BLOCKCHAIN TECHNOLOGY — Applications in Fashion Industry, Part 2

In-Store Experience, Post-Purchase Experience and Circularity

In the first article of this series, Application of Blockchain Technology in Fashion Industry, I wrote about the effects of blockchain on the pre-consumer aspects of a fashion product lifecycle. I covered the way supply chain can become transparent using blockchain products tracking on every stage of production. Blockchain can also facilitate the product authentication process as a unique product ID is assigned to each SKU. Finally, blockchain solutions can assist in inventory tracking, warehousing, and distribution. The fact that this technologically advanced, decentralized and secure data storage system brings a lot of benefits to the pre-consumer sector of fashion industry and makes it easier and more efficient to track and authenticate products in the supply chain is pretty clear. But how can blockchain technology benefit the retail and consumer experience and, even more importantly, contribute to the circularity of fashion industry? This is what I am going to uncover in this article. If you missed the first part, you can check it our here.

To refresh our memory, here is my definition of blockchain technology: blockchain is essentially a ledger that distributes data storage across multiple points and makes sure that each transaction or entry is being locked and secure. This makes it virtually impossible to hack or modify anything in that digital data ledger without everything in the system being affected by that change. This provides total transparency and automatic fraud protection.

Why is it important to think about the way consumer experience can be affected by such innovative technology as blockchain? Because the fashion industry will have to start shifting dramatically from the environmental catastrophe it got itself into over the past decades — as itproved to be the second polluting industry in the world! The overproduction, overconsumption, excess textile waste, disastrous environmental and social effects of production using harmful chemicals, abnormal amounts of water and many more negative outcomes of the current state of the industry will have to change. And the change is starting within. The customers are no longer willing to keep playing by the rules the industry has set for us. They are waking up to the fact that they do not need so many poor quality garments, they become overwhelmed with their overfilled with cheap clothing wardrobes resulting in a “there’s nothing to wear” problem. They start buying less, buying smart. And when the consumer shifts their values, the industry will have to follow. Blockchain technology can undoubtedly facilitate this shift and help bring meaning to a process of purchasing a garment, wearing it and when the time comes, disposing of it for recycling.

In-Store Experience

We all have heard in the news that retail is dying, but I believe that it is just transforming into a more meaningful, joyful and creative experience. Shopping will be easy, fun and exciting again! Imagine going to the store where every garment can tell you a story. Where as you are trying on an item, you’ll will be promoted to view a video about the people who were involved in making that garment, it will show you where the threads are coming from, where that garment was made, and how it got to this store and why it will be a valuable purchase for you. All the aspects of supply chain transparency and authentication which I touched upon in my first article of this series will be reflected in this story. In addition, a customer will be able to learn how the product can be disposed of when they no longer need it — an instruction how to ethically recycle that product will be included in the stored data. The video may be accessible via mobile device or can be viewed via the digital mirror in the changing room.

Mirow Smart Mirror

It is not such a far-fetched future vision — there are plenty of smart mirror technologies already out there: Mirow, OAK Labs, SenseMi, AdvanMirror. These smart mirrors can show you what other sizes of that product are currently available and provide you with stylists’ suggestions of which other items you can wear this product with. These technologies generally work with RFID tags, so they would be able to incorporate another layer of data that contains the journey of the garment securely stored on Blockchain.

To me, the in-store experience can mean both brick-and-mortar and e-commerce store experience. And I don’t have to say a lot about the way the story of the garment can be presented on the brand’s website, whether directly on the product page or on a separate, transparency section of the website. Many sustainable brands are already attempting to share about where and how their products are produced and this practice will spread with blockchain’s ability to track multiple steps of production of multiple types of garments. I am not giving any examples because personally, I don’t fully trust self-proclaimed sustainable brands unless they use such secure and transparent technology as blockchain to collect and openly present their manufacturers’ data. Anyone can put up photos of clean factory and happy-looking garment workers with recognizable white earbuds in their ears, but what if we are being deceived? I believe that the future of fashion (as well as all other industries and relationships between companies and people) is going to be full transparency, nothing less than that. It is about coming back to oneness, not contributing to separation. Only then sustainability and ethical and well-paid conditions will become a norm, not an add-on factor for any brand.

By their essential human rights, customers deserve to know where, how and who made their garments. Fashion Revolution created a whole campaign where customers demand brands to be transparent about the conditions the products were made in by using hashtag #whomademyclothes on social media. Blockchain technology can bring this information in front of the customers before the purchase is made, so that they can make a more educated and conscious decision on whether they are willing to invest in this garment or not, based on its source, its recyclability, etc. In the future, I believe by investing in more ethical and durable products, customers will be able to gain points or cash back to invest into the next ethical product or gift it to others.

The ways blockchain technology can be applied in retail experience are truly endless, however not much has been applied in practice yet, besides the pilot-project by fashion brand Martine Jarlgaard in collaboration with technology company Provenance, where smart tags had a QR code which customers could scan using their phones and access supply chain information. For now, none of the fashion companies had attempted to incorporate blockchain into retail experience at scale, but I am confident we will see this develop in the near future.

