Blockchain in Fashion Industry


By Danai Gkolia,
Consultant of HNC Coin

Transparency and sustainability consist of two of the largest topics within the global fashion industry today.

Many brands and retailers are beginning to pay more attention to their supply chains’ environmental and social impact.

Nowadays, thanks to the emergence of new technologies, like blockchain, retailers can improve supply chain traceability while offering more transparency into their manufacturing streams.

Blockchain has the ability to track any digital or physical product throughout its lifecycle.

Transparency in supply chain tracking gives producers a bird-eye view into their value chain, allowing them to guarantee the proper handoff of third-party goods and final product labeling.

Blockchain can track the progression of assets, record the information, and show previous asset records.

It has the potential to expand the sustainable and ethical production and consumption of any commodity on a global scale.

Since the Rana Plaza factory collapsed in 2013, shedding light on the inhumane working conditions of garment workers, Fashion Revolution has been releasing the Fashion Transparency Index each year to rank brands according to their level of transparency.

The average transparency score amongst the top 200 most prominent fashion brands and retailers is just 21%. Using blockchain, brands can digitize, track, and trace the entire lifecycle of a luxury item.

With blockchain, brands can create an immutable record of all steps in the supply chain, capture specific data points, such as sustainability certifications and claims, and provide open access to this data publicly.

Transparency into the supply chain increases customer trust scores, which enhances the client experience and bolsters brand connectivity.

Heightened customer trust scores translate to increased customer loyalty and lifetime value.

Next, environmentalism is now a key driver of choice in the market. More and more, awareness of global environmental issues is changing the habits of consumers wherever they live.

These attitudes are driving brand choice. It is imperative for brands to build trust and transparency with their customers, as 75% of them consider it to be an important purchasing factor.

Digital provenance has emerged as a way of helping apparel brands to counter the threats of counterfeiting, demonstrate their sustainable and ethical credentials, and also differentiate in a competitive market.

By creating a unique digital identity for every product – a digital twin – its lifetime journey can be traced on the immutable blockchain from raw material to design and sale, and then resale and recycling, depending on the brand’s needs.

When it comes to manufacturing, suppliers can use blockchain technology to store and share information regarding the source of raw materials — from how it was grown, where it was stored, the amount shipped to the textile mill and the number items made — to create a permanent, immutable digital record of all the materials used in production.

By storing this information concerning manufacturing in a blockchain system, rather than through an internal or analogue system, all the information added to the blockchain can easily be accumulated and self-validated, while remaining accessible to anyone with a QR Code or NFC reader.

MCQ, a fashion label that was relaunched in 2019 by Alexander McQueen, harnesses blockchain and IoT to demonstrate its sustainability commitments and unite customers around a shared passion: sustainable luxury fashion.

MCQ has designed the unique MYMCQ concept, a blockchain-powered tech platform implemented by Everledger, which enables designers and consumers to securely register and trade items of clothing designed by a hand-picked selection of designers.

MYMCQ offers a focus point for a community of like-minded individuals, who share an interest in the label. Everledger’s technology enables the creation of a secure and permanent digital record of each clothing item on the blockchain.

In 2019, the start-up won the H&M Foundation Global Change Award and has been supported by Zalando through its zImpact programme, while already counting Hugo Boss as one of its clients.

Major brands are already on board to increase supply chain transparency with the use of digital technology which could change the way we consume clothes by moving away from a throwaway culture and appreciating beautifully made products that carry a meaningful story.

Thanks to blockchain technology, customers are no longer passive buyers of goods but have become an active component in the supply chain and afterlife of each item.

Through this continuous stream of data, brands can know who is buying into their products and call them back for recycling or reselling once they reach their end of life. This then helps fashion items to stay in a closed loop system and avoid waste by recirculating products to save both water and CO2.

Furthermore, with blockchain, both consumers and sellers can view exactly where the items are, including GPS navigation tracking from the distributors’ warehouse, to the consumers’ front door.

Amazon and other online retailers have made it incredibly easy to have many different items delivered to your house within a few clicks, no matter where you live. For anyone building a project that relies on many different suppliers and deliveries, for example, time is money.

The process of tracking and tracing deliveries of online purchases on the blockchain could heavily reduce the likelihood of items getting ‘lost’ in the post or for customers to have to chase around to retrieve items that were not delivered.

Each step of the process can be monitored on the blockchain, making for an efficient and transparent experience for customers and suppliers alike.

Although there are still challenges to be faced with the widespread adoption of blockchain, the future potential for the technology is evident.

Blockchain is unregulated at this point in time, without any standards or certifications set in place to safeguard and structure the ongoing development of blockchain solutions.

Blockchain is also costly, making it unviable for many smaller brands. However, the future possibilities offered by blockchain are too large to be ignored.

Source: The Athenian Magazine

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