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Blockchain Startups at CES Attack Opposite Ends of the Fashion Supply Chain

The fever-pitch hype around blockchain might have cooled off a bit as 2018 drew to a close, but don’t tell that to two Dutch startups betting that distributed ledger technology could be the answer to some of the thorniest challenges plaguing the fashion supply chain.

In the apparel sector in particular, proponents believe blockchain, a tamper-proof electronic database linking nodes of information secured by cryptography, fosters trust between parties. Detractors, on the other hand, say that blockchain is little more than a buzzword that delivers few, if any, benefits.

Circular economy advocates have a new ally in Circularise, the budding Dutch blockchain startup working with textile certification groups to help brands and retailers prove via results published on a public blockchain that their materials were sourced responsibly. Tracking resources this way streamlines the process of recycling and recouping raw materials and promotes circularity, according to growth manager Igor Konstantinov.

Are those Nikes or nah? If Seal has its way, no one will ever have to question whether their swoosh-splashed sneakers were knocked off from the legitimate originals. Where Circularise focuses its efforts on the raw materials stage of the apparel value chain, Seal thinks there’s an opportunity for blockchain to give consumers the peace of mind that their newly purchased products are the real deal.

The Dutch business is not alone in looking to blockchain to counter counterfeiting, a $98 billion problem in fashion and textiles alone as of 2017. Last year, sock brand DeFeet unveiled a blockchain application that lets consumers prove the legitimacy of their legwear. Secoo, the Chinese luxury e-commerce platform, said in July that it was building its own blockchain to authenticate the merchandise it offers for sale.

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Seal creates a digital twin of real-world, NFC-tagged products, storing the digital twin on a blockchain where consumers can check to confirm their purchases are legit. The platform is based on an app for now, but CEO Bart Verschoor, who co-founded Seal with his brother Joris, told Sourcing Journal at CES that the long-term plan is to phase out the app and instead integrate an API into each brand partner’s e-commerce website. The startup is a passion project for the pair, whose artist mother saw her own work ripped off.

Verschoor sees Seal as “an evolution of the copyright symbol” and the most modern way to try and remedy the steady erosion of trust, which he described as “the currency of brands.”

Authentication might be the foundation of Seal’s value proposition but that’s just the beginning. With the digital link in place via blockchain, brands could deliver interactive new post-sale experiences—a step toward strengthening brand loyalty in a world where such affinity is waning.

On the logistics side, Verschoor envisions a scenario in which one day Seal, if deployed widely enough, could potentially “greenlight” trusted products and shipments through customs, reducing the burden of processing and inspecting authenticated, NFC-tagged cargo. Like Circularise, Seal’s technology could help keep raw materials within a circular economy. Much as consumers in some parts of the world pay a deposit on bottles that they recoup when they recycle those vessels, so purchasers of Seal-tagged products could pay a little more upfront to regain part of their investment at their end of its usefulness to them, Verschoor explained.

Last year the 10-person startup Seal won a European Commission award for co-developing infrastructure to combat counterfeiting within the European Union and was selected as an innovator with, the public-private coalition established in 2008 by Nike, USAID, NASA and the U.S. State Department centered on driving sustainability and justice through innovation. Verschoor said the forum affords access to the major retail players like Walmart, which could open doors to funding or pilot projects. Seal also has been in touch with Fashion for Good, the Amsterdam-based group focused on scaling transformative ideas.