Post-Purchase Experience

What happens when the product is purchased? How can blockchain benefit both the wearer and the company that produced this garment? I will repeat three powerful words, directly connected to the nature of blockchain technology: secure data sharing.

Let’s start with the purchase process. When a customer has made a decision to buy a product with a smart tag, that transaction is stored in the blockchain ledger and the name, payment and demographic information of the buyer is securely encoded and attached to this product journey. This way, blockchain can prevent it to be resold by an unauthorized entity. I have to note that this can happen both via online and offline purchase — just remember how much of your personal information you are usually forced to give up when you shop online using your credit card. How securely is it stored? No one really knows. How is this information used? Don’t even get me started on that… As a technologist and a fashion tech consultant, I know way too well. But to summarize: to make us buy MORE STUFF. At least, in my positive future vision, this “stuff” will be ethically made, sustainable and designed to be reused, repurposed and recycled, and the customer will be more conscious about their buying decisions.

Now, when the sale is closed, the truly valuable data tracking can begin. To make this section of the article more in-depth and grounded in reality, I interviewed Janett Liriano, a CEO of LOOMIA — a wearable tech company that creates circuitry that can heat, light, sense and track data. I asked Janett about the way her company applies blockchain for secure user data tracking and you can read the full interview below. LOOMIA is one of the very few fashion tech companies out there that is integrating blockchain into their model from the ground up, by creating “the LOOMIA TILE, a digital tag that transforms garments into data-collecting devices. The TILE tag is is a secure way to store and transfer data from the tag to the cloud, using a mobile phone. Users have full control over what data is shared with brands in exchange for rewards.”

I admire their innovative vision of the future when garments can be smart and collect data that customers are fully in control of, and able to monetize it or use for rewards. Just imagine, you will have a choice to wear a jacket which lets you make money by simply wearing it or wear a regular jacket that just serves a utilitarian and self-expression purpose. Which one will you choose? Talking about passive income! Data collected by the monitor that operates on blockchain can range from simply frequency of use and location data to environmental surroundings of the wearer, proximity of other garments that have that technology in the wearer’s closet, and even health and activity data of a wearer.

I acknowledge that this vision of the future may appeal to some, and may not to others, and that’s OK. If by using the secure and anonymous data collected from the trackers embedded in garments, the brands can create a more functional, sustainable and lasting product — I am all for it. But if brands use it to mindlessly sell us more stuff, I would opt out from purchasing that jacket and contributing to the waste and environmental consequences that wearing this jacket may bring. In any case, LOOMIA has created a powerful and potentially industry-shifting technology and it will be in the discretion of their client companies to use this technological advancement mindfully and with an intention to bring a positive change to the world and be open and honest with their customers as a return.

Let’s dive deep into the interview to find out more about the applications for blockchain by the fashion tech company, LOOMIA. Interview with Janett Liriano, CEO of LOOMIA I took on June 22, 2018.

LOOMIA TILE Homepage

NM: Why did LOOMIA decide to use blockchain technology and how exactly it is applied?

JL: Why blockchain? As a tech company focused on engineering innovative technology we think it’s important to advance the use case for our products by making garments more responsive and facilitating that data exchange over a secure and transparent platform which blockchain technologies can facilitate.

Blockchain is an important part of any industry that handles transactions and information. Personal data is a precious commodity. The transparency and security provided by well-designed blockchain applications ensures the security and authenticity that both brands and users need. LOOMIA does not want to be the middleman between brand and consumer; blockchain is the platform that allows for seamless and secure peer-to-peer transaction. We are all becoming very aware of the risk of any one group holding large amounts of data and being the sole benefactor. Leveraging the blockchain allows us to ensure security and data integrity, while allowing the data producer to benefit through tokenized incentives. There are also substantial opportunities for supply chain and product tracking, as well as anti-counterfeiting.

NM: What kind of data is collected from the point customer purchased the product with LOOMIA technology incorporated?

JL: Our textile circuits have the ability to collect data on garment performance, frequency of use, user habits, and environmental conditions such as motion, speed, and temperature. Users can opt in to attach location data once they scan the tag to transfer data to the mobile app.

NM: What does Loomia recommend brands to do to incentivize customers share their data?

JL: The TILE platform creates a direct exchange between the brand and consumer: data (product and user insights) for the brand, and TILE tokens for the user. The TILE tokens will open an exciting system of decentralized rewards, but in order for customers to willingly share their data, the reward must be sufficiently compelling!

LOOMIA TILE

Brands should know that if the token isn’t useful or valued as much in terms of goods received, users will be disinclined to share their data. On the other side, the user will set a minimum TILE price for what they’d sell their data for in tokens. If they price their data too high, they won’t have many matching buyers. It will be an iterative process, of course, but over time the price should work itself out.

It makes sense for there to be a baseline of TILE rewards as a starting point. LOOMIA is not in the business of determining those rewards for brands, but it’s an exciting opportunity for brands to think of their own incentives- whether it be in the form of discounted products, services, and/or exclusive experiences.

NM: What is in your opinion the most impactful application of this kind of data?

