Blockchain, the power of transparency.
From the tech world, to the fashion industry, here’s how the blockchain technology is enabling transparency starting from the supply chain. Blockchain is at the heart of the tech buzzword
From the tech world, to the fashion industry, here’s how the blockchain technology is enabling transparency starting from the supply chain.
Blockchain is at the heart of the tech buzzword of 2013, Bitcoin and is traditionally used among all crypto-currencies. However, in more recent years the use of blockchain technology has gone beyond financial services and generated new opportunities among entrepreneurs and brands of the fashion industry.
First of all, what is Blockchain?
“Digitally recorded ‘blocks’ of data are stored in a linear chain. Each block in the chain contains data (e.g. bitcoin transaction), is cryptographically hashed. The blocks of hashed data draw upon the previous-block (which came before it) in the chain, ensuring all data in the overall “blockchain” has not been tampered with and remains unchanged” – Blockchain Can
Blockchain is based on cryptography and math. It is “a system in which a record of transactions made in bitcoin or another cryptocurrency are maintained across several computers that are linked in a peer-to-peer network.” – Oxford Dictionary.
In a nutshell, transactions are more secure as the technology is built on a decentralized database and data is not stored only in a single location. Information is distributed between a network of computers and not monitored by a single organization and data can be accessed by anyone in the network, but it can’t be modified or deleted.
Records are public and can be easily verifiable by users with access to the system and furthermore, this decentralized and secure mechanism prevents the corruption of data or the database itself.
But what is the link between fashion and Blockchain?
The fashion industry is currently using the Blockchain technology to find sustainable solutions to provide transparency to the complex and obscure supply chain, product authenticity and improve data sharing.
As an example, LVMH Group, a conglomerate of brands such as Louis Vuitton and Dior, applies Blockchain technology to nearly 60 of its brands.
This revolutionary technology makes possible for companies to securely store and share data across their supply chain in full transparency and ultimately making the full manufacturing process easy to verify and trace.
As an example, the use of blockchain in the retail sector, is translated into a unique QR code for each product which can trace the full history.
It is a great tool for companies for committing to #WhoMadeMyClothes campaign (by Fashion Revolution), applying transparency practices while providing a sense of trust and ownership to the consumer and furthermore, setting a new standard of expectations for garment production.
In the diamond industry, brand De Beers and smaller start-ups like Taylor & Hart use blockchain to help trace their supply chains from mine to shop floor.
A major issue of the luxury world of the fashion industry is the growing presence of counterfeit goods.
In 2016, the OECD estimated that imports of pirated goods were worth nearly half a trillion dollars or 2.5% – 5% of global imports and the increase presence of online resale channels has generated a new market which resisted traditional policies.
To protect the authenticity of luxury products from the strikingly similar forgery ones, brands have been using serial number, watermark, hologram, barcode/QR code, however Blockchain technology represent a great tool to track and certify product authenticity from seller to buyer.
Blockchain company Chronicled, facilitates trust between trading partners with the use of smart tags to track authenticity across sneakers and gives full control to the consumers through their mobile app which allows to instantly scan the tag and access information on authenticity.
Despite the use of Blockchain for security purposes, the luxury sector is an extremely competitive landscape and in the context of data sharing, major brands are still reluctant to provide full information accessibility to competitors in fact, sharing precious data goes against non-disclosure policy and competition, making more difficult the spread of transparency at a larger scale and the efficient use of the technology.
The use of Blockchain technology is also at the base of innovative marketing practices and consumer engagement.
1trueid, collaborated with Italian menswear brand Alessandro Gherardi® and developed MTM Shirt which has embedded a secure tag and is connected to the brand’s app for a one-to-one engagement aimed to create a dynamic marketing strategy with tailored customer service, offers and event invitations.
Blockchain technology is empowering brands to take steps towards greater transparency and implementing practices in a more sustainable way. But, after all, is fashion ready to join forces and become a more transparent industry?
words and visual by Giulia Mummolo
NowFashion (Elisabeta Tudor)
Business of Fashion (Tasmin O'Connor)
Fashnerd (Muchaneta Kapfunde)
Fashion Technology Accelerator (Marco Filocamo)
(via Ledger Insights)
(via Blockchain Can)