After the pandemic hit, online and eCommerce fashion sales skyrocketed. Even though this seems like a good thing in hindsight, the amount of counterfeit good sales increased dramatically as well.
A Harvard Business Review in 2019 reported that "fake luxury goods accounted for 60-70% of the $4.5 trillion total global trade in counterfeit goods sold annually..." (Grammer, 2) Source
Because of this massive problem, there have been many luxury brands that have turned to use blockchain technology to help authenticate their products and combat counterfeit ones.
A way they can use this technology is by putting a QR code within their products or product tags that the individual owner can scan and receive information about the authenticity of the item. They can also receive information about previous ownership history (if it is a resold item). This would allow them to have verified ownership of the product as well as check the authenticity to make sure they don't receive a 'fake item.'
Even though this seems like a possible solution, it also has its downsides, as everything does.
Owning the digital receipts and certificate of ownership cannot be confused with having the rights of the physical product. The owners still might not be prohibited to resell or even engage in the commercial use of the product they own.
Blockchain technology is not perfect in any way, but it most definitely is a start- something to build upon to make progress within this industry.
Another issue with this industry is the topic of transparency and sustainability. When you purchase something online, it is unlikely that it has passed through some sort of inspection before it gets shipped to the customer. The item is unlikely to be inspected as well as the consumer not knowing what working conditions the product was made in. So, those who support sustainability and ethical practices, are unable to receive the transparency they would appreciate.
But even most of the time, brands don't have much control over what working conditions their products are made in or even how their materials are sourced. These jobs are typically done overseas.
So, because of these problems the industry is facing, blockchain technology is becoming more researched and tried.
With the use of blockchain technology, these fashion companies could be able to track where their materials are sourced as well as be informed about the manufacturing information.
And even better, all of this information could be stored in the QR code that is on each individual item. It would be accessible to the companies and consumers.
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