The fashion industry is complex in nature due to the involvement of multiple parties which requires a high level of coordination. Manufacturers, designers, supply chains, raw material suppliers are just a few of the many components of the fashion industry. These components are interdependent on each other; the customer on the retail store, the store owner on the logistics, the logistics on the supplier, and so forth. These components, often handled by different businesses, add a level of complexity to the fashion retail operations. Lack of transparency among these multiple components is one of the major issues that has been haunting the sector.
It often happens that manufacturers have no idea about the source of raw materials. Or a supplier is clueless about the manufacturer. This centralized and non-standardized data-exchange system can have negative consequences as the data can be modified or corrupted without the knowledge of the other parties. Another challenge that’s plaguing the industry is the counterfeiting of products. Illegal products take a huge chunk of the profit away from these companies and also damages the reputation of well-established brands. Tracing such products is a cumbersome task and often fruitless. Due to its traceability feature, blockchain can prove to be an excellent solution to solve the issues faced by the fashion industry. Here’s how blockchain can help:
How implementing Blockchain in the fashion industry can bring transparency
Blockchain introduces a decentralized ledger that stores transactions that cannot be modified once an entry is made and the details of which are visible to everyone on the blockchain platform. This can help the fashion industry in the following ways:
Tackling counterfeiting
With blockchain, the origin of the product can be traced to its source. The garments can be embedded in smart labels and the details of which will be recorded on the blockchain. NFC chips or QR codes will contain information about the product. The chips can be scanned with the help of a reader and will show the users the correct historical data of the product. This will help businesses, as well as end-users, to verify the authenticity of the product. Thus, such a system will help businesses root out counterfeit products easily and help prevent financial and reputational losses. The customers, too, are satisfied knowing that the purchase they made is authentic by verifying the product details from the blockchain.
Improving efficiency
Misplacement of products is a major issue in the fashion industry. This leads to an ample amount of time being wasted in tracing clothing items and other apparel. This issue can be negated with blockchain. With blockchain, the records in the supply chain will be stored on a decentralized platform. The information is visible to every member on the blockchain, but the entries made on the blockchain are immutable. Once an entry is made on the blockchain, it can’t be altered or deleted by others. The details about the products are available at every stage to every participating member in the blockchain. The traceability of the products is improved. In case of any misplacements, the product can be easily traced back to the last known location in the supply chain. For example, the blockchain startup Provenance has created a blockchain-based platform for fashion houses to track products. It allows the tracking of products right from the raw material stage to the production process. The products are scanned with an LCA lens, which then, stores the information on the blockchain.
Blockchain has the potential to transform the fashion industry. The only major challenge faced by blockchain for seeing large scale adoption in the industry is the lack of technical know-how among businesses and consumers alike. Primarily, businesses involved need to gain knowledge about the technology and understand how they can utilize it within their framework. Albeit on a small scale, blockchain is already making inroads in the fashion industry. It won’t be long before the use of blockchain in the fashion industry will be in vogue.
