The luxury industry has undergone a series of dynamic changes in the past 20 years. Economic trends, digital transformation and evolved consumer habits are slowly creating a new competitive landscape where traditional strategies will not be enough to maintain healthy growth and profitability. The rising demand of luxury items in consumer markets, coming especially from the market segment of millennials, is pushing luxury brands to develop better products and revisit their dedication towards offering quality products sourced from experienced manufacturers. Today, consumers are increasingly skeptical and crave authenticity and honesty.
Trust is the biggest purchase decision maker for conscious millennial shoppers around the world, so its importance for luxury brands of today is paramount. But the question of how trust can be established in today’s world, where supply chains and manufacturing records are kept using pre-dated record keeping methods, like paper-logs and manual records, arises nevertheless.
The luxury industry needs innovation on the supply chain management side, where every key element can be traced back to its original source (e.g. the individual cotton thread sourced on the farm it was grown and the mill where it was created).
This white paper discusses the blockchain initiative Drawnblue, which will create a decentralised supply chain solution for the apparel/clothing and fashion industries. Drawnblue will disrupt global supply chains in the apparel/clothing and fashion industries by introducing traceability (i.e. where does this item come from?), transparency (i.e. is this item exactly what the selling brand claims to be?) and authenticity (i.e. is this item sourced from an authentic supplier?). Using blockchain technology, Drawnblue will create an auditable record for a product’s entire supply chain journey, which in turn can be independently verified by accessing the public ledger.
Counterfeiting and fake products are a huge problem for the apparel industry. Leaks within the supply chain create problems for brands, where inventory theft costs millions of dollars. To curb the sale of counterfeit goods, as well as the sale of stolen property on the black market, brands struggle to enforce proper policies and educate customers due to the lack of digital systems in which individual products can be verified from the source of origin onwards. Consumers, on the other hand, are unsure whether claims of the brand’s eco-friendliness are true, as the items purchased are merely labelled with information stating the place of origin
By using Drawnblue’s innovative supply chain technologies, the retail apparel and clothing industry will be disrupted. Brands can manage multiple supply chains sourced across several continents and will gain confidence in knowing the exact source of every element within the supply chain. Consumers can shop with trust and rely on digitized product labels to verify the source of the item. The fashion world is going through digital disruption and digitization, and brands need to innovate fast in order to hop on the bandwagon of transparency and decentralisation.
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