"It's Actually Cerulean:" Why Fashion Insiders Should Care About Blockchain
Thursday marked the first day of both New York Fashion Week (NYFW) and Fashion Month, taking place in the ‘Big Four’: NY, London, Paris, and Milan and rapidly expanding to urban centers like Berlin, LA, and Shanghai.
Twice a year, in February and September, fashion insiders and influencers gather in these cities for runway shows and industry events. Blockchain, discussions about which still remain in the spheres of tech, finance, and enterprise use cases, is not yet too familiar in these circles. However, more behind-the-scenes insiders in the fashion, luxury, and beauty industries are becoming aware of how its properties can be applied to their markets.
Why are they paying attention?
Blockchain technology, defined by Gartner as a “type of distributed ledger in which value exchange transactions… are sequentially groups into blocks,” provides an immutable and transparent ledger of transactions. The technology promises to transform industry operating models, underpin new economies of trust where brands were previously untrusted, and reduce friction in business operations by “providing transparent access to the information [on] chain.”
Transactions can’t be modified and can be viewed by anyone. It is this added trust and transparency that is so crucial to fashion brands, who see blockchain as most promising for supply chain management and consumer engagement around product provenance, serving both operations and as a branding and marketing tool.
The security of blockchain technology is an added benefit to combat rampant counterfeiting and environmental waste and pollution in the luxury fashion, accessories, and beauty industries. As JWT Intelligence wrote: “Blockchain’s transaction ledger is perhaps the most secure tool available today to verify authenticity, a major concern in the luxury goods sector.”
Storytelling & Consumer Engagement
Fast fashion may not be going anywhere anytime soon, with brands like H&M collaborating with luxury designers and fashion favorites like Karl Lagerfeld and Kenzo while Zara has become a staple of high/low dressing. But emerging fashion and luxury brands, from accessories to beauty, are changing the game of consumer engagement with purpose-based messaging.
Consumers now expect constant communication from brands and even runways shows, that staple of Fashion Week, are now consumer facing. According to Hilary Milnes: “In response to pressures brought on by social media and see-now-buy-now consumerism[,] the fashion show now has to somehow provide different things to two very different groups of people. It has to be a source of entertainment and engagement for the public, as well as present a comprehensive new collection of product to the buyers and the press that critiques them.”
The rise of social media has begun to dominate the fashion world, with most brands barely able to keep up, and brought with it social media influencers and see-now-buy-now. Smaller brands like Everlane and Reformation, brands that tout values like transparency and sustainability as part of both their business models and marketing and branding strategies, have found their market fit specifically in ethical fashion and consumer engagement on social media.
Blockchain technology offers these brands, along with big names like Gucci and Tommy Hilfiger, the ability to tell the story of each product they produce transparently and immutably. Through tools like Chronicled’s Discover App, consumers can directly engage with brands and the products they buy via a simple user interface, which can display the entire history of an object, and the use of a variety of identifiers from our own encrypted chips to QR codes.
Supply Chain Security & Transparency
As exemplified by the success of brands like Everlane and Reformation, supply chain transparency and the audibility of sustainable practices are becoming more important to consumers. With fashion being the number two largest polluting industry in the world after oil and tragedies like the Rana Plaza disaster bringing attention to the plight of factory workers, the fashion industry is no longer trusted. Films like The True Cost make evident the serious humanitarian and environmental costs of the current system.
With revenues around $600 billion per year, counterfeiting hurts brands and consumers alike. On the resale market, consumers are often unsure of whether they are purchasing the real thing or a fake. Sites like TheRealReal have sprung up to serve as authenticity providers and verifiers of luxury products, but they still have no way of guaranteeing trust. Counterfeiting also serves to undermine attempts within the fashion industry to change production processes for the better, with counterfeit products often being produced in the same factories (where humanitarian cost is high) and with the same processes (creating pollutants and environmental waste) but with a lower markup.
The impetus is on fashion companies to change and prove to their customers that they are doing so. Blockchain technology has the ability to give brands the ability to provide both transparency and audibility to garner greater trust and brand loyalty throughout the product lifecycle.
In addition to storing the digital records of supply chain history in a decentralized, tamperproof, and transparent manner, blockchain technology allows for the seamless exchange of digital assets. By giving each product a unique identity, via a component like a secure encrypted chip or even a simply attached QR code, the marriage of blockchain and IoT allows brands to show the path of a product from raw goods to manufacturer to distributor to retailer to consumer and even then to the resale market.
All this can be managed through simple mobile and web interfaces like the above.
As consumers and media consumption change, so does the fashion industry. Consumers now want to know the true costs of their products and the history of their production.
In the immortal words of one Meryl Streep as Miranda Priestly: “It’s actually cerulean.” With blockchain, fashion consumers can now know as much about the history of cerulean sweaters as Miranda, and fashion brands can once again become trusted and forces of positive change.