Blockchain - Can It Help The Fashion Industry Become More Transparent?

By Corinna Elsaesser

Fanfare Blockchain - Can It Help THe Fashion Industry Become More Transparent?

Blockchain. You‘ve probably seen it mentioned before in finance news, most likely in the context of Cryptocurrencies like bitcoin. That all sounds a bit abstract and complicated, but Blockchain can actually play a significant role in areas other than finance.

Blockchain has become increasingly popular in the fashion industry. We all know by now that the fashion industry is one of the biggest polluting industries and is in need of a big change, and this is where brand new technology may come in to play.

But let’s first take a general look what Blockchain actually is.

As the name suggests, it is a chain of blocks, whereby each block contains data with a timestamp. Combining these blocks creates a database, and linking each of these blocks together into a chain they form - guess what? the blockchain.

The access to this set of data can be either limited to only a few people or a wider group. Only the user who owns a special so-called ‘cryptographic’ key is able to add a new record. The data is not saved in only one location, but decentralised. The important part is that old blocks - the data part of the chain - are preserved forever and can not be changed or manipulated afterwards, creating a secure and fraud-proof way of storing information.

Now to translate that into the context of fashion.

Much like the technology seen in RFID, each physical raw material or garment can receive a digital identity. This is achieved by attaching a ‘cryptographic’ seal or serial number, which can be in the form of a QR code attached as a tag or as a microchip inserted into the fabric itself.

There are two key areas in the fashion industry where Blockchain can play a significant role. The first one is the rapidly growing second-hand market. By giving a product a digital identity the product keeps a record which is unalterable and helps second-hand resellers to spot any fake product. The counterfeit would simply not be verifiable in the chain and can be identified easily.

The second key area is the Fashion Supply Chain.

One of the biggest challenges with fashion supply chains is the lack of transparency. Often big fashion houses don’t necessarily know where their raw material comes from, especially if a third party factory sources it for the production of a garment.

Moreover, the brands might not know if the factories work with subcontractors to produce their garments and so on. On top of that there is a lack of information on how much by-product is created or natural resources like water are used during the production process. Blockchain technology can help the fashion industry to achieve greater visibility of the product journey by gathering and generating data across all the touchpoints of the supply chain, giving brands the ability to investigate the full supply chain and trace a garment back to the farm where the raw material is first produced. By making all of this information measurable, brands will be able to focus better on implementing supply chain solutions.

It also has benefits for us as conscious consumers. Imagine you walk into a store and would like to know where your product comes from. By scanning a QR label with your smartphone you can get immediate access to information on the origin of the fabric, the factory where the product was made and the journey of the garment. It can give you the right care instructions and even inform you about how to recycle the product in the right way.

Some brands have already been using blockchain for customer returns and helping with the refurbishing old garments. When customers return damaged items in-store, Blockchain data can help identify what parts are exactly needed for the repair. If for example buttons are missing it can be easily identified by any sales associate or customer service member which exact button it is and can be dealt with right away. This saves time as it doesn’t have to go through the design or production team.

Another benefit is that recycling companies could identify what the product is exactly made of by scanning the tag. One of the biggest difficulties with material recycling is the fact that every material type needs to be treated differently in order to be recycled correctly, and labels can go missing or are sometimes misleading. With blockchain technology, all of the guesswork is removed.

But now back to the initial question. Can blockchain help the fashion industry to achieve greater transparency?

It can if it is used in the right way. If the data which is fed into the system is accurate and authorised it can help the consumer spot Greenwashing easier as brands are forced to reveal their full supply chain. As the data in the blockchain cannot be tampered with, it gives a greater reassurance to consumers that the promises of are brand is true. However, an overall concern at the moment about blockchain is the excessive use of energy. The annual energy use of bitcoin for example currently equals the energy use of Switzerland. Bitcoin is currently working on using renewables sources to combat the issue, but there is still some way to go.

However, transparency alone is not enough to achieve a completely sustainable fashion industry. It is only the first step. The next step would then be to use the data to make improvements to the supply chain. Sustainability standards still need to be set in place and brands need to be audited by external organisations in order to truly understand how they are contributing to the industry, either positively or negatively.

To summarise, the concept is of Blockchain in Fashion is a great start, but we still have a lot of work to do before it can be implemented to make real and lasting change.

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