BLOCKCHAIN IN THE BUSINESS OF FASHION
Due to heightened awareness and the increasing dialogue about blockchain’s applications in the fashion industry, the ethical fashion community in particular has taken notice of blockchain. Sudhir Gupta, Head – Buying & Merchandising, Planning & Sourcing, ITC Ltd. (Lifestyle Retailing Business) shares his thoughts with IMAGES Business of Fashion on blockchain technology and what the emerging technology could offer fair fashion advocates…
Fashion brands are finally beginning to take note of the rising consumer awareness on traceability and sustainability particularly driven by the millenniums. These evolving consumers are deep diving into knowing the history of the apparels before they buy – the story behind each garment and where and how are they manufactured.
Moreover, mere claims or information is not enough to be trustworthy unless backed by detailed sequence of data on the complete value chain necessitated in wake of some or other global brand getting exposed of unethical sourcing or not being sustainable.
This is making fashion companies to attempt towards transforming their business models focused on delivering transparency of data—both in backend and frontend by employing the emerging technologies.
There has been a global buzz around new technologies like Artificial Intelligence, Augmented Reality, Virtual Reality and Blockchain for some time now and the global Fashion industry has also moved in the last few years to adopt some of these in ways it firmly resisted for a long time. However, blockchain applications haven’t really seen much adoption by fashion organisations.
So, What is Blockchain?
According to Digital Trends, blockchain is a database that’s validated by a wider community, rather than a central authority. It’s a collection of records that a crowd oversees and maintains, rather than relying on a single entity, like a bank or government, which most likely hosts data on a particular server.
Each ‘block’ represents a number of transactional records, and the ‘chain’ component links them all together with a hash function. As records are created, they are confirmed by a distributed network of computers and paired up with the previous entry in the chain, thereby creating a chain of blocks, or a blockchain.
Blockchain is the technology behind digital currencies like Bitcoin and involve cryptography while in a usability sense they are just shared database or digital ledgers that publicly show a record of transactions having happened. Every time a product changes hands, that information on change in custody is recorded by the user in the ledger and entry becomes linked to every other entry (or Block) and every other copy of the ledger is automatically synchronised via internet. The interconnection among all the blocks forms a chain and the complete application becomes the blockchain. The chain of custody on blockchain provides a record of the last party to gain custody of the product. So, blockchain means decentralised structure that provides security and transparency and thus making data trustworthy.
In broader sense, blockchain is not just technology, its impact goes beyond the industry or the society for creating a fair, safe and more transparent fashion industry.
Applicability into Fashion Business
Blockchain applications are not only for tracking virtual payments and financial transactions but have wider applications in securely distributing other product and supply chain information including complete database at SKU level. In other words, blockchains may be understood as
indexes of standardised information or in simple sense, these are communitygenerated data maps by brand and product.
Most promising application of blockchain in fashion industry could be in supply chain and inventory management. What blockchain technology can enable in the fashion business is uniform real-time access to updated product information supplied by brands, a universal pathway for retailers to immediately report back to suppliers on aspects like stock levels and customer feedback, the final consumer details and many more might come along once something like this new basic building block structure is in play. Distributed nature of blockchain technology makes it superior to other tracking technologies as here the records can’t be altered, destroyed or lost.
Blockchains have merely begun transforming apparel supply chains through technology such as track-andtrace and inventory management. But as other technologies like 3D printing and AI continue to advance, the fashion apparel industry may very well see much more dramatic changes in years to come.
Greater transparency in fashion supply chains will create new incentives for companies to change the way they do business and even how they view themselves as an organisation. If so, adoption of blockchain is only the beginning as the fashion industry may be entering a new era with vastly different forms of production and consumption.
Advantages of Blockchain in Fashion
Nowadays, one of the major trends in the fashion industry is sustainability and circular economy. Today’s consumers believe in fair trade practices and hence increasingly demanding transparency and want to know where the product is coming from not only in food but also in fashion. Blockchain enables fashion companies to securely communicate to the public the complete product story (DNA) for each and every fashion garment. This includes comprehensive details on all stages of product life cycle starting from design inspiration, raw materials, manufacturing and distribution to the stores and also providing visibility of all stakeholders involved in the value chain to create traceability and transparency in true sense.
Blockchain applications allow customers to scan the tag and discover the history of every garment and thus help in improving the customer experience.
Global companies like Patagonia and Everlane have been successfully betting on sustainability and supply chain transparency as a distinct selling proposition enabling customers to identify their suppliers.