After a long, Covid-inspired drought, the apparel industry is setting up for a strong rebound. Consumer demand for fashion is expected to catapult growth in the sector to 9.8% by 2025 — an astonishing $1,311 billion in valuation — from more anemic levels that have persisted since 2015. But this growth, at odds with increasing consumer demand for transparent ethical standards in production, has unleashed a new challenge for manufacturing and an interesting savior: Blockchain.
The fashion industry has a long history of complex supply chain issues: unsustainable manufacturing; unethical labor practices; lack of transparency in the production process; overproduction of clothing with garments ending up in landfill, and this is just the tip of the iceberg.
But today as many as 77% of consumers agree that sustainability is an important decision-making factor when purchasing clothing. The question is how can the apparel industry keep up with clothing production demands while being held accountable to higher ethical standards and the promise of sustainability?
Enter blockchain, a decentralized, chronological, and public ledger of transactions across a peer-to-peer network. Using blockchain to track a garment – or food source, appliance origin, or financial transaction – can ensure transparency and traceability throughout its lifecycle. Blockchain is slowly but surely revolutionizing the way the supply chain is connected, from manufacturer to consumer.
In an expanding apparel industry more focused than ever on sustainability, here are three interesting applications for blockchain that go to the heart of enhancing transparency across the fashion supply chain.
The lifecycle of a garment begins when a raw material – like cotton – leaves the farm. The material is eventually woven into fabric, dyed, transformed into clothing, then mass produced for distribution. Creating a permanent digital record of what a single garment goes through from the moment the seed is planted will give consumers full visibility to all environmental and social impacts, and give manufacturers and suppliers full visibility into the production process. The ability to trace all raw materials will also create a more efficient, less wasteful development process when designing garments.
A current leader in this area is Lenzing’s TextileGenesis™ platform. Using this technology, they are able to issue blockchain assets called “Fibercoins” to physical shipments of Lenzing fibers. This provides real-time transparency into the flow of physical goods going from raw materials to finished goods.
It’s no surprise that with increased consumer knowledge of sustainability, the popularity of secondhand and rental clothing markets are rising. The luxury resale market is expected to grow from a $7 billion industry to $36 billion by 2024. Shopping secondhand is arguably one of the most sustainable ways to shop, but how do we ensure authenticity of these higher priced items? Once again, blockchain is the answer.
LVMH recently partnered with Prada and Cartier to develop Aura blockchain, the first private global blockchain open to all luxury brands. Consumers will be able to scan a QR code associated with their purchase, and see the entire history of the product. This technology will allow brands to strengthen their relationships with customers through transparency and even storytelling while protecting against counterfeit products as items get resold on secondhand markets.
Welfare of garment workers
The wellbeing of factory workers is often overlooked in manufacturing. Currently, most labor done throughout the supply chain is monitored by audits, leaving a lot of room for false reporting. These audits have not been effective as labor laws are not strictly enforced, and it’s easy for brands to lose sight of who’s involved in the production of their products. The ability to trace the lifecycle of a product means working conditions can be monitored in factories, while ensuring workers are being paid a livable and equitable wage.
Levi’s, for instance, partnered with Harvard’s School of Public Health to develop a blockchain platform to monitor well-being in the workplace. Surveys looking to gather insights on conditions, health, and safety at the factories were put on this platform and given to workers to fill out. Gathering this data on a blockchain ensures that the information is anonymous, traceable, and impossible to alter.
Using blockchain in this way is not a widespread practice, but the benefits are clear. The more garment workers are empowered to securely report unethical practices, the easier it will be to enforce ethical labor conditions, setting a new global standard for worker welfare.
Bringing authenticity and transparency to sustainability claims is no longer just something that brands should be doing – it’s essential to their business. From a messy supply chain, textiles that affect the environment, counterfeit products, to the well-being of garment workers, blockchain is a promising solution to a long list of issues within the fashion industry.