How the Fashion Industry Uses Blockchain

Blockchain may be better known for cryptocurrencies and NFT, but the fashion industry leverages it to build transparency.

August 16, 2021

There is increasing pressure from consumers for clothing brands to be transparent about their production process — including all areas of the supply chain and after a finished product is in their hands.

Consumers want to know that the companies are making their clothing items with the planet in mind — and that the brands they support are doing their part to reduce global carbon emissions and make products that don’t contribute to pollution and waste.

But how can businesses streamline this process and ensure customers are empowered with the information they want? How can businesses show they’re using ethical labor practices and making items in a sustainable manner?

By utilizing blockchain in the fashion industry, businesses can ensure that they meet customers’ demands and are as transparent as possible in their practices.

How the Fashion Industry Uses Blockchain Technology

In the fashion industry, the blockchain creates a trusted venue for businesses to deliver this information to consumers.

But what exactly is blockchain, and how is it utilized? While the first thing many people think of when they hear “blockchain” is cryptocurrency, it’s used across a wide range of industries and use cases. Broadly, blockchain is technology that’s used to share and distribute information.

In simple terms, blockchain

  • Serves as a secure, immutable and accessible ledger to record transactions and tracking assets in a business network.
  • Allows assets to be tracked (including different tangible products like clothing items and intangible assets, like branding and copyrights).
  • Allows access to this tracked information to a variety of parties, including manufacturers, brands and end consumers.

In the fashion industry, blockchain is often used to track the production process of clothing and provides a secure and transparent record of the steps in this process. 

How Blockchain Enables Fashion Item Traceability

In the fashion industry, blockchain gives companies a transparent and secure way to track and record all steps of clothing production through the supply chain — including the farming of cotton, sewing garments, dyeing them and transporting them to the consumer.

While many companies like adidas share full supplier lists, it can be tricky for consumers to sort through lists of hundreds of factories that may have been involved in the production process of the specific sweatshirt they’re buying.

With fashion industry blockchain technology, however, brands have a trusted way to track the full lifecycle of each product or garment.

How to Convey this Information to the Consumer

Simply storing track and trace information in the blockchain is only the first step. Brands must also find a way to allow consumers access to the information. That’s where a smart products platform like Blue Bite comes in to serve as the interface between the product and the blockchain.

A smart products platform is attached directly to the physical clothing item via a connecting technology, like NFC or QR.

  • Near Field Communication (NFC) Tag: Consumers can use their phone to tap the NFC tag that launches a digital experience containing blockchain access and more. This is the same tech that allows you to use the “tap to pay” feature on your phone.
  • Quick Response (QR) Code: These now widely popular codes can be easily scanned with a phone’s camera to access the digital experience. 

When a consumer launches a smart product platform on their phone, they can access a variety of information stored in the blockchain. Just a few examples are:

  • Where the cotton was sourced, how the garment was manufactured and more.
  • Specific information that amplifies a brand’s sustainability efforts — like that a pair of jeans was made with 75% recycled denim, or that a pair of workout leggings was made using 100% recycled materials.
  • Information on how your brand is carbon-positive and goes above and beyond net-zero greenhouse emissions.
  • Verification that the product is authentic.

This technology allows the consumer to access information both when they are shopping in a store — and deciding whether or not to buy a product — and after they go home, as they wear and care for the garment.

Why This is Important to the Consumer

Consumers are increasingly doing more research on where their items come from — including the countries and factories where they were manufactured — and the environmental impacts from the companies that made them. However, much of this information is not readily accessible.

By empowering consumers with a simple and secure way to access the information on how their clothing garments were made, they have more trust with companies.

Research from NYU Stern and IRI shows that from 2013 compared to 2018, there was a 50% increase in the packaged goods market for sustainable products — despite the category only accounting for 16.6% of the market share. Over the 5-year period, sustainably marketed products grew 5.6 times faster than those that were not.

The Future of Blockchain Technology in the Fashion Industry

For the fashion industry, blockchain technology will become increasingly important as the demand for sustainable products continues to rise. It empowers brands and helps them build a stronger relationship with their consumers.

As they are transparent about business practices and their sustainability efforts, consumers know they can trust companies to both share information and to take care in creating clothing garments that they can be proud to wear.

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