Blockchain is gaining momentum in the luxury industry, particularly with the LVMH group. A sector that is also globalized at a more or less frenetic pace, fashion also has everything to gain by integrating this distributed technology.
This fashion market, estimated at $800 billion, reputed to be one of the most polluting on the planet and with one of the most opaque supply chains in the world, does not escape the requirements of end customers for radical and certified zero bullshit transparency.
An unprecedented situation in its scale and a sign of a genuine, widespread awareness, no less than 150 established fashion and luxury brands (including Nike, H&M, Armani and Chanel) responded positively to the Kering group call by signing the Fashion Pact at the G7 in Biarritz this summer.
Through the decentralized and distributed technology of blockchain, ready-to-wear brands can also benefit from a vector of tangible proof of their commitment to sustainability that is directly accessible to a connected, suspicious and over-informed consumer.
For brands and retailers, blockchain allows them to benefit from better visibility on flows via transfer of responsibility monitoring and therefore having a certification of the origin of the handled goods and their stock levels.
Consumers demanding radical transparency for an industry seeking eco-responsibility
The observation is clear: the rate of annual collections has risen from 6 to 24 in less than thirty years and continues to grow, the planet consumes 62 million tonnes of clothing per year and only 20% is reused or recycled, 1/4 of the raw materials purchased by textile manufacturers would be wasted each year.
Using 60% of non-biodegradable petroleum-based raw materials (polyester, polyamide, nylon, acrylic), fashion is considered to be the second most polluting industry in the world.
Fashion players are required to take into account their environmental impact at the risk of being called upon to boycott in the event of inaction or deception. The Havas Paris Shopper Observer 2019 study reveals that for 74% of French people, respect for the environment is an essential purchasing criterion.
Once a flourishing industry, the fashion market is increasingly challenged by travel and other experiences valued by younger generations. The generation of millennials is challenging the notion of possession and rehashing the cards of the right price, namely the user price. This approach explains the dazzling success of the second-hand market and rental offers. "Less is more" or buy less, but better, has become their favorite fight.
Moreover, facing every day all kinds of false information and other counterfeits, these well-informed customers, experienced in the exercise of deconstructing marketing strategies, are looking for more authenticity, a notion inherent to the luxury sector and less accustomed to the fashion sector.
A Pulse 2018 study by Shelton Group reveals that 90% of millennials are inclined to support a brand that respects environmental causes.
Brands have well understood that to find favor in the eyes of these young generations in their battle for attention, they must embrace their values and in particular those of sustainable development. Similar to the quest for naturalness found in the beauty sector with applications such as the French Yuka and the American Clean Beauty by Officinea, these urban people concerned about their health and that of their children want to be able to read behind the labels in order to detect all harmful substances. Indeed, according to a recent IFM study, 64% of French people believe that a sustainable fashion item is first and foremost a product that does not use chemicals that are harmful to the environment or the skin.
H&M, one of the leaders in fast fashion, whose environmental impact of such a business model (high inventory turnover, high volume, low prices) remains highly criticized but remains one of the most advanced fashion companies in terms of sustainable development. Recently, the brand has been offering its customers the possibility of accessing, by scanning each product label, information that has been out of reach until now, such as the names of suppliers, the names of factories and their addresses.
Fashion consumption also follows food consumption trends and while flexitarians reduce their meat consumption for both economic and ethical reasons, animal materials (leather, furs, feathers) are less and less found in the composition of clothing. Stella McCartney, a pioneer in sustainable luxury, has banned all raw materials of animal origin from her collections.
In this climate of suspicion towards fashion brands and biodiversity conservation, customers expect brands to act consistently between their corporate and commercial dimensions. And beware of those who might try to see only a communicating posture with a lot of "green washing".
Customers expect demonstrable and certified prooves and this is precisely what the blockchain allows, to allow better traceability in material sourcing.
Towards a better traceability of fashion collections through the blockchain
The idea of blockchain in fashion is to provide better information on the final product to the final customer, following the model of the activist organization Fashion Revolution and its iconic hashtag #WhoMadeMyClothes. It is a question of knowing the history of clothing beyond the label, whether it is the raw materials used, the suppliers/merchants, the production sites...
This is because the final consumer often finds himself disarmed in decoding labels: European legislation only requires manufacturers to mention the fiber composition and not the origin of them. Not to mention that the famous "made-in" supposed to indicate the place of manufacture actually only provides information on the country of final assembly.
It is a question of knowing the origin of the product by identifying all the people who have interacted with it, from its manufacture to its marketing.
Blockchain will be able to create a quality standard by preserving the integrity of the brands involved, in their desire to reduce their environmental impact, both through the use of bio-materials (Tencel, Econyl, Pinatex...) and through the use of short circuits (local sourcing...).
Reputed to be impossible to forge, the register of an open blockchain also presents an intellectual property challenge insofar as it makes it possible to protect designs designed by designers before the fashion shows and thus avoid seeing highly similar products flourish in the offers of fast fashion brands, specialising in this kind of imitation.
Thus, Italy, one of the most important creative areas in fashion, has decided to rely on blockchain. Last March, the Italian Ministry of Economic Development presented a first Blockchain pilot project aimed at offering creators unique protection and guaranteed manufacturing quality, in order to more effectively protect the "Made In Italy" label.
The blockchain-powered transfer of responsibility monitoring by the blockchain in support of transparency and security of supply chains in the fashion industry
By monitoring the transfer of responsibility, blockchain is able to provide the end customer with the transparency it requires and the fashion brand with additional credibility, particularly as regards the origin of the products intended for sale. The startup offers end-to-end visibility across all supply chain networks. It thus makes it possible to secure any transfer of goods.
The idea is to associate a commodity with a digital token registered on an open and public blockchain. Such a system makes it possible to know, on any network, who is responsible for what on any logistics network.
The start-up Ownest traces transfers of responsibility, which has the effect of lifting the veil on the flow of goods, whether they are transport supports (pallets, rolls, etc.), finished products (clothing, accessories) or unprocessed raw materials.