When it came to the exponential rise of e-commerce and online shopping, the fashion and textile industry, particularly luxury brands, was notoriously late. With consumers’ ever-changing demands, the fast pace of the retail and luxury fashion industry is rapidly accelerating. Blockchain technology has the potential to address long-standing industry issues by improving data management tools, improving supply chain operations, and decreasing the risk of counterfeit and fake products. Like the Lifestyle and apparel industry, Blockchain has grown and evolved since its inception. Although the technology was introduced relatively late in the fashion world, it has now augmented its use cases to make the sector highly efficient and transparent.
Counterfeit products are a worldwide issue. These products account for 3.3% of global trade and cost the US economy $600 billion per year. Companies have been fighting counterfeiters for years, investing significant time and resources to prevent the damage caused by fake poor quality of products, as well as clever lookalikes and reverse-engineered products which steal their sales. Companies have been forced to operate in the dark for much of that time due to fragmented data, networks, and sourcing arrangements that make it difficult to trace and authenticate. Manufacturers and Retailers in the lifestyle segment can now use blockchain solutions to detect and report fraudulent activity. Blockchain technology provides visibility, tracing, and record provenance data from source to sale and beyond for counterfeit detection.
The median transparency score among the top 200 fashion and textile brands and retailers is only 21%. Brands can use Blockchain to digitize, monitor, and trace the complete lifecycle of a luxury product. Brands can use Blockchain to establish an immutable record of all stages in the textile and apparel supply chain, capture specific data points such as sustainability in fashion certifications and claims, and make this data publicly accessible.
Brand trust is at the top of the list for sustainable clothing purchases for nearly two-thirds (62%) of global consumers. Transparency in the supply chain boosts customer trust, which improves the customer experience and strengthens brand connectivity. Increased customer trust helps in increasing customer loyalty and lifetime value. Most consumers, however, are unconcerned regarding high-end businesses exporting counterfeit items from their stores, and products without an RFID tag or QR code are likely to be deemed fake in the near future.
Because blockchain technology provides a secure and trusted tracking system from the start of the supply chain to the end. Blockchain anti-counterfeit solution supports the initiative against counterfeiting by identifying the provenance (i.e., proof-of-origin) of a product. When integrated with IoT, it can be the best possible anti-counterfeiting technology in this age. Thanks to Blockchain’s ability to identify provenance, Legal enforcement agencies can now establish the counterfeit nature of products.
Companies use smart tags to implement a blockchain solution- provenance identification, which identify a product’s place of manufacture, track its location, and assign other relevant information to it at each stage of the supply chain. QR Codes, RFID Tags, and Signatures on Metallic or Ceramic Surfaces are all examples of smart tags. When a user attaches a smart tag to a product, the smart tag sends data to the Blockchain for each new transaction, along with immutable time stamps. As a result, a supply chain partner can trace a product back through the supply chain to see where and when it was created at any point along the way.
We’re seeing the rise of blockchain-powered solutions that empower businesses with specialised tools to combat counterfeiting. To generate a digital footprint throughout the whole supply chain, they use distributed ledger technology. Platforms automate the movement of money and services across the supply chain, removing the chance of fraud. Counterfeiting solutions that use blockchain technology can be readily integrated with legacy systems. As a result, blockchain provides a cost-effective way to combat counterfeiting.
As consumer needs grow, counterfeiters will try to take advantage of the situation and expand their market share. The world urgently requires a cost-effective strategy to combat counterfeiting. Because blockchain’s acceptance rate appears to be on the rise, entrepreneurs have the potential to use technology to benefit the global economy. Furthermore, without replacing older systems, blockchain eliminates the problem of counterfeiting. The breadth of adopting blockchain continues to expand as organisations restructure their operations through digitalization.
Views expressed above are the author’s own.
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