy on that. Yeah, we were the unsexy side of fashion before and Now it's at the forefront. So I'm with you

[00:03:15] Another pun intended there with the fashion aspects At least I want to talk a little bit about Eon, but before we jump into that I want to let you know full disclosure that Eon is actually a solution partner of GS1 US

[00:03:30] We have a formulated solution partner program and currently today We have roughly about 145 partners and they range from labeling companies and barcode scanning companies and WMS management software solutions and blockchain and it covers a wide gamut

[00:03:49] But maybe if you can just share with our audience a little bit about Eon and what Eon actually does Yeah, absolutely. And yes, we've been very fortunate partners of GS1 for quite some time since early days

[00:04:01] So Eon is a product cloud or a SaaS platform that enables brands to digitize their products and make every unique item Traceable interactive and more valuable over time. What does digitize mean? So basically we connect each physical item to a digital twin hosted on our platform

[00:04:21] containing rich information so about origins materials it can have certifications and Brands then connect this digital twin to the physical product via a label of sorts So it can be a QR code and NFC RFID a combination of such

[00:04:38] We work with all types were agnostic and once that product now has something on the physical connected to the digital This is when it's considered to have a digital ID or it's considered a connected product

[00:04:50] And so now customers can interact with that information by standing the QR code tapping the NFC with their smartphone And it enables connectivity and downstream functionality of the product as well. That's really cool I'm just thinking of all the different information that can be encoded in there

[00:05:09] That can benefit both the brands and the consumers is there a sustainability play to I'm assuming in that Yeah, of course. So basically this digital twin on the platform is gonna house information upstream So the materials where it's from

[00:05:24] Traceability of the product what investment are brands making around sustainable materials like all of that That's typically lost when the product leaves the store its first purchase is now

[00:05:35] Contained in that digital twin and can be made available by the brand to different audiences and different data sets can be Permission to consumers to let's say regulatory bodies. That's really cool

[00:05:46] And that was the next question I wanted to ask you about because we've been hearing a lot around digital product Passports, I know that that's not necessarily in the US yet

[00:05:57] But can you tell us what digital product passports are and what industries are impacted and how people need to get ready? Yeah, so the term digital product password has been accelerated under the EU's ESPR legislation

[00:06:12] Which is under the Green Deal and this mandates that all products sold in the EU will be required to have a digital product passport by 2027 so what is a digital product passport?

[00:06:23] So digital product passport is a digital ID as I just mentioned but it has a data requirement behind it So we use these terms Interchangingly at this time, but digital product password is specific to the legislation and it has that set requirement

[00:06:37] Digital ID not to confuse they can all be sort of synonyms at this moment But there are commercial opportunities as well as legislative So we try to really ensure that that is a huge component and so who's affected?

[00:06:50] This is meant to go across multiple sectors right now batteries and Textiles are the first two sectors that will go into legislation as of 2027 quick question How broad is the awareness of DPP in the EU for batteries and textiles?

[00:07:09] It's a bit subjective, but I would say it's the top agenda point for all business that we speak to How aware our consumers? I would say more and more as I speak to friends as well as companies

[00:07:22] Everyone's aware or they're like, ah this makes sense because what I didn't mention before is the primary aim of digital product Passports in this legislation is to effectively share product data and create interoperability To facilitate downstream use cases so fundamentally Circularity so resale repair recycling

[00:07:44] So this is why it's part of the legislative initiative of the EU to really drive these circular business models And this is the technology needed to do so To build on that a little bit for some of our listeners and for myself as well

[00:07:59] Just kind of a clarification you talk about downstream like repair recycle or use resell We're talking about validation of authenticity We're talking about instructions like is it recyclable? Because I will tell you in my family we've talked about this on the show before

[00:08:16] Just because it's plastic doesn't mean it's recyclable Right, there's different types of plastics and even though we have Instructions on the lid of the garbage can we're always throwing in things that don't belong in there

[00:08:30] So that's really the purpose of helping with the digital identification the digital information the digital Authentication Yeah, I mean to your point there's multiple use cases that all ladder into this I also think this is one of eons main differentiators is our stance on this that yes

[00:08:48] It's a requirement for compliance and legislative, but it's also as I mentioned before Commercial so you have brand protection being a huge component and authentication of a product as you mentioned And so there's a lot of different ways in which you can operationalize resale

[00:09:05] Operation eyes recycling and reusing in different checks that you might want as part of those Processes to your point read so I also want to talk a little bit about the elfin in the room because we're here in the us This is an eu

[00:09:21] legislation that has happened. Are you Experiencing a lot of brands in the us that are very interested in this our customers in the us Inquiring about this or it's a small little like tip of the iceberg thing or is this 25 percent 50 percent

[00:09:40] Where's it going? It's a great question and Honestly, the us market is really on top of it We work with a lot of us clients target tapestry pink all of these brands are really using this both from a

[00:09:56] Compliance standpoint, but also a commercial perspective and I think that's Really an important piece of it. So as brand protection for example, it's a two trillion dollar problem for retail so this technology really Unlocks and enables you to address the gray market brand protection, etc

[00:10:16] And so there's a lot of immediacy in what can be leveraged and used today And it's also preparatory for the legislation. It affects multinationals So if you sell in the eu but you're a us brand You're just as in tune to the eu

[00:10:32] legislation as some of the big european companies So I would say it's also top of the agenda and maybe different use cases are being utilized earlier to think more Commercially, but maybe a year or two ago. I think it would have been more of the EU market

[00:10:46] But not anymore. We're talking just as much with us market and brands I'm glad to hear you say that it's been my experience that a lot of our global multinational companies. They're in tuned right because

[00:10:58] I always say that companies do things for three reasons make money save money or be compliant, right outside of that It's kind of whatever you want to do, you know, but those are the three things they wake up in the morning

[00:11:09] It's make money save money or be compliant And so we don't have that compliant thing per se in the united states But what we've been seeing here at gs1 us as well is the multinationals need to do it You need to do it there

[00:11:22] So make it a part of your best practices and leverage the benefits in other places but we're also seeing mom and pops because of The e-com space the internet marketplace selling in all these different areas

[00:11:37] It's like wow for a little bit more to get a lot more percentage I could go sell in europe and leverage a 3 pl to do my distribution and other aspects of what's going on

[00:11:49] And I need to be aware and it's amazing to me when you go to some of these e-com sites And you see how they help with tariff taxes and all these other things out there

[00:12:00] Whereas before you'd have to hire someone that knew something about that so it's truly Crazy how the you know, I've heard some people say well now the tail is wagging the dog And I'm like but is it it's still a global economy

[00:12:12] It's funny you say the three pillars there because we very much think the same way What is the dpp or the digital id enable? And so we think about it in three buckets one cost reduction So yes, how are you reducing your risk for compliance?

[00:12:27] How are you optimizing your inventory your supply chain management through item level? There's a multitude of cost reducing initiatives through digitization So that's the first and immediate that brands are thinking about the second is driving top line So now through this product you have another commerce channel

[00:12:47] Immediately right once you put a qr code and nfc on the product you can speak to the consumer And so now you can have another channel with a captive audience through their phone And how many of us are attached to our phone?

[00:13:00] So you can drive upsell like different styling you've said a port one of our clients had 50 interest in the styling Through the product because I buy this jacket. How do I wear it? How do I style it? So Call her up or calling down?

[00:13:18] I know it's different each day if i'm on And then the third being okay, so now you thought cost reduction you're driving top line now There is incremental revenue available through the product that was not happening before and how is this?

[00:13:31] This is through what we call so it resale We just launched one flick resale through our eon exchange marketplace So when brands are creating their digitized product now they need to actually Exchange and connect through different partners

[00:13:46] And so we have an app store on the product that allows brands to select in different verticals Where they might want to connect their products and drive different services one of which is resale So now through one click resale. I'm a consumer. I have my

[00:14:01] Product i've gotten all my information. I've used it. I loved it But now i'm ready to resell it most of us know it's pretty laborious to go and

[00:14:09] Post an item for resale now all I have to do is scan it and a brand can funnel a consumer through a Preferred resale channel and start to get part of what otherwise would have been a business model outside of them

[00:14:22] So there's an incremental opportunity and really driving new revenue, which is effectively what the legislation is driving towards How do you increase profitability? Decoupling it from just making more products and production So it's funny you say that because we definitely see you have to prove back the ROI

[00:14:40] Legislation is going to mandate it. It's a comprehensive cross-departmental Initiative so making sure you see immediacy and ROI as you're transforming the business is critical to adoption It's just fascinating. There's so much to it and I love, you know You have to do this

[00:14:58] But what other benefits can you get at being creative about that? I want to switch gears a little because obviously with you all being a part of our solution partner program You must utilize the standards in some way and I would work to hear, you know, we

