There’s a growing trend that the consumers and companies started looking for transparency. Now, it is not all about the design and fabric sought by the consumers. Over the period, they have started investigating the story behind their clothes. And this is pushing companies to start focusing on manufacturing in a more decentralized way. As a result, the necessity of adopting sustainability and supply chain transparency appears prominent for businesses to increase their sales. Thanks to the blockchain. Introduced to the fashion world for the first time in the Shanghai Fashion Week 2016, today blockchain is making marks around the apparel sector.
Blockchain has enforced a notable shift in the operation of businesses around the globe. In this journey, the apparel sector is no exception. For beginners, blockchain is a set of interlinked blocks carrying data/records. These blocks contain information related to transactions with detail of participants, date, time, and other information. Each block has its own unique set of automatically encrypted information. The information can be identified by a unique code called “HASH”. This unique feature is being embraced by many to facilitate more intelligent business processes. With the decentralized and peer-to-peer network, blockchain connects stakeholders in the value chain.
Blockchain brings all supply chain actors namely, farmers, designing houses, raw material suppliers, manufacturers, transporter, distributors, retail outlets, banks, consumers, all under one roof. This nature enabled blockchain to block all the chances of failure as it’s not relying on a single entity. Moreover, blockchain’s record-keeping technology is being used in the apparel sector to ensure transparency in the supply chains, tracking the welfare footprint of employees, and in other areas. Leveraging on the unique feature, blockchain-driven retail or manufacturing process is growing at an incremental rate. However, it is still in its infancy as the only retailers and manufacturers have started adopting it in their operations.
Given its decentralized data storage solutions, it can also be used to enforce Intellectual Property Protection (IPP) covering designers and brand owners. With its ability to track products and verify their authenticity through brand owners, retailers, and consumers, it can help reduce the incidences of counterfeiting and fraud. Also, for consumers, they can get to know the products’ journey across various categories like wool, cotton, and linen to the state of the manufacturing process. Thus, consumers will get a whole new picture of the product experience. In short, blockchain is adding more ownership to the consumers. With just a minute, they can scan the tag and discover the history of the new dresses piled up in their wardrobes.
There are numerous ways blockchain is reshaping the apparel sector. By establishing a chain of transactions, it is scaling up the quality of products as well as ensuring efficiency in the manufacturing process. Blockchain is minimizing the fraud issues in the sector. According to Global Brand Counterfeiting Report 2018, the value of counterfeiting of sectoral brands like textiles, cosmetics, clothing, and footwear amounted to a staggering USD90 billion-plus. With its data protection and transparent feature, blockchain can enable customers to verify the information required to reject fake/counterfeited products or the batches that come from ethically questionable production units. Concerning supply chain, Blockchain is promoting transparency through its tracking feature ranging from manufacturing to delivery. This in turn ensures fewer product flaws in the supply chain.
The transparency feature coupled with the tracking process gives the producers a clear picture of the value chain. Thus, giving them the satisfaction of a proper handover of goods and final product labeling. It is evident that companies developing blockchain technology are adding solutions to foster ethical and fair apparel manufacturing processes. This is spearheading the sustainable production and consumption of apparel goods on a global level. Additionally, this is enabling brands to spot weak links in their operations, like faulty materials provided by a supplier or a manufacturing unit not maintaining quality standards.
Another unique feature it offers is, it makes the process to track royalty payments easier. With this, it allows the designers to develop and validate an unalterable proof of creation. Furthermore, it can also be used in various avenues such as, for trademarks creation, licensing designs, tracking royalty, or sales originating through unique designs. It is because the blockchain network with its high speed can verify the authenticity of the goods within microseconds. Also, it removes the necessity of middlemen which increases the transparency in goods transactions.
The data protection feature of blockchain creates its utility in the digital clothing sector. As you may be aware that the demand for digital clothing is rising across the world. It is a model where designers can give their customers a variety of options digitally to buy. Pioneered by a company called CryptoKitties, the procurement of digital goods has become a trendy means of making money from apps. In this process, the ownership of the digital garment gets transferred through Blockchain technology. This reduces the chances of copying/counterfeiting the design. This is how blockchain provides a solution to maintain uniqueness and quality in the design.
The writer is a Knowledge Management, Communications and Advocacy Professional working for an international development organization.
However, blockchain has its downsides too. Given it is new and requires quite a high-end technology, the recognition, adoption, and effectiveness remain limited to big companies only. The SMEs, particularly in the apparel sector, are yet to reap its benefit. So, it is need of time for big companies to come together to form collaborative blockchain working groups.
Through this, it will be easier to find out common challenges like the lack of interoperability of different blockchain networks and develop solutions. Another pertinent challenge is the skill gap. Currently, the skills needed to develop and use blockchain technology in this sector are not at par with the demand. Hence, capacity-building schemes for talent addition need to be offered jointly by the public and private sectors.
The apparel sector is the most happening sector worldwide, marching ahead with daily innovations. And this journey can be facilitated by adopting blockchain technology. Going forward, it can allow businesses can make an informed decision, claim authenticity, track ownership, and improve customer experience. In return, a win-win situation will prevail.
