Fashion businesses make up an industry that amounts to billions of dollars and is booming constantly. As a result, companies must embrace innovative technologies like blockchain if they want to stay ahead of the curve. These days, customers want to know how the clothes they purchase are made – in other words, they prioritize sustainability more than ever, looking for responsible brands with high ethics.
In the digital age, transparency is crucial, and businesses can only stay relevant if they meet customers’ demands. Blockchain has been on everyone’s lips in recent years, and it is mainly associated with cryptocurrencies like Bitcoin that can be traded on Binance or other exchanges. However, its applications go beyond digital currencies – this technology has tremendous potential and is transforming many industries, including fashion.
Blockchain explained: what the technology is all about?
The concept of blockchain may seem inscrutable when first hearing of it, but in reality, the technology is actually very straightforward. Essentially, it represents a ledger where information is stored in blocks that are all interconnected. All the blocks hold crucial encrypted data, like the hash of the previous block, the time stamp, and the data of the transaction completion. Once the information enters the block, it stays there forever, as it can’t be deleted, modified or changed. If there’s an attempt to alter the data in the blocks, the technology detects it quickly, ensuring great transparency and traceability.
Blockchain can be utilized with smart labels, QR codes, and radio frequency identification tags, allowing the data to be easily transmitted from the label, code or tag to a reader device or a mobile phone. Moreover, blockchains also have applications for real-life products like shoes or handbags, acting as a link between these items and the ledger, which includes data like ownership history and the source of the product. This allows consumers to scan QR codes and see all the information, which further helps them make informed purchasing decisions and check the authenticity of a specific product.
How does blockchain increase transparency and sustainability in the fashion industry?
Nowadays, it’s becoming increasingly common for customers to buy fashion goods online. And although this has great benefits, it prevents them from physically inspecting the items before paying for them. Due to this reason, brand owners started looking for identification methods to help deal with these challenges. Moreover, trust plays a crucial role in consumer purchasing decisions, and sustainability and transparency are two factors that determine whether customers find a brand reliable or not. In the past few years, there have been many reports regarding unethical labor practices, microplastics, overproduction, and so on, with the fashion sector coming under intense scrutiny. The social and environmental aspects of a manufactured good can be significant. Since clothes production involves complex supply chains, luxury brands struggle to track the products’ conditions and the materials used in the process. Fortunately, blockchain technology is a great solution to overcome the challenges of inefficient supply chains, shining light on the clothes’ story and helping move from the fast fashion trend towards a more sustainable industry.
Blockchain monitors an item throughout its lifecycle, meaning it can track the supply chain from the initial stage to the last one while also sharing information on the source of the raw materials. As a result, a permanent, immutable record of the materials is created. Seeing all the steps in the production process translates into improved traceability, eliminating inefficiencies and allowing consumers to understand a product’s social and environmental impacts before purchasing it.
Moreover, blockchain benefits designers, too, helping them protect their intellectual property. Since the products can be tracked, consumers and retailers can check whether they are authentic, which reduces the risk of counterfeiting.
Fashion brands can take advantage of blockchain technology to boost storytelling by documenting the entire design process. This can foster customer trust, helping them understand how the clothes were created and if responsible standards were met in the process. As long as sustainability is a priority during the process, customers are able to find value in the clothing items they purchase.
Undoubtedly, the fashion industry has dark aspects regarding the supply chain, and consumers are well aware of this. However, blockchain can transform how the sector is perceived, bringing more love to clothes, which can be such beautiful creations if ethical principles are considered in the manufacturing process.
Challenges in adopting blockchain in the fashion sector
There’s no doubt that blockchain is an innovative technology with massive potential to enhance the traceability and authenticity of products and the transparency of the entire fashion supply chain. However, it is relatively new and unregulated, with no standards in place for structuring blockchain solutions’ development. Not only that, but it is also an expensive technology, meaning that smaller ventures can’t really afford to invest in it.
Another issue associated with blockchain is its perceived environmental impact. The technology has been under scrutiny for a long time due to its alleged high-energy consumption. This has raised concerns regarding the uptake of blockchain in the following years. This perception may be relevant regarding the technology’s application in crypto, but it’s worth noting that this doesn’t apply to all industries. Therefore, it’s essential to treat this stigma with caution, as it is not a factor that should prevent adopting the technology in the fashion sector.
Now, it’s evident that blockchain alone isn’t enough to solve all the issues regarding transparency in the fashion industry. Other solutions are required, such as implementing stronger regulations.
The bottom line
Fashion businesses can easily integrate blockchain into their current practices and reap this technology’s great benefits. With blockchain, you can build a stronger relationship with customers, assuring them of ethical sourcing.
Although many tech solutions have been developed as a way to combat counterfeiting, they aren’t effective enough, so brands should look for real-world strategies that help them deal with this issue, such as implementing efficient supply chain controls and creating solid online monitoring programs, among other things. Blockchain can also be very helpful to this end because it easily identifies a product’s provenance, which may help companies save money in the long run.