Future-proofing physical goods for the digital world

The concept of “future-proofing” refers to a process of designing and developing products in a way that makes them able to withstand the rapid pace of change and remain relevant over time. You’ve likely witnessed this many times over the course of your life, especially in the realm of consumer technology, but maybe you just can’t pinpoint it. Try to imagine instances where a company made a decision regarding their products that may have appeared as a leap of faith to the untrained eye, yet actually resulted not only in saving the products from obsolescence but also in putting it ahead of its competitors.

Here are a few concrete examples:

The notion of future-proofing involves anticipating where things are going and what comes next, otherwise whatever you’re building today is already yesterday’s old news. Here’s our bet on what’s to come over the next several years: Physical Goods and Near Field Communications (NFC).

What broadband, Bluetooth and other such ‘sleeper’ technologies had in common were that they were esoteric and uncommon until suddenly they weren’t. Broadband became popular because of our need for more information at a much faster pace. Bluetooth became popular because of our need for convenience and interoperability. Today we also have WiFi and 5G. But it would have been impossible to truly predict or devise something like the Internet of Things without broadband, WiFi, Bluetooth and 5G having been born first. In future-proofing, you have to look not only at the current trends but at the possibilities that will come of them. It is our belief that this is where we stand with the interface of physical and digital (‘phygital’ as some call it).

Society is approaching a singularity of physical and digital overlap.

Some are referring to that as the Metaverse, or the next Internet, or a myriad of other terms. It all really means the same thing: an interconnected human experience bound not by physical borders but by ideas, worlds, augmented and virtual realities, an always-on Internet of Things and the option for decentralized ownership and control of it in various respects. Humanity is learning to balance its increasing desire for digital consumption and existence with its physical one, which is certainly not becoming any less. For more color and illustration about such possibilities, read Nic Carter’s “Redeem-and-retain NFTs are the future of luxury goods” or Matthew Ball’s “The Metaverse: What It Is, Where to Find It and Who Will Build It”. We’re nearing that point where a person looks at a pair of physical shoes and says: “they’re beautiful, they’re comfortable, but what else do they do?”

They’ll be referring of course to “what else can they do digitally”. This is the reality that physical manufacturers should be preparing for and the technology for it is already here.

The Near Field Communications (NFC) tag is a chip that usually comes in the form of a paper-thin badge or a sticker. It’s small, it’s durable, it’s practically ⅓-⅕ the price it was ten years ago and it’s even machine washable. You can put some information on it, but its real future-proofing value is that it can turn any physical good into a uniquely identifiable smart-item interfaceable with the digital realm. In other words, NFC tags enable digital utility for physical goods.

How, you might ask, will we scan the NFC tags? Is someone going to carry around an NFC-reader in their pocket all day long just waiting to come by an NFC? We’re all, in fact, already doing so.

In 2011, only 5% of mobile phones were NFC-equipped. Today, that number is closer to 75% and quickly approaching 100% with each new phone coming off the assembly line. The compound annual growth rate (CAGR) of the NFC tags themselves is estimated to be 22.5%. NFC is the technology that makes Apple and Google Pay possible. If you’ve used either of those, you’ve used NFC. It’s that easy. All you’re really missing is a compelling reason to scan an item.

What’s great about NFC is that this is not a new technology, only one that — much like Bluetooth and broadband — is waiting for its moment. Experiments with phygital experiences have been tried over the years with varying rates of success. Perhaps most successful was the Toys-to-Life niche which started with the likes of Activision’s Skylanders and the Nintendo Amiibo: physical toys that gave you digital power-ups and abilities inside specific games. The Toys-to-Life niche is widely considered to be one of the most financially successful branches in the history of the video game industry, despite it being years ahead of its time. More recent examples include NFC-tagged physical goods from Disney, LEGO, Hasbro, Mattel, Adidas, Under Armour, Nike, PUMA, Uniqlo, Reebok, FUNKO, Converse, VANS, New Balance, SuperPlastic, McFarlane Toys, Bandai, Warner Brothers, Universal Studiosand the list goes on.

With the rise in layman’s interest in virtual worlds, smartphone tech, gaming and virtual economy along with the interfacing of augmented reality and the rise of the Metaverse, things can only lead to one inevitable disruption and that is a reality where even the most commonplace physical products are expected to come with some form of digital utility, if only just a "digital twin"of the same product, but hopefully much more. Today, technology, creators, and digital infrastructure exist to seamlessly blend the physical and digital together, in one robust and compelling experience.

AsNetflix bet on mass penetration of broadband and Logitech carved out market-share with a leap of faith towards Bluetooth, it is time for manufacturers to prepare for the not-so-distant future. NFC tags offer a way forward, and we encourage them to be placed in anything and everything. The tags are unintrusive, cost effective, and ubiquitous. They are easily attainable and can be implemented with negligible cost. NFC tags today are where Bluetooth was in the adoption curve, just before it became an explosive phenomenon followed by an everyday expectation.

By placing NFC tags in physical products, companies and brands can prepare for tomorrow. Knowing how these tags can or will be utilized is not even an immediate requisite. If inspiration for its use in the product does not come right away from the manufacturer itself, it may come from a third party with whom a collaboration may open new and exciting business opportunities. However the digital world evolves and expands, an NFC tagged physical product will be able to take immediate advantage of it. As for consumers, this provides one more compelling reason to buy that item instead of the generic item sitting on the shelf beside it. It spawns new dimensions of demand that traverse multiple experiences.

Future-proofing for manufacturers of physical goods begins with enhancing their product offering today to enable its utility in the digital realm, thereby solving the problem of how today’s consumer shapes and evolves their identity in both worlds.

Causality is creating the API for the physical world. Follow us on Twitter and prepare for an alpha soft launch in Q1 2023!