Today, blockchain technology is revolutionizing many different industries and sectors. The fashion industry is no exception. So, how exactly is this technology impacting the world of fashion?
Shaking up the Industry
Blockchain technology is changing the way companies do business.
In the fashion industry, blockchain technology allows companies to record and track transactions between buyers and sellers. In the past, that has been a manual process that resulted in a lot of paperwork. That made it difficult for retailers to track inventory levels and even verify where their products are coming from.
Today, the use of blockchain makes it easier for businesses to keep records of their transactions with other firms while also providing consumers with proof that they have made purchases from reputable sources. This allows them to know how much profit they should expect when selling clothes at retail prices versus discount prices on sale days.
It also gives consumers confidence about buying high-end products from designers who don’t usually sell directly online or through department stores like Walmart or Target. That is because these brands often require buyers to purchase items through retailers first before getting discounted prices on clearance items later down the line (which can mean losing money).
Ensuring Authenticity of Products
Blockchain has the potential to establish authenticity and sustain consumer confidence in your brand. It can help you gain an edge over your competitors.
A blockchain-based supply chain will allow you to track the product’s status at every stage of the supply chain, providing transparency of product origin, ensuring authenticity, and increasing consumer trust in your brand.
The use of blockchain technology also means consumers will be able to scan a product by using their smartphones and check whether it is genuine. So, you can ensure that no counterfeit products are sold under your brand name, which supports anti-counterfeiting initiatives and reduces fraud.
By increasing customer confidence and reducing counterfeit items, blockchain can improve brand reputation while reducing the amount of money lost through merchandise returns or refunds due to authenticity issues.
Becoming More Sustainable
Blockchain technology can help the fashion industry become more sustainable. Many people are unaware of how much the fashion industry is responsible for carbon emissions and pollution. The fashion industry is responsible for 4% of global waste, 100 million tons of CO2 emissions, and 93 billion cubic meters of water from its manufacturing processes.
Blockchain technology can also help with improving supply chain management, inventory management, product traceability, etc., all things that support sustainability within the fashion industry.
Cryptocurrencies Can Help Brands Increase Sales
Cryptocurrency may not be the way of the future, but it is certainly the way of today. With Bitcoin alone, this is about to get even more true.
We’ve seen how offering loyalty rewards in cryptocurrency can entice customers from outside a brand’s traditional customer base. But what if you could also increase your sales volume with customers who are already loyal to your brand? By offering loyalty rewards that can be redeemed for cryptocurrency and encouraging those users to spend their rewards on items they would have purchased anyway, brands can increase their sales volume by a significant margin.
Some businesses are turning towards blockchain as a means of enhancing customer experience by allowing customers to earn cryptocurrency through purchases made online and through their apps. That gives consumers an incentive to shop at those stores and increases foot traffic as well.
Bitcoin and Ethereum are not the only cryptos you can use to buy fashion products. Brands are welcoming to other cryptos too. Take Polkadot (DOT), for example. You might be wondering, what is DOT? It is like any other crypto but somewhat new. Even then, brands are accepting it as payment. You can learn more about DOT and how to buy Polkadot crypto from any exchange that allows its trade.
Luxury Brands are Joining the Blockchain Revolution
The blockchain has many applications in the fashion industry, and plenty of luxury brands are joining the revolution to protect their products. A 2018 report from Juniper Research estimated that by 2025, blockchain would be used by 40% of large clothing manufacturers and retailers.
With blockchain, we can ensure products are authentic. Brands like LVMH and Prada are using blockchain to make counterfeiting more difficult. Provenance is an example of this with its open-source platform that allows brands to track products from the factory through consumer delivery.
Tracking processes is also vital for sustainability purposes and for creating transparency for consumers. An Ethereum-based platform called Everledger tracks the lifetime journey of diamonds using smart contracts (computer programs) to record data about each step of the process like cutting and polishing information, dates, certificates, lab reports, etc.
That allows brands like diamond retailer Tiffany & Co. or insurance companies underwriting jewelry policies, to easily see if a product has been stolen or tampered with during its journey. Stella McCartney’s partnership with VeChain also uses blockchain technology to authenticate materials used in her designs. So, consumers know they are purchasing sustainable fabrics such as regenerated cashmere or recycled polyester or nylon sourced from fishing nets and other ocean waste collected via the company’s Net-Works program.
Reducing Counterfeit Products
Another way blockchain is helping sustainability in the fashion industry is by reducing counterfeit goods. Counterfeit goods are harmful to the environment because they use tons of resources and create waste. A report from The European Union Intellectual Property Office (EUIPO) shows that almost half of imported fake goods go directly to landfills, which can damage our environment.
Blockchain technology creates a unique token for every item throughout its supply chain journey, making it harder for counterfeiters to duplicate products or labels. Customers can scan the product’s barcode/QR code and see where and how it was made and its journey through the supply chain. That will help reduce counterfeit goods and make the fashion industry more sustainable.
As time progresses, the fashion industry will find more uses for blockchain technology. For now, the industry is happy with what it is getting out of this technology.