[00:15:15] I'm going to say e p c is that rolls off my tongue But what it is is electronic product current information services. So can you just tell us how? e p c is plays a role in the work that you all do with your technology

[00:15:30] so one yes, you're absolutely correct that standards are critical for interoperability and scale and so You can think of digital product passwords as both data requirements and then a system

[00:15:45] For products to move through their life cycle with a value chain of stakeholders either b2b or then end consumer And standards support the ability to exchange action through the system And so we leverage

[00:16:00] Many standards many of gs one standards to do this one being your identification, right? The g10 having a unique identification system when clients use the gs one digital link, but specifically to

[00:16:14] e p c is so this is how do you manage the data that comes in based on the interaction and movement of a product and so e p c is is critical for digital product passports and that data set so it's internet of things right?

[00:16:30] It's moving about the system and how e pcs allows you to standardize how we record and store that information both upstream and downstream Today, I would say it's really utilized in the supply chain

[00:16:41] And so the opportunity is extending that to be on point of sale and first purchase So Standardizing the events is important for us in our technology for a few reasons one you can personalize

[00:16:54] Which is you know as we talk about the consumer as you talk about the experience Now you can build a lot of functionality off of your events because you have the ability to read to

[00:17:04] Action and so for example personalizing a customer experience before or after a product is purchased because a sold event is Recorded in an e pcs standard format. So this ability to drive Commerciality is critical. It's important for insights

[00:17:22] So obviously being able to query your data derive insights from the multitude of movements both from materials and products will be critical And interoperability. So now we're also saying this product is moving in a system inside your four walls as a business and

[00:17:39] Externally and so how do all of those different value chain partners? Understand read and action what you're telling them starting from day one e pcs has always been like a brilliant standard to me Because it really helps in the scale and interoperability, but lastly like

[00:17:54] Circularity for instance. So one of the big goals is end of life. How are you accountable? As a brand for products that are out in the world How do you start to measure the life of a product and then action off of that?

[00:18:07] So registering end of life or regeneration saying this material moved from one product to another as a transform event So there's a lot of ways in which we leverage this to support the

[00:18:18] Commerciality of the product and the digital product passports for our brands. The last thing I will say is we are technology provider chosen by the e you in what's called sir pass And in this we are piloting digital product passports for the e you which then informs back

[00:18:36] actual digital product passports in the market informs legislation and adoptability and so standards is a very big component of This work that we do as well That was Really great. You went to some areas

[00:18:49] I wasn't expecting and layering things on top of other things and it just made me think of and lisa's gonna love this because I always go here, but my it background and experience Internet comes out. We get tcpip right? It's just an internet protocol

[00:19:04] Then on top of that you layer a protocol for email Then a few years later we layer a protocol for video Then all of a sudden we're having video conferences and we're seeing all this stuff

[00:19:15] But when the internet first came out it was just text and the way you described what was going on here is you're leveraging gs1 standards you're leveraging legislation in different countries You're leveraging other standards to create the systems of systems

[00:19:34] That people can interact with for different reasons and different flexibilities Like I wasn't aware of the eon exchange marketplace. That's a new aspect. So that's very cool I'd like to pivot just a little bit because we're kind of starting to come to the end here one aspect

[00:19:51] I'm interested to hear from you on is what emerging trends Are you seeing in this retail space? You mentioned qr codes a few times? And I still lack just qr codes are 30 years old

[00:20:04] Thanks to covet everyone knows what they are now, but there is there's proprietary, but you also mentions gs1's digital link So qr codes is its own standard nothing to do with gs1 We consider it a data carrier that people can leverage

[00:20:21] But we do have a standard for digital link and you can put that into a qr code And we see the two of them coming together where people don't have to re program or rename or re identify things

[00:20:32] And they're leveraging just like we talked about layers of things But i'm curious if you're seeing other emerging trends in the retail space that our listeners could benefit from Digital twins. I know that this is sort of one note across the board

[00:20:47] But it's so big and it connects and amplifies so many other things that brands are doing So as I mentioned, it's a new commerce channel now. You can also rethink like the in-store experience

[00:20:59] You can think about how are you building customer engagement client engagement and like connecting your closet now Like my closet can be interactive. My loyalty program can now start to speak to you in new ways

