‘Blockchain’ whenever you hear this word, you probably think of cryptocurrency, especially Bitcoin, the virtual currency whose value increased rapidly over the past few years. While the major use of blockchain technology is at its best within the financial industry for virtual payments and other financial applications, other uses for blockchain is rapidly being developed across every sector of the economy. It is already on the verge of changing the face of the supply chain, which will eventually impact many businesses in the years ahead. And the fashion industry is just beginning to discover its possibilities.
Like any other industry, the fashion industry also has its own set of challenges. One of the biggest challenges faced by the industry is forged products that flood the market and take profits from the established brands. It also reduces the quality of the items and consequently damages the brand’s reputation. Another major challenge is shipment tracking and timely delivery of products with the right specifications. And blockchain has the potential to solve a majority of these issues.
- Intellectual Property Protection
Manufacturers and designers can protect their brands against counterfeiting using blockchain. The origin and ownership for each fashion product can be tracked all the way up to its source. As counterfeit products and replicas do not have any authentic chain of records, you can easily root out such products. Such concepts are already being applied by a majority of business leaders in the industry. In 2017, Martine Jarlgaard, London designer produced the first garments with smart labels that are recorded and tracked on a blockchain. Every step from getting the raw materials to finishing the manufacturing process was recorded with time and location stamps. Similarly, a fashion brand called Babyghost integrated NFC chips into their spring/summer 2017 collection. The NFC tags are identifiers on the blockchain. The customers can use an app to find out everything they need to know about a specific product. This concept not only prevents the diversion of profits away from the legitimate brands due to counterfeit products but also makes sure that the customers get the exact product that they paid for without any counterfeiting. Thus, it ensures the quality of products and protects the reputation of the concerned brand.
- Origin Tracking
By usage of blockchain with Internet-of-Things technologies such as Radio-frequency Identification (RFID), raw materials can be tracked from their source to the production factory all the way up to finished products that are then delivered to retailers through distribution networks. It can track the origin of each item and substandard materials can be rooted out at the source. It is also helpful to increase the overall quality of products and efficiency in the manufacturing process. With the help of blockchain, fashion brands can identify the weak links in their operations such as when a supplier provides faulty materials or a production team not adhering to defined quality standards.
- Reliable Supply Chain
The supply chain industry is still rife with inefficiencies and mismanagement, whether it is the supply of raw materials or shipment to the end consumer. However, blockchain promises to make these practices more transparent. Suppliers, who try to alter any record, can be identified immediately with the help of this technology.
- Royalty Tracking
Blockchain can make it easy to track royalty payments. It not only allows the designers to create an unalterable proof of creation, but it can also be used to license designs and trademarks. Also, any royalty payments and sales originating through the use of these designs can be easily traced.
Final Words
Blockchain-powered supply chains can be foreseen transforming the shape of the many businesses in the coming years. Due to the lack of technical awareness among consumers and businesses, this technology hasn’t been widely adopted yet. There are very few established standards that define how a blockchain network should be implemented. As blockchain technology is still in its infancy, it will take a few years to be standardized and become mainstream.