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Why Retailers Should Embrace The Blockchain


In his first exclusive for WhichPLM, PixelPrivacy.com’s Bill Hess, shares some benefits of blockchain for RFA. Bill’s blog is all about making the world of online security accessible to everyone, and prides himself in writing simple guides that can be understood by anyone!

Many experts believe that blockchain technologies, cryptocurrencies and smart contracts will reshape most industries within the coming 10-15 years. And it’s already begun, as many companies are building a new type of service in one of these areas.

Although most of these companies are offering services that are still in ‘baby shoes’, it’s a clear sign that companies and investors are exploring new opportunities. Others even claim that most companies are simply scamming people as many applications or software programs aren’t even properly tested or their functionalities are incomplete. They warn companies, in industries like fashion, to be careful to implement these new technologies at this time.

Regardless whether you love or criticize the rise of these new technologies, you can’t deny the fact that there’s a lot of potential there. In this article, I’ll discuss how the blockchain can be used in the fashion industry and what the benefits can be.

Let’s get started.

Relevance for Fashion

Blockchain has a lot of potential in two particular areas in the fashion industry: Supply chain management, and inventory management.

The ultimate goal would be to develop an unchangeable record of transactions of the entire supply chain which can be shared and monitored by every party involved. Applying the distributed ledger technology, which is currently used in Bitcoin for example, has the ability to provide information of each transaction throughout the blockchain, which can’t be altered with.

Another advantage of keeping all the data visible is that supply chain experts can identify potential improvements quicker and improve the overall supply chain strategy of a fashion brand.

Radio frequency identification (RFID) tags are already being used in many industries, with popular retailers like Wal-mart embracing the technology. Unlike barcodes, which require being scanned manually, RFID tags can be scanned by entering an electromagnetic field. RFID tags can also be attached to pallets and shipments which means that if you combine tags with the blockchain technology, tracking supplies can easily be done from the very beginning of a product’s lifecycles all the way through the distribution network until that product reaches the customer. The speed and ease of tracking and monitoring would simultaneously save costs and improve efficiency.

An incredibly helpful advantage for fashion and the blockchain technology is that shipment records can’t be altered with. Suppliers won’t be able to claim that a shipment has been lost or destroyed, because all the original data is already saved in the blockchain.

If products would be monitored from the source in a blockchain, it would also protect designers and brands, because it would be tracked through the entire distribution network and the whereabouts and authenticity can easily be reviewed. This could also put a stop to the distribution of fake products from China to the U.S. and other countries.

Once RFID tags and the blockchain technology are aligned to successfully work together, the overall performance of the logistic side of fashion would be significantly improved.

No one can deny that this is an interesting area to investigate and explore further.

Blockchain Security

The current systems used in the fashion industry – storing data on a single server, often controlled by a single entity – are pretty vulnerable when it comes to hackers and other cyber criminals. Once such a centralized system is under attack, the entire network will experience the impact.

On the contrary, the blockchain technology is based on a decentralized system, meaning that all data on the network is distributed across all its users. In order to update and maintain changes in the network, newly added data is verified by the network as a whole. In the traditional system, transactions are verified and executed by one entity – a third party. The blockchain technology solves both of these issues as both the authorization and authentication are removed from the quotation.

The fact that every user in the blockchain owns a copy of the ledger – which is a device that stores the data of the network – and new transactions are being verified and updated by the network itself, tampering with the data in the blockchain is close to impossible.

Simply put, every block contains the hash of the previous block, which is a unique “number” that resembles a certain set of transactions. Thus, if someone tries to tamper with a block, the hash will also change which means that the next block will become invalid.

The only way to tamper with the network is by recalculating the entire blockchain, which is extremely time-consuming, or if someone owns more than 50% of the nodes in a network in order to verify “fake” transactions. But this would only be possible with very small networks. It’s impossible to own 50% or more of the nodes in the Bitcoin network, for example.

Transactions which aren’t approved by the majority of the network won’t be added to the network at all.

Early Adopters in Fashion

Although the blockchain technology is still in development stages, there are already some early adopters who claim the technology to become undeniably important in the future for the fashion industry.

Provenance, based in the UK, is an example of a blockchain technology company which has begun exploring the opportunities in this area, in collaboration with designer Martine Jarlgaard. As stated in their case study:

“Tracking the journey of raw material through the supply chain, this collaboration between fashion designer Martine Jarlgaard and Provenance highlights the role of blockchain technology in increasing transparency and substantiating claims in the fashion industry.”

Provenance created a service where you can track products with a unique ID. Products can be tracked throughout the production process, from raw materials to end product. Every unique ID contains the location, content and timestamp of the entire production process. You monitor the entire process through an application on your smartphone.

Provenance states, “The journey information was made accessible via the garment’s smart label. This serves as a Proof of Concept of blockchain implementation in fashion supply chains.” In short, customers know exactly where the raw materials are coming from, where the product is finalized, how long it takes and when it’s on the way to the delivery address.

Increasing Transparency, Trust & Efficiency

The blockchain technology creates an entirely new environment in regards to trust and transparency for buyers – both large-scale importers as well as normal customers.

The blockchain would provide new ways to automate many aspects of the logistic side, efficiency in tracking through electromagnetic fields which would save the industry a lot of time and energy as a whole. By eliminating human involvement in certain areas, the entire supply chain and distribution chain will improve.

Final Thoughts

Issam Andoni, of the Forbes Technology Council, wrote that blockchain will provide unprecedented levels of trust, and believes that the blockchain technology will continue to develop over the coming years.

And the development will only increase the applicability of the technology and broaden it to many different industries as well. The fact is, we’re still at the beginning of it all – and I for one can’t wait to see what the future holds for the fashion industry.

Lydia Mageean Lydia Mageean has been part of the WhichPLM team for eight years now. She has a creative and media background, and is responsible for maintaining and updating our website content, liaising with advertisers, working on special projects like our PLM Project Pack, or our Annual Publications, and more.Joining mid-2013 as our Online Editor, she has since become WhichPLM’s Editor. In addition to taking on writing and interviewing responsibilities, Lydia has also become the primary point of contact for news, events, features and other aspects of our ever-growing online content library and tools.