[00:21:13] So I just think that there's so much that ties into this and it is enabled That people don't necessarily know about like we can connect, you know, Ian has a product cloud So we're very product data focused however our clients can take that item level serialization back in

[00:21:29] To their tech stack and connect it in their crm and now you have a data set never before possible connecting your consumer and the product and the usage So I just think the way in which the retail landscape looks today is very much

[00:21:44] Going to transform and it's powered by these digital twins the eon exchange as we mentioned one click resale Again, I can't underestimate the power of me being able to list a product without actually typing in information

[00:21:57] Taking a picture having to do all of these things manually. I can just go into my app I can scan the qr code and the listing is there and you're now able to sort of change your buying habits pretty quickly through these digital twins

[00:22:11] So I would say I love that it's behind the scene empowering so many other things, right? So you can also think about what's happening in the retail store easy check out just via scan No longer having to wait in these long lines

[00:22:24] Having smart experiences trying things on finding inventory like there's so many things that it's unlocked this way And it becomes critical to have this infrastructure this item level Infrastructure that a product can speak to a brand's tech stack in all different capacities, right?

[00:22:40] It can speak to your inventory. It can speak to your point of sale system It can speak to your after sales process like there's so much to unlock We're just scratching the surface and to your point like 2d barcode

[00:22:51] So eon was part of the working group were excited about the digital link which powers your 2d barcode And this allows for the point of sale systems in retailers to be able to scan a qr code versus

[00:23:03] Just the u p c and therefore you can register an event At the point of purchase you can say this product is sold and now you can start to build different experiences off of

[00:23:13] Your product and you have that insight that this part of your inventory is sold and in the wild we call it There's so much That it's continuously motivating

[00:23:22] We learn as the market matures and as our brand partners are launching and trying new creative things that no one could have foreseen so it's super exciting That's exciting to hear there is so much going on and it's really cool one other quick question

[00:23:39] Just curious metaverse dead or alive I would say nft's blockchain all of these sort of niche technologies that can live on your digital idea I think there's an avenue for them and there's an audience that is interested and

[00:23:55] I don't know how that will come into mainstream or how it will be from an adoption Perspectives mass market, but everyone's got their thing and I think there's a home for it all Yeah, it's just funny because metaverse isn't really talked about that much

[00:24:08] But I think it's running the course of the gartner hype cycle and we're in that trough of delusion right now And the real players will be coming out strong on the other end. It really hit a super strong hype cycle during cove

[00:24:20] Yeah, well, I think it's ahead right like a lot of clients were like, okay blockchain Let's go and we were like right but you need to Identify your product first you need to decide exactly what you want to register on blockchain

[00:24:32] There are really specific use cases like we work with the textile genesis up chain Like we're really looking at materials and the use case there for being able to

[00:24:42] Prove provenance and have that attached to your digital product passport and then events like as we look at smart contracts Things like that registering everything on blockchain is expensive and energy consuming and so really being specific And intentional with the use case absolutely

[00:25:01] I think we just got ahead of ourselves and we had to take a couple steps back to say, okay Well, what's the foundation? How do we do this in like a scalable and cost effective and ROI generating way Awesome appreciate your opinions on that

[00:25:15] Yeah, I would ask the same question like emerging technologies like you sit at sort of a very interesting Cross-sector cross section. What do you think? I love it I love that she asks this question as Liz is taking a sip of

[00:25:31] Being drink so my perspective we've been involved quite a bit We have an innovation team here at GS1 us a dedicated innovation team that looks at horizon 2 and horizon 3

[00:25:41] Things that are going to happen two to five years and five and 10 years and beyond and we've been heavily involved with artificial intelligence and computer vision And we all realize from our backgrounds. There's no silver bullet It's a

[00:25:57] Compilation of all things kind of coming together and then how are people using them? So 2d barcodes and a 2d barcode just handles more data than a 1d barcode

[00:26:06] And the most common 2d barcode is qr for people that are out there because I'm always conscious of that because we talk to ourselves a lot You know, we're seeing a lot of that the automation but automation Let's be very very frank

[00:26:21] It's a computer of some sorts and a computer runs off of a database. It's an if then statement Now what do I do? Tell me what to do artificial intelligence unsupervised machine learning still leverages databases of knowledge

[00:26:37] So even though it can think for itself and start to make this it still needs an input so having standards of putting information in and context and contextual understanding and syntax

[00:26:51] Is extremely important and I always go back to the simple example of writing out the date in the united states versus writing out the date in europe 03 02 2024 is that march 2nd or february 3rd?

[00:27:04] You're both right. It depends on where you are. So that's that syntax piece, but it's critical to how you scale Right, we've seen a lot of great automation solutions They get bogged down because they have to customize the implementation to the customer's environment

[00:27:22] Whereas if they were able to leverage standards, like we don't even think about it I grew up in the era where you had to have one of 15 floppy disks to program your computer Right. Oh, here's the update disk that you got from aol

[00:27:36] Nobody thinks of that anymore because the systems are truly standardized and we flow it on top and we've automated them a lot more But it's an exciting time. I'm going back to it's an exciting decade Yeah

[00:27:49] But I think you just nailed on something that is super important for everyone thinking like how do we get started? We need to have all of this right in this type of technology but to your point Creating these foundations and using the frameworks allows for extensibility

[00:28:04] Like it is an evolving landscape and that's like this is what we talk to our clients about all the time Like you're getting started. You don't have to know everything. You just have to get started understand

[00:28:17] Foundationally how to set this up how to operationalize in your supply chain How to speak to the consumer how to really put the framework in place It's going to evolve the legislation the data requirements

[00:28:29] Everyone's very worried about the data requirements naturally, but those have yet to be codified that's coming shortly But the framework in the system Is put in place so that it can expand as the data is Codified and what's needed it can address the

[00:28:45] Evolving requirements because you know, it will be a phased approach as well So this is to say like we're starting with clients The time is now around this technology because the legislation as we said earlier is by 2027

[00:28:57] But you need to understand how to get started how to operationalize this how to commercialize it So that you can find the value as you scale across your business

[00:29:07] So we are running out of time and read am I always finish up our shows with asking our guests two questions So from a professional perspective or a personal perspective, what is the favorite technology that you're using in your life right now? Okay, i'm gonna say two

[00:29:26] One obvious things i'd be lying if i said digital product passwords are not my favorite technology It's a bit of an obsession But two i think i'm a little late to the game here, but I would say like apple wallet and apple pay

[00:29:39] It's freeing one click from the phone and I don't have to carry Yeah, just changed here. My license goes in here now. I use it a lot You know what that means means you're getting older. This is true

[00:29:54] I just said it was an exciting decade. I think that I think I love it and supply chain. I think I am classifying it as getting older. Yes Yes, yes, that's fantastic. We appreciate that The other thing we'd like to know is just you've experienced a lot

[00:30:12] You've been through a couple different industries and looking at things from different perspectives and don't know anything about where you grew up Or anything like that, but you don't need to get into it

[00:30:21] But what we always ask our folks is what is something that's just happened in your life where it's just Blown your mind and now you look at the world completely differently it's being part of Eon and the mission and seeing transformation like action

[00:30:38] Working with our clients and seeing brands paving the way to change and knowing that we are a small part of Contributing to finding ways to leave the planet a better place

[00:30:50] I think it's blown my mind to find something that motivates you regularly every day and is continuously evolving and you are making A difference through the work that you do It's a blessing and it's something that I don't take for granted. I met your CEO

[00:31:07] Six and a half years ago Natasha Frank stayed in touch, you know over the years and I've seen the evolution To what the company is doing and I have to tell you I am impressed because

[00:31:18] The ebbing the flowing the changing directions if you ever want to see a true startup, that's what Eon Was I don't know if we still consider you a startup I think we're moved on to enterprise software and we're moving at a rapid pace and

[00:31:34] It's an exciting place. Yeah, I mean read you were part of early days helping us put together the protocol How we always have had a data first approach to

[00:31:45] Digitization and understanding interoperability and you've been, you know a very important part of informing us and how we go about that So it's been appreciated. Yeah, and we appreciate the partnership and this is what we're always looking for

[00:31:56] I was actually meeting with our partnership team yesterday and they said we really value true definition of partnership It's a bi-directional Communication back and forth because we can all learn from one another so

[00:32:09] Well, at least this was fantastic. Thank you so much for being on the show today We really appreciate you carving in the time and you're on the west coast and super early today. So

[00:32:19] Appreciate it. Thank you guys very much and we value the partnership as well and happy to be here today Thank you for joining us on this episode of the next level supply chain with gs1 us

[00:32:31] If you enjoyed today's show, please subscribe to our feed and explore more great episodes wherever you get your podcasts Don't forget to share and follow us on social media Thanks again, and we'll see you next time