Although the fashion industry earned more than $1 trillion in revenue in 2018, its supply chain continues to face challenges from waste, ethical issues, and counterfeiting. But blockchain may have the ability to address or at least alleviate these concerns.
Blockchain has become a revolutionary approach to transactions and data storage, which can solve many obstacles that hinder the development of the fashion industry.
First we will explain it in detail so that you can understand it better, and then we will introduce the above dilemmas one by one. Now let us start with the most obvious question: what is Blockchain?
◎What is blockchain?
In short, blockchain is a distributed, immutable digital ledger whose audit process is open and transparent. This is a simple definition, but let’s dig deeper. How does blockchain work?
Essentially, blockchain is a way of keeping records that does not require third-party oversight. Every member of the network is authorized to change records without relying on an intermediary (such as a bank). When any request to change the record occurs, a majority of blockchain participants must approve it before it can be executed.
So how to implement blockchain on users and benefit them? Here are some key benefits that will help increase the utility of blockchain. Keep in mind, there are many more, but the following are the most relevant.
(1) Eliminate the middle department (decentralization).
(2) This is the so-called peer-to-peer network P2P (peer-topeer network). The blockchain can make changes to each project without the approval of any core role. There are three important ways this benefits users:
First, blockchain removes all red tape and reduces your reliance on middlemen. It can also speed up change. speed.
Secondly, if any action occurs, the blockchain empowers members of the network, giving them enough power to make their own decisions.
Third, blockchain eliminates the behind-the-scenes secrecy that many entities employ when executing transactions.
(3) Blockchain allows complete transparency. Blockchain members can read all records on the network. And these records are tamper-proof, meaning no one can delete or update any part or all of the records. Blockchain therefore allows people to easily see every action that takes place.
(4) Blockchain makes data easier to track. Due to the transparency and immutability of blockchain, the process of seeing specific value associated with a product becomes easier. You can clearly see who did what and when from start to finish.
◎Blockchain Solution
So how can blockchain make it easier to solve the problem at the front of the article? Questions asked? The following are ways to use blockchain technology to solve these problems:
(1) Excessive waste
The amount of waste generated by the garment industry has reached depressing levels. Just looking at the Burberry scandal in 2018 will give you a more realistic understanding of the fashion industry. In other words, the high-end brand destroyed 28.6 million pounds (equivalent to 36.9 million U.S. dollars) worth of unsold inventory last year.
What are the reasons for destroying inventory? Just to maintain the brand image and convey to consumers the unrealistic illusion that they have bought all the products. But while these tactics may make brands look more aspirational, in addition to being bad for the environment, they also burn a lot of money. When unused materials meet the same fate, it is ultimately waste.
Using blockchain can greatly reduce the severity of this problem. Blockchain allows every piece of material to be bound to the value on the network. Because data is easy to track, you can see where it goes. Some companies have already implemented this approach: QueensofRaw uses blockchain to track the whereabouts of extra textiles and reship them to buyers.
(2) Counterfeit goods
Counterfeit goods are a serious problem in this industry. In fact, the EU market suffers billions of euros in losses every year. These unpopular products enter the production and distribution cycle and may account for about 10% of total profits.
This is where blockchain traceability once again plays a key role. If the data has been established, each item is related to the price on the network. If counterfeit goods find their way into the product line, the item will have no such value. So whenever there is a discrepancy between the data and the item, the item should not exist.
(3) Unethical behavior
The decentralization of the blockchain can be based on the trust system Help prevent unethical behavior and factory disasters. Since any move depends on community approval, no company can do whatever it wants. Instead, it first needs to align its interests with those of its shareholders, customers and employees themselves. This will make any company trying to scratch the surface of working conditions and the rest of the blockchainThere are some disagreements.
◎Balanced Business Model
Blockchain provides solutions to many problems faced by the ready-to-wear and fashion industry effective solutions.
Blockchain is still a new concept, and we are still exploring its capabilities and limitations. Still, even in its currently undeveloped form, the technology could still solve some of the industry’s problems. Over time and as usage increases, blockchain should help build a smarter, more secure and more balanced business model.
