August 17, 2017    6 minute read

Blockchain and the Fashion Industry

Dressing for the Future    August 17, 2017    6 minute read

Blockchain and the Fashion Industry

There’s no denying it, the fashion and retail world will become one with technology, the line between these two industries is blurring and is reflected in trends such as chatbots, change in the Brick and Mortar structures, virtual realities, artificial intelligence, robots, 3D printing, Internet of Things and blockchain.

One of the most cutting-edge development is the incorporation of blockchain technology. The blockchain is a global online database that anyone with an internet connection can use, but it doesn’t belong to anyone.

Block What?

A blockchain is a distributed database maintaining a constantly-growing list of data records secured from tampering and revision. The data are recorded in a blocks structure, with each block holding batches of individual transactions. Meaning the database is secure, open, auditable and what it makes it unique is that it runs without a single centralized operator. The defining feature of a blockchain is that it cannot be modified by any party, it is coded in a way that prevents fudging the data, whether that data is Bitcoin quantities or the origin of a piece of clothing. That means information can be transmitted through huge networks, such as supply chains, and be added to by users on those networks without compromising security.

Conceived in 2008, it is mostly used in the banking sector for the moment, because the technology easily helps to trace transactions and it happens to be the main technical innovation of the bitcoin. The idea was to create a decentralized digital property that keeps track of who owns what. Today it is not Bitcoin, but blockchain that everyone is buzzing about.

Blockchain Meets Fashion

A few months ago, blockchain made its fashion debut during Shanghai Fashion Week. Babyghost, a young Chinese-New York label, teamed up with BitSE, a company specialized in the blockchain, and VeChain, an anti-counterfeiting application to showcase its Spring and Summer 2017 collection. VeChain is a cloud product management solution integrated with blockchain technology that puts unique IDs on the blockchain and can verify if an item is genuine or not.

So the collection could be verified on the blockchain to fulfil a bunch of possibilities: anti-counterfeiting, supply chain management, asset management and client experiences. The result of this union is called FashTech, where a clothing collection can be verified on the blockchain through Near field communication or by scanning the QR code on the label. A person’s phone communicates with the small VeChain chip embedded inside the clothing which then tells its “story” to the consumer. VeChain can be programmed with photographs, videos and even personalized information such as whom it was purchased for and why.

Blockchain is based on a simple idea, but built upon a complex technological framework. Its goal is to establish trust, accountability and transparency while streamlining business processes. Blockchain relates to fashion in different ways.

Intellectual Property

The most immediate and obvious use of blockchain in fashion is to verify the originality of a garment. Microchips utilizing blockchain can tell a customer with complete certainty whether a piece of cloth is genuine or an imitation, whether it was stolen, where it was made, and the item’s general history. All this information is accessible via smartphone. With revenues around $600bn per year, counterfeiting hurts brands and consumers alike.

Supply Chain And Transparency

Blockchain could conceivably tell a customer not only where an item was made, but who it was made by, the conditions they worked in, and how much they were paid. Shoppers could have immediate access to information such as the composition of an item’s fabric, where the cotton was grown, which polyester compounds are used, what chemicals have been used for bleaching and so on. Blockchain technology has the ability to garner greater trust and brand loyalty throughout the product lifecycle.

Source: Faizod.com

Example of a manufacturing and distribution process utilizing Blockchain and RFID

Especially in the fashion community, supply transparency has been a major concern.  The Fashion Revolution began a campaign to show “who made my clothes.”  The movement is humanizing a manufacturing process that we forget is still controlled by human hands. Blockchains can bring transparency to supply chains and on the governmental level, let them request information from even distant suppliers.

History has shown that centralizing data into the hands of one single party doesn’t work for transparency: having a single party able to control what is seen creates bias, even when it is a third party, and cannot be totally disinterested whilst being incentivized enough to maintain the system, without being vulnerable to bribery, social engineering or targeted hacking. Even without mentioning if the party is the brand itself, or the biggest actor in the supply chain, making a major conflict of interest. Blockchains will entirely change the game for certifying, tracking and tracing the origin of goods.

Customer Experience

It’s the dawn of a new era in fashion, in which customers interact with their clothes on a profound and meaningful way. Blockchain therefore is storytelling and brands can do that fairly easily and merge it with Social Media.

By looking beyond sustainability to production, and getting consumers to understand the layers of complexity involved in bringing a product to market, the blockchain can help move the mentality away from throwing products into landfill and instead appreciating the value of items. Over a third of garments purchased find their way into landfill sites or are otherwise disposed of within just one year.

The Internet is the digital medium of information, and blockchain is the digital medium of value. We cannot predict the future, but undoubtedly, blockchain is a technology that is worth getting to know, as it may very well spark a revolution across various industries. It is estimated that until 2025 up to 70% of all global markets will depend on blockchain, directly or indirectly. A huge potential will be the of so called “Smart Contracts”, these are automatically executed agreements, with no human intervention. As one of the unfolding technologies, blockchain is empowering fashion brands to take a lead towards greater transparency. By educating consumer’s via the product journey, it is going to redefine the meaning of fashion by including elements like honesty and real transparency.

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