BLOCKCHAIN IN THE BUSI­NESS OF FASH­ION

Business of Fashion - - Innovation Special -

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.

IM­AGES Busi­ness of Fash­ion

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