Back in 2017, Marco Iansiti and Karim R. Lakhani of Harvard Review criticized blockchain as the most overhyped and least understood technology. Fast forward to 2022, and blockchain still rides the wave of hype. However, things are changing. More folks in the fashion world are starting to understand the benefits of blockchain in the fashion industry. Compared to before, we’re seeing more ways people use blockchain. Businesses are using it to solve old problems and plan for the future. When data syncs up across supply chains, it creates a connected system that makes things smoother. Therefore, this means quicker deals and easier access to information. For instance, if you want to check if a product came from an ethical company, blockchain keeps track. It’s all recorded and traceable, making verification a breeze.
Role of Blockchain in the Fashion Industry
Despite the ongoing buzz surrounding blockchain, there remain decision-makers who are uncertain about its fundamental nature. Mario De Luca, CEO of Maison Merikerho, characterizes blockchain as a “technology facilitating accelerated retrieval of information stored in blocks, thereby optimizing the usability of data. Marjorie Hernandez, the founder of LUKSO, believes blockchain is the top choice for improving flexibility, transparency, and agility in supply chains. Thereafter, she explained to The Interline that integrating blockchain into supply chains would make it easier to track products through various stages of transportation, ensuring that any issues like damage or malfunctions can be quickly traced in a shared network or recalled before reaching consumers.
Although it started in Decentralised Finance (DeFi), which uses secure distributed ledgers similar to cryptocurrencies, Social Impact Consultant Laura Elvin predicts blockchain will naturally evolve. She says with the fashion industry moving swiftly into the Metaverse, brands need to get familiar with these “new” technologies like blockchain. As it progresses, blockchain brings benefits to fashion by connecting supply chains with real-time data flow, creating an unchangeable record of entered information. Furthermore, De Luca clarifies that blockchain doesn’t guarantee truth but enhances how we interact with information, giving a new kind of power. Fashion Supply Chain Blockchain expert Tumelo Setlaba believes the traditional model is outdated. He sees blockchain as the key to the fashion industry’s growth and improvement in a way to level up, take responsibility, and upgrade.
Advantages of Blockchain in the Fashion Industry
Blockchain technology brings numerous benefits to the fashion industry, revolutionizing its operations and enhancing various facets of the supply chain. Below are the key advantages of implementing blockchain in fashion.
Using Blockchain to Combat Counterfeiting in Industries
Counterfeiting in luxury goods is a big problem, making up around 70% of the $4.5 trillion fake goods market.
Luxury brands tried using serial numbers, watermarks, holograms, barcodes, and special materials to stop counterfeits, but these tactics didn’t work well. However, hackers could still manipulate data and create fake products. To improve security, luxury companies are looking at blockchain technology. BabyGhost used NFC or QR codes on their products, letting users check authenticity by scanning with VeChain’s app.
A sneaker brand, Greats x Beastmode, used smart tags with blockchain to prevent imitation and give buyers access to exclusive content. Big luxury companies like Prada, LVMH, and Richemont formed the Aura Blockchain Consortium in April 2021. Thereafter, this group uses blockchain to verify luxury goods’ authenticity and track their history from production to resale. Moreover, Ardnamurchan Distillery partnered with Arc-Net, adding scannable QR codes to whisky bottles for buyers to check authenticity easily.
Blockchain Enhances Supply Chain Security, Transparency, and Sustainability
Blockchain technology offers valuable supply chain information for companies focusing on sustainable products. Fashion brands participating in initiatives like #WhoMadeMyClothes by Fashion Revolution can enhance authenticity by sharing data about their sourcing and production processes. Martine Jarlgaard, a London-based fashion house, partnered with Provenance in 2014, attaching unique digital tokens to garments. This allowed tracking of everyone involved in the production process, promoting transparency using blockchain.
A recent partnership in late 2020 involving Lenzing, Armed Angels, Schneider Group, and Textile Genesi introduced Fibercoi technology. It enabled issuing digital tokens for fibers like LENZING and TENCEL, ensuring secure information flow in the textile value chain. Therefore, these initiatives aim to reduce the opacity in fashion brand supply chains, benefiting brands by gaining trust and reputation among customers and stakeholders. Therefore, the biggest challenge in achieving transparency in production processes is the complex and unclear nature of supply chain systems, especially in the fashion industry.
Blockchain: A Great Tool for Branding & Marketing
Fashion companies can use supply chain information not just for operations but also for effective branding and marketing strategies. 1trueid, an Italy-based blockchain company, collaborated with Alessandro Gherardi® to develop MTM Shirt 4.0. They added a secure, water-resistant tag to each garment, linked to the “Alessandro Gherardi Su Misura” app for direct customer engagement.
Their goal was to create dynamic marketing strategies by offering a service chatbot to customers and inviting them to exclusive events. Thereafter, the digital tags also provided real-time data for the company to plan better offers and pricing. The challenge for companies in this context is to gather sufficient data to create more precise marketing and branding strategies.
Use of Blockchain in the Fashion Industry: Transactions of Exchange-Goods
Blockchain enables swift and efficient identity verification without relying on third-party support. Users have secure control over their data. In the luxury goods sector, blockchain allows for transparent ownership changes. Everledger, a London-based company, has put over 1.6 million diamonds on a blockchain. This technology is currently used for exchanging diamond ownership, and listing details like color, carat, and certificate number.
Also Read– Belgium Wants to Speed up EU Blockchain Infrastructure
In Conclusion
Blockchain technology has emerged as a transformative force in the fashion industry, addressing longstanding challenges and reshaping operations. From combating counterfeiting to enhancing supply chain transparency and empowering marketing strategies, blockchain’s impact is evident. Its role in verifying ownership and facilitating secure transactions underscores its potential for revolutionizing the industry’s future. As blockchain continues to evolve and integrate, it stands poised to redefine fashion’s landscape, fostering trust, sustainability, and innovation.
No Comment