Why Blockchain is the new Fashion.

Since the beginning of civilisation when we dressed our bodies with animal skins and foliage to the modern era of cutting edge, biodegradable and cruelty-free textiles — fashion has come a long way. Yet, the fashion industry is infamous for being the root of several environmental and ethical concerns. The industry is known as one of the most polluting industries in the world, with its overproduction of resources and contributions to water, air, and soil pollution. Not to mention the source of major ethical issues such as its use of child labour, inhumane working conditions, counterfeiting and under-appreciation of creative value.

It is undeniable that consumers are becoming more environmentally conscious about the brands they wear. This emerging sentiment within the industry has led to the constant conflict between quality, trendiness and environmental impact, which in turn fuelled a new business trend termed as “Greenwashing”.

Greenwashing is an effective marketing tool designed to deceive consumers into believing that a company is doing more to protect the environment than it really is, with the effects being more cosmetic than real. It is the process of creating a false impression by providing inaccurate information to consumers about how a company’s products are environmentally friendly without any substantiated claims.

Limited public access to information coupled with the seemingly bottomless advertising has further enabled more businesses to engage in greenwashing techniques to exploit consumers, and there is little we can do to change consumer spending habits.

Given the hyper-consumerist nature of society today, how can we ensure that the future growth of the industry is a sustainable and ethical one? The use of blockchain technology is integral to the industry’s repositioning to fulfil the demands of the 21st century in a sustainable manner.

Fundamentally, supply chains in the fashion industry categorise and manage stakeholders, activities and information to circulate products from producers to consumers. Most companies choose to adopt and maintain opaque supply chains to protect their brand image and economic interests. However, opaque supply chains are destructive to environments and undermine the welfare of people, animals and communities. Every form of business and its product are unique, but we often lack the information needed to make the right decisions when buying products.

Blockchain can empower businesses to start adopting greater transparency by providing consumers with supply chain insights. Businesses can effortlessly collect and display product information and the relevant supply chains, as well as verified evidence to support their claims. By associating such information to products through smart labels, we can learn about the origin, processes and impact of the products we consume.

Blockchain is an open, decentralised and distributed ledger that is used to securely and permanently record transactions sequentially. It can be viewed as a shared database across a public or private network and each user on the network owns a version of this shared database, which protects the contents of this database from third-parties’ (malicious actors) attempts to modify the contents. Users can only append to this database, or ledger, but will not be able to alter anything after. The decentralised nature of blockchains provides a peer-to-peer network that excludes any middlemen or governing authorities — including banks and governments. Additionally, smart contracts enabled on blockchain platforms, such as Ethereum, can automate any actions corresponding to contractual agreements, enabling the performance of credible transactions without third parties.

By allowing information to be shared securely, its ability to offer transparency and immutability of data makes it ideal for use in any supply chains that are becoming increasingly dependent on greater information-sharing, visibility, and trust. This solves the problems of cumbersome and minimal sharing of data between stakeholders in conventional supply chain systems since they are centralised and non-homogeneous by nature.

In the retail sector, blockchain solutions can track and verify products by creating a physical-to-digital association between products and their digital identities. For instance, this can be done by assigning a physical identifier such as a QR code to each product which links back to the product’s digital profile — tracing the complete history of a product including all design, production, distribution, and transaction processes. This provides consumers with transparent information about the products, enhancing traceability and transparency throughout the full supply chain and in a secure manner.

Any form of claims made — whether the product is recyclable, organic, vegan or supports local community — can be supported and verified with evidence provided by the company or third party verified certificates. Brands can thus verify their ethical manufacturing practices, sustainable materials origin, and products authenticity — to combat counterfeiting. In other words, the creation and consumption of blockchain verified products will guarantee supply chain transparency, secure intellectual property, and improve the efficiency of data sharing.

As far as data sharing is concerned, a blockchain is designed to be collaborative and all-inclusive. Even though blockchains can be shared through a public or private network, private blockchains do not add any true value in the context of implementing sustainable solutions for the fashion industry. This signifies that for blockchain solutions to be truly efficient, the major players of the industry would have to collaborate and share their resources to create a central blockchain. However, this would imply the sharing of valuable and sensitive business data between companies.

At first glance, this concept might be perceived as a far-fetched one, as it inherently disregards any brand’s non-disclosure policy and eliminates competitions. Fast-fashion brands might struggle more in comparison with independent brands when it comes to taking the first step, considering their opaque and mostly unethical business practices.

Considering how we are at such a pivotal point in consumer culture, this transition is vital to the restructuring of the fashion supply chain on a global level. Consumers are the key here, once they develop the habit of consuming blockchain verified products, the growth in demand will put a pressure on fashion brands. Companies need to realise that committing to verified digital identities for their products should be what they are betting on as it will build consumer trust and loyalty, improving the customer-brand relationship in the long run. If a product has a blockchain-based digital identity, it comes with the reassurance factor that the product is authentic and sustainable. The shopping experience is enhanced as the consumer gets quality assurance and the brand’s image is preserved as well.

Nonetheless, getting companies to consider applying QR codes to their products will be a slow and difficult process but it is not an impossible one.

This constructs a more interconnected system since the users participate in all the processes, — the creation of a design or style, advertising, and deciding the price — and are in turn rewarded with incentives in the form of tokens. Essentially, consumers are buying the uniqueness and creativity of the design. If the user requests for changes to be made to a current design, while still lying within the style of the designer, the user can communicate with the designer and pay in cryptocurrency to acquire the item. As opposed to the purely transactional process of buying an item directly from a retail store, we would actually be involved in the design and creative discussions while paying less for the product when we pay directly to the designer.

Disclaimer: The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of the aforementioned companies. Provided details and brand mention is for informational purposes and is not intended to represent financial and/or legal advice.

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