Can Blockchain Save the Fashion Industry?

The answer is no. However, it can force the industry to practice what it preaches.

The fashion industry, like many other retail sectors, is currently looking at the countless possibilities provided by blockchain technology to find sustainable solutions for their respective businesses. Today, Paris hosted its first edition of the Circular Fashion Summit, during which industry players discussed how blockchain could best benefit the fashion industry.

But what exactly is blockchain technology, you ask? It is a decentralized, distributed ledger that stores transactions sequentially. In a nutshell, it is a technical tool that makes it possible for companies to store and transmit information throughout their entire supply chain – from producers to distributors, in complete transparency, and in a secure manner. In the retail sector, blockchain is often translated into a QR code, which is later assigned to each garment – a code that can trace the complete history of a garment.

So basically, each wool yarn could, potentially, be associated with the name of the alpaca sheep it originated from.

“One of our guideposts to sustainability is a strategy that we put together called Crafting Tomorrow's Luxury. Looking ahead to 2025, as we set up ambitious targets that we want to achieve – the biggest target is to decrease our environmental profit and loss by 40 percent,” explained Christine Goulay, Senior Sustainable Innovation Manager at the Kering Group. “With the current programs and strategies we have in place, we’re pretty confident that we can get 20 percent of the way there, but for the other 20 percent of the way, we really need innovation and technical solutions to do that. We also have an ambitious target to get 100 percent of our key raw materials traceable to farm-level,” she added, referring to Kering’s growing exploration and implementation of upscale blockchain technology. Kering’s most significant competitor, the LVMH Group, for its part, currently also applies the blockchain technology to nearly 60 of its brands and plans to add further functions, such as intellectual property protection, as well as the prevention of advertising fraud.

So, when it comes to the fashion industry, blockchain could help luxury brands promote and verify an ethical manufacturing process from A to Z, while proving the authenticity and sustainability of their products. In other words, blockchain technology can help to guarantee supply chain transparency, secure intellectual property, and improve the efficiency of data sharing.

In the context of data sharing, blockchain can be shared through a public or private network. However, Luca Comparini, Blockchain Lead of IBM France, is convinced that keeping blockchain within a private network would not add any real value to the discourse. Meaning that, in order to make blockchain genuinely efficient, the major industry players would have to unite their forces – and expertise – to create a standard blockchain together. However, this work process would imply the sharing of precious company data between luxury conglomerates. The notion could be perceived as unrealistic, as it ultimately goes against a luxury brand’s non-disclosure policy and sense of competition.

“Private blockchains are not relevant when it comes to finding sustainable solutions for the fashion industry,” Luca Comparini insisted. “A blockchain is a collaboration tool, a global spreadsheet that is meant to be shared,” he continued. Undoubtedly, blockchain is already revolutionizing the supply chains of major businesses across the board. And will impact many industry sectors for years to come. However, as of now, brands have barely started to consider applying QR codes to their products. “Technology is not enough,” stated Kristen Nuttall, Senior Sustainable Design Manager at Adidas. “Education is a priority as well, and we also have to hold polluters accountable for their actions.”

It will probably be easier for luxury conglomerates, who have the means to invest in this tool, to include blockchain in their businesses and explore its efficiency in the long-term. Independent brands – or even fast-fashion brands that still have very complex and opaque, mostly unethical business practices – will have an uphill climb. Yet their transition is crucial to revolutionizing the fashion supply chain on a global level. Whether or not blockchain will allow the luxury industry to spearhead this change and keep its promises remains to be seen. 

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