JL: We are driven by the idea of a true marketplace for meaningful product data and transparency that rewards data producers. Many neat applications are possible outside wearables, such as in the automotive, industrial or military spaces! We are particularly excited about the possible applications within the medical field — imagine a world where well-responsive textiles for those in need of clinical assistance can improve care!

CEO Janett Liriano and Founder & Technical Lead Madison Maxey

NM: How do you see a retail experience change with blockchain technology incorporated in every garment?

JL: Our goal is for seamless integration into goods, so there is little to no experienced change for the user. Having a TILE tag in your garment shouldn’t change the level of comfort. The main difference is after the fact; at the end of the day, a user can scan his/her phone to offload the data and visualize their own habits! since the TILE tag is sewn in. We see a gamification of wearing the items you love- a satisfying ping accompanying the scan of your data at the end of the day as your tile tokens accumulate- and the joy in using them for brand driven rewards

NM: What do you believe the industry needs to do to apply blockchain technology in the upcoming years?

JL: At LOOMIA, we are committed to using blockchain to bridge the physical and digital worlds. In order for the technology to scale, it needs to enter our lives in a real way. Companies and brands with an ability to apply the technology in ways that exist ‘off the chain’ — in our physical world — will have the greatest ability to demonstrate blockchain’s value. Concrete actions would be investing as a group in pre competitive spaces to get their supplier on chain, allocating budget for training and testing and rolling small pilots of completely on chain processes.

Circularity

Finally, we got to my personal favorite topic, circularity. “Design with the end in mind” has been a buzz phrase for sustainable fashion junkies like myself and our Balanced Fashion community. What does it mean? Several aspects. First of all, when a brand comes up with a new product to produce, it should be not a disposable, fad-driven design, but more of a timeless, practical garment that can be worn for years, instead of several days or a couple of weeks. Slow fashion is another buzzword we use to inspire customers to use style, rather than trends as a driving force in making a purchase decision. The legend designer Coco Chanel said, “Mode passes; style remains”. Fashion trends and fads only contribute to what our industry got ourselves into over the past years. And in my vision of the conscious future of fashion industry fashion trends will lose its glamour and the customers will be purchasing products that reflect their personal style, rather than copycat each other’s way of self-expression. Perhaps, the data collected from a wearer of a garment with LOOMIA’s TILE element will be able to pass on information back to the designer on how to better design the garment so that it can be even more durable and sustainable than its previous version.

Australian Fashion Council

Another important aspect of circular (or closed-loop) design is using sustainable materials that are recyclable or biodegradable. This brings in an opportunity to apply the benefits of blockchain technology: with information stored on a smart label about the materials that product is made of, the garment will be able to “advice” on how and where to recycle the product to benefit the environment. When the product is taken down into its essential materials, these materials can be recycled into the creation of a new product or used in other applications. This way the product that is disposed is not contributing to the tremendous amounts of waste the industry generates.

One more important aspect of circularity is the incentives for the customer to “return” the products back to the brand when they no longer need it and receive cash back, coupons and other incentives for recycling. That way, both parties will benefit: brands can utilize these used garments to create new, recycled products and customers can shop new products guilty-free and at a discount, granted for their loyalty. With the brand’s information stored on blockchain, a customer can easily identify where they can return the used garment, exchange it for their reward AND track where the garment will be going after they return it to confirm that it’s not being burned or dumped. Even though big brands are already practicing the “take back for rewards” program, yet rumors are that these used garments do not actually go back into the supply chain — but being disposed in the most unethical ways possible. Blockchain can bring a full transparency to the post-consumer journey of a product.

circular.fashion

The final aspect of circularity is an opportunity for customers to effortlessly re-sell their products for cash or credit. Blockchain technology can integrate with consignment goods marketplaces to facilitate this process so that the ownership of the garment can be legally passed on to another customer, this way prolonging the lifestyle of the garment for more years ahead.
None of the brands or technologies that I am aware of are incorporating blockchain into their circular fashion system at this time, yet, this is a huge opportunity for the future of our industry. Berlin-based fashion tech start up Circular.Fashion is a pioneer in digitalizing circular design by creating a circularfashion.ID label for brands to incorporate in order to extend the lifestyle of the garment beyond a single customer’s use. Since circularity is such a huge and important topic on its own, I’m going to write an article that just focuses on this essential aspect of the conscious fashion industry’s future.

As you can see from this overview, blockchain can not only be used for transparency, authentication and inventory tracking but also it can be applied in the purchase and post-purchase experience, as well as contribute to the circular fashion system. The sky is the limit in terms of the applications of this secure and transparent data storage system based on the advanced technology that is shifting many industries. I’m curious to find out more ways this technology will be popping up in different parts of the fashion industry and, hopefully, in the future, we will create a universal circular tracking system where product data from any brands are normalized and accessible to anyone, without sacrificing sensitive customer information. I believe the meaningful change starts with an idea of the perfect outcome and a trust that it is achievable as a driving force to its manifestation.

Do you think a totally transparent industry is possible in our future? Do you believe blockchain can contribute to a significant change in fashion industry? Leave comments or drop me a note to share your thoughts to nataliya@balancedfashion.com. I’m curious to hear your feedback!

Directing & Narrating Balanced Fashion towards Balanced Culture