Fashion supply chains are incredibly complex. They involve multiple layers, from sourcing raw materials to transporting them to factories, assembling them into garments or accessories, and then distributing them to consumers. In the past two decades, the push for high-speed, high-volume, and low-cost production has increased the strain on these supply chains. Nowadays, consumers are demanding more transparency regarding the sustainability and ethics of brands’ practices. Without transparency, supply chains can hide exploitative working conditions and significant environmental damage.
Enter blockchain technology. While many people associate blockchain with cryptocurrencies, its potential goes far beyond that. Blockchain can revolutionise transparency and traceability in fashion supply chains. Some industries have already taken advantage of blockchain, but others are still catching up. The fashion industry is beginning to realize how blockchain can benefit them.
Understanding Blockchain Technology
Blockchain is a digital ledger that records transactions across a network of computers in a decentralised and unchangeable way. In the fashion industry, it helps create a transparent and secure supply chain. Every step of a garment’s journey—from sourcing raw materials to manufacturing, transportation, and retail—is recorded on the blockchain. This results in a continuous chain of data accessible to all stakeholders, ensuring accountability and authenticity.
Current levels of transparency in the fashion supply chain
The demand for greater transparency in fashion supply chains has been growing for years, driven by public outcry after several major disasters like factory fires and collapsed warehouse building resulting in the death of many workers. Before these incidents, there was almost no public information about the companies using these factories. Some brands didn't even know their labels were found in the wreckage due to their limited oversight of suppliers and subcontractors.
Since these events, the incentives around transparency have shifted. Brands used to keep supply chain details confidential to protect trade secrets or avoid scrutiny of their business practices. Today, however, disclosing sustainability and ethical practices can give a brand a competitive edge.
Applications of Blockchain Technology in Fashion
Ensuring Ethical Sourcing and Labor Practices
Blockchain technology helps fashion brands provide verifiable information about the sourcing of materials and labor practices. Consumers can access details about where materials come from, ensuring they are sustainably and ethically sourced. Brands can also ensure that workers in their supply chain are treated fairly and that no exploitative practices are involved.
Combating Counterfeit Products
Counterfeit products have long been a problem in the fashion industry, deceiving consumers and damaging brands’ reputations. With blockchain, brands can create unique digital identifiers for each product, ensuring authenticity. Consumers can scan these identifiers to verify a product’s origin and authenticity, helping to eliminate counterfeit items from the market.
Enabling Circular Fashion
Blockchain can facilitate circular fashion practices by tracking the entire lifecycle of a garment. Brands can encourage consumers to return used items for recycling or resale, promoting a more sustainable and resource-efficient fashion ecosystem.
Empowering Consumer Decision-Making
Access to transparent and trustworthy information empowers consumers to make informed purchasing decisions. They can choose to support brands that align with their values and ethical standards. Blockchain fosters a sense of trust and accountability between brands and consumers, building stronger relationships.
Enhancing Brand Reputation
Brands that embrace blockchain for transparency gain a competitive edge and enhance their reputation in the market.
Adopters of blockchain in fashion
One of the first instances of using blockchain for transparency in fashion supply chains was in 2017, where designer Martine Jarlgaard partnered with blockchain technology company Provenance for a pilot programme that tracked raw materials through the supply chain to the completed garment. Each item of clothing was allocated a unique digital token, allowing for the verification of every step of its production. Customers can access the information on the Provenance application, after scanning the item’s QR code or Near Field Communication (NFC)-enabled label.
Challenges and Considerations
Implementing blockchain in the fashion industry faces several hurdles:
1. Cost: Implementing blockchain technology can be expensive.
2. Complexity: Integrating blockchain with existing systems can be complex.
3. Scalability: Managing a large volume of transactions can be challenging.
4. Regulatory Issues: Navigating the legal and regulatory landscape can be difficult.
5. Adoption: Encouraging widespread adoption across the industry can be slow.
Fashion brands can tackle these challenges by working with technology experts, investing in scalable blockchain solutions, and starting with pilot projects to test the technology's effectiveness. They should also educate their stakeholders on the benefits of blockchain and collaborate on creating industry-wide standards and regulations.
CONCLUSION
Blockchain technology is changing the fashion industry by bringing in a new wave of transparency and accountability. It provides verifiable data about sourcing, manufacturing, and supply chains, empowering both consumers and brands to make responsible and informed choices. As blockchain adoption continues to grow, we can expect a more sustainable, ethical, and transparent fashion industry that benefits everyone involved.
Currently, fashion brands are investing about around 1% of their revenue into fashion technology according to the stats. Blockchain is just one of the exciting tech opportunities in the fashion world. Many companies are also pouring resources into VR/AR, end-to-end supply chain integration platforms, AI-driven marketing, virtual showrooms, and more. The fashion industry is clearly undergoing a digital transformation to become more efficient, sustainable, and personalized. In such a competitive landscape, businesses can't afford to lag behind.