How brands in the fashion world can use blockchain technology.
The fashion industry, like many other retail sectors, is currently considering the countless opportunities provided by blockchain technology to find sustainable solutions for its business. The first edition of the Circular Fashion Summit which took place in Paris, in which industry participants discussed how blockchain can bring the most benefit to the fashion industry.
But what exactly is blockchain technology, you ask? This is a decentralized distributed ledger in which transactions are stored sequentially. In short, it is a technical tool that allows companies to store and transmit information throughout their supply chain — from manufacturers to distributors, with complete transparency and security. In the retail sector, blockchain is often translated into a QR code, which is subsequently assigned to each item of clothing — a code that can track the complete history of the item of clothing.
Thus, each wool yarn could potentially be associated with the name of the alpaca sheep from which it originated.
“One of our guides to sustainable development is the strategy we developed under the name Crafting Tomorrow’s Luxury. Looking to the future until 2025, we set ambitious goals that we want to achieve — the biggest goal is to reduce our environmental profits and losses by 40 percent, ”said Kristin Gulay, senior manager for sustainable innovation at Kering Group. “Having the current programs and strategies that we have, we are confident that we can go 20 percent, but for the remaining 20 percent we really need innovative and technical solutions for this. We also have an ambitious goal — to ensure 100% traceability of our key raw materials to the farm level, ”she added, referring to the growing research and implementation of Kering’s high-end blockchain technology. For its part, Kering’s most significant competitor, the LVMH group, is also currently applying blockchain technology to nearly 60 of its brands and plans to add additional features, such as protecting intellectual property and preventing advertising fraud.
Thus, when it comes to the fashion industry, blockchain can help luxury brands promote and test the ethical manufacturing process from A to Z, while confirming the authenticity and sustainability of their products. In other words, blockchain technology can help ensure supply chain transparency, protect intellectual property, and improve data sharing.
It is likely that luxury conglomerates that have the means to invest in this tool will find it easier to incorporate blockchain into their business and study its effectiveness in the long run. Independent brands — or even fast-growing brands that still have a very complex and opaque, mostly unethical business practice — will be uphill. However, their transition is crucial for the revolution in the global fashion supply chain. Whether the blockchain will allow to lead this change and fulfill its promises is still unknown.
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