When Blockchain Meets Fashion: Use Cases and Insights

In the heart of the fashion capital of Italy, during the Milano Fashion Week, a unique gathering took place. The web3xfashion meetup was an intimate invited-only event that explained the potential influence of Blockchain technologies on the fashion industry. We had a four-hour-long discussion between experts from fashion industry, web3 developers and solution designers.

I must say that the conference had a very friendly atmosphere, where participants and speakers were eager to share and speak about their experiences. It reminded me how much I missed meetups, conferences, and Hackathons, and to the importance of face-to-face social interactions.

Here is my summary of the event, what I learned, and my takeaways.

“