7 reasons why blockchain is perfect for the fashion industry
Most people think of Blockchain as being best suited for the financial industry. But Blockchain has a lot of potential applications in other industries as well, including the fashion industry. Here are 7 reasons why Blockchain is perfect for the fashion industry.
1. Trackable Applications
Today, most fashion brands are sold at second-hand markets or on e-commerce platforms such as eBay and Amazon. This involves people buying products online from many different sellers, which risks having mixed counterfeit ones. Blockchain is the best solution to this problem because it cannot be tampered with after putting an item on a blockchain. For instance, if people buy used clothing at eBay or Amazon, they will not know whether they are getting the real thing or a fake one. The most important feature of Blockchain is that it enables users to track data.
2. Transparency
Blockchain enables users to rate each other by voting, which everyone on the blockchain network can see. This is important because it allows the fashion industry to track who participated in the creation process and provides transparency over what happens with data throughout its life cycle, e.g., from where the cotton was grown to where it was finally sold.
Blockchain helps companies manage their supply chains by requiring those involved to rate each other based on specific criteria. For example, a cotton grower can rate a commercial company that purchases its products and vice versa. All other users on the blockchain network will be able to see these individual ratings, leading to increased accountability across the entire supply chain.
3. Product Traceability
Fashion brands can use Blockchain to record and verify their products' authenticity. The brands will be more trustworthy and transparent with consumers by doing this. Blockchain-based records may make it harder to counterfeit things because you can see the history of the product. It can also verify product authenticity and maintain quality across the supply chain. This is one of the things that blockchain technology could help brands do.
For example, a fashion brand creates a digital product passport for each item it makes. This passport includes information such as the item's origin, date of creation and what materials it is made from. When an item leaves a brand's warehouse, the company can add information such as store location and shipping destination to the passport. [So when you buy something from, for example, H&M, you can see its authenticity by looking up the item on a blockchain-hosted web page.]
If the customer decides they want to return an item, a brand could refer to its product passport and find out where it was originally shipped from, allowing for more efficient processing of returns. [And even who did the return/refund.] This process will not be possible if customers do not supply contact information when purchasing items online. Still, it is possible to find this information with the help of a nongovernmental organization.
4. Data Security and Privacy
Blockchain is a decentralized system with no single point of failure (i.e., it cannot be hacked), making it very secure for users who want to keep their personal data safe. With consumers demanding more transparency, Blockchain can assist companies by acting as a single source for all product information.
Back in 2019, several retail companies reported data breaches. This exposes them to loss of revenue, legal liability, and public trust. However, blockchain technology can provide digital garment tags with an immutable record of ownership history using distributed ledger technology that is tamper-proof by design. If adopted by major brands, it would be more difficult for counterfeit products to enter the market and increase revenue for both designers and retailers in the long term.
5. Auditability
Blockchain technology also enables users to keep track of how their data is being used and verify past transactions and what happens with it after it has been sold. All the data on the Blockchain is securely locked by cryptography and can be accessed using keys. This prevents loss, deletion or forgery of data throughout its life cycle.
6. Verify Authenticity
Blockchain can be used to verify the authenticity of fashion items, such as luxury handbags and shoes, which will help protect consumers from buying counterfeit products.
7. Improve Collaboration
Among stakeholders, another benefit of Blockchain is that it makes transferring data between fashion brands, suppliers, and retailers easier. This makes Blockchain a perfect solution for the fashion industry to connect with different stakeholders openly and transparently.
Fashion and Blockchain can prove to be very useful. In addition, it allows forthright brands to tell their story. Typically, the fashion and style industry involves a rather complicated supply chain at global and local levels. Because of the complexity of their supply chain, Blockchain is what the industry needs to develop further. In fact, some blockchain characteristics such as consensus, decentralization, and immutability make it perfect for adding more trust and security to the fashion industry.
Conclusion
Blockchain is a versatile technology that can be used in many industries. It's particularly useful for the fashion industry because it allows users to track data and provides transparency over what happens with data throughout its life cycle. Fashion brands can use this new technology to reduce counterfeiting, increase customer satisfaction, control inventory levels more effectively, and lower production costs by eliminating double handling of products during distribution channels. With so many benefits available for both customers and companies alike, blockchain will undoubtedly impact how consumers buy goods online moving forward. What are your thoughts?
