How The Fashion Industry is Getting Benefits Using Blockchain Technology
【 Published by cryptoheroes | Editor: Jinia S 】
Blockchain technology is famous for its use in electronic payments and other financial implementations. Besides, other uses are quickly cropping up across different sectors of the economy. The fashion industry, for instance, is starting to discover how it can benefit from this technology.
The blockchain applications in the fashion industry emanate from the fact that it can create a physical-digital connection between goods and their different digital identities on a block. A cryptographic seal will act as the concrete identifier in this case. Consequently, a record will be made on the blockchain every time a product moves from one person to another. This linking provides a more patent supply chain. In turn, it will be easier to detect counterfeit goods as they won’t have the physical-digital link. Also, suppliers trying to modify any record will be discovered immediately.
Similarly, with the immutability and transparency of transactions on a blockchain, parties are able to tell the precise point of deviation of the original product from an authentic distribution network.
The supply chain is not the only area in the fashion industry that can benefit from the blockchain technology. Let’s keep reading to find out more.
The Relevance of Blockchain Technology in the Fashion Industry
The fashion industry, just like any other industry, has its own challenges. One big problem that has been affecting this industry for quite some time is counterfeit goods flooding the market. Due to this, established brands have ended up damaging their reputation and even incurring losses. Another challenge has to do with shipment tracking as well as the timely delivery of goods with the correct specifications.
Let’s look at the different areas in the fashion industry and how blockchain can help solve certain problems in those areas.
Supply Chain Management
As mentioned above, one of the most relevant blockchain applications in the fashion industry is the supply chain and inventory management. Together with Radio Frequency Identification (RFID) and other I-o-T technologies, blockchain applications can help to instantly trace consignments of raw materials right from the source to the factory. Thereafter, they can track the finished goods throughout the entire distribution journey to the consumer.
It’s true that other tracking technologies have been around for some time, but none of them does what blockchain is able to do. With its distributed ledger, records made on the blockchain technology can’t be adjusted, lost or destroyed. Also, blockchain enables real-time access to amended product information as supplied by brands. Retailers are able to immediately get back to suppliers on matters such as stock levels and consumer feedback.
Fair Compensation
Did you know that the expensive jacket you are wearing might have been made by someone in the remotest part of India? Yes, many at times the people making intricate fabrics of greatest value dwell in remote places. Large fashion labels often hire these people at very low wages, which is practically exploiting.
Blockchain endeavors to integrate and include those people who have been neglected in the economy. Therefore, a decentralized application can be created for individuals living in despicable conditions to offer them a source of livelihood. The fact that blockchain naturally enables peer-to-peer trade means the middleman can be done away with, completely. People can purchase directly from people rather than from the brands. This way, production will be taken back to the locals- distributed hubs.
Protection of Intellectual Property
Manufacturers and designers can use blockchain to ensure that the origin and ownership of each item produced can be traced. Since counterfeits will not have an authentic chain of records, it will be easy to root them out.
You will be happy to know that these ideas are already being utilized in the fashion industry. In 2017, a London designer, Martine Jarlgaard produced the first “smart label” designs that are recorded and tracked on a blockchain. The consumer is able to scan the item. You can see every step of the manufacturing process right from raw material to the finished product. This level of transparency will definitely be an excellent selling point for shoppers. They can learn where and how their clothes were made.
Meanwhile, fashion label Babyghost also adopted this technology when they integrated NFC chips in their 2017 summer/spring collection. NFC chips are identifiers used on the blockchain and consumers have access to an app that they can use to know everything about a particular product.
This concept will go a long way in making sure that profits remain with the legitimate brands. Also, consumers will get exactly what they paid for, and not counterfeits. This will not only ensure the quality of products but also protect the reputation of the genuine brand.
Royalty Tracking
Another area in the fashion industry where blockchain can play a positive role is royaltytracking. This technology will enable designers to create a stable proof of creation. Moreover, it will license their designs and trademarks. They will also be able to track royalty payments and sales originating from these designs. This is the same system that the music industry is currently utilizing to track royalties using IBM’s blockchain platform.
From the above examples, it is clear that blockchain is the future of the fashion industry. However, it is still a largely unproven and unregulated technology. A few fashion brands that have embraced the blockchain technology. They have done so by employing developers to create their own applications. These applications only work with their suppliers and products. So, a single platform or industry-wide standards need to be formulated to make the technology more efficient and less costly.
The fashion brands should use their due diligence to make sure they select providers who have a good reputation in the industry. Additionally, they need to agree on who should be held responsible in case something happens.
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