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Why Blockchain Could Revolutionize the Apparel Industry and How it Will Happen

Right now, blockchain seems to most people the way The Jetsons did in 1985—and fewer still can likely wrap their heads around what blockchain will mean for the apparel industry.

But put simply, blockchain could revolutionize what brands and retailers understand about their product well after the consumer takes it home.

Blockchain is a digital ledger that essentially acts as a universal computer to facilitate secure online transactions, and it becomes a communication tool for connected parties because it’s able to link individual computers into what really serves as one big computer, so to speak.

“This is the most robust networking technology that humans have ever come up with,” Chris Dannen, founder and partner of Iterative Capital Management, said speaking at the blockchain focused Synthesis 2017 in New York City Thursday.

Adding to that, Dr. Solomon Lederer, blockchain lead at textile innovation startup Loomia, said, “Now that we have this universal computer, this central platform that everyone can access and everyone can use, that has implications for supply chains.”

What blockchain can do for supply chains is get all links in the chain—from retailers to shippers to manufacturers, textile mills and fiber providers—onto one platform where each would be able to see what the other is doing, and when. What’s different about that than some of the supply chain management technologies out there now, is that the data isn’t controlled by one provider but rather, decentralized and shared.

To actually make it work for supply chains, however, would mean a fairly major task on the front end. A company working to implement blockchain in a tuna supply chain in Thailand was going out to fishermen, equipping them with mobile technology and tagging each fish they caught with an RFID tag in order to make everything traceable.

“You would actually have to go to all the vendors in your supply chain and say ‘hey we have this solution and this benefits all of us, so let’s get on board with it,’” Lederer said. “It’s a lot easier sell than saying, ‘hey, use our system.’”

But what can it do for apparel?

The future for apparel lies largely in making it smarter, whether that means simply upping performance capabilities or actually using technology to make that garment do things like deliver data.

What’s keeping apparel from advancing in the wearable tech department, however, is that most of what’s out there is rigid, design limiting and bulky, Loomia CEO Janett Liriano explained.

And that’s where Loomia comes in.

The company is creating textile circuitry that can heat garments, light them and help collect data from them using sensing technologies in its Loomia Tile—all while remaining flexible, washable, dryable and discreet.

“This is really, in our minds, going to unlock a fair amount of these challenges when you bring the apparel industry into the 21st or 22nd century,” Liriano said.

Where blockchain comes in, is by using some of the data tomorrow’s textiles will provide and delivering it back to the brand, which could then make better-informed decisions about the product they’re putting out there.

“After the point of sale, most brands have no idea what’s going on with their products. You spend billions of dollars creating inventory and there’s no dynamic feedback mechanism. You sell it, you kind of hope someone fills out your survey, you mine social media hoping to see what’s trending, and then you crank out a ton of product the next year and kind of guess and see what sells,” Liriano said. “It’s pretty inefficient, it’s deeply wasteful and it leads to $100 billion lost year over year, and in an industry that’s worth $325 billion. So, if you do the math, it’s roughly a third, and that’s a lose because of a lack of data.”

Data will start to come from the kinds of prototypes Loomia already has in the works, like a boot that can warm the wearer’s feet when the temperature outside gets too cold, and garments with lights for construction workers and joggers to don at night so they’re not dependent on reflection from a car in order to be seen and safe. If a textile sensitive to touch were in the lining of a car’s passenger seat, say, data gleaned from it might be able to reveal where the impact from a car accident was and even from what angle it came. These types of textile technologies will start to inform the data brands will base their business decisions on.

A brand may sell a leather jacket and never know what environment the consumer wears it in or how often it’s worn, yet they’ll ship 10,000 more units and potentially end up with excess inventory. With Loomia’s Tile technology, which works in conjunction with its electronic layer to collect data, that brand could reasonably know what temperature it is outside when the wearer puts the jacket it on and whether it’s a once a week wear or something more infrequent.

“Let’s say this winter jacket you were hoping would be worn below 40 degrees is never worn below 60 degrees. That can create some pretty interesting feedback in terms of making the lining warmer,” Liriano said.

Blockchain offers a decentralized way for the consumer to share that data back to the brands they bought from.

But that begs the question: will consumers actually want to opt in?

If you ask Liriano, the answer is an easy yes.

“The tag is not tracking where you’re going,” she said, adding that allowing the Tile to collect your data will be an opt-in option consumers could simply opt to remain out of. However, she said, “Most consumers will be incentivized to say ‘hey, I wore a leather jacket today.’”

Blockchain will allow consumers to be in control of their own data, which brands want to benefit from.

“The Tile incentivizes the user to share this information, which they can then give back to the brand, which creates brand loyalty and kind of closes the loop,” Liriano said. That incentive could eventually come in the form of profit for those wearers willing to share their data. “It creates this really exciting win-win marketplace for the brand and the user.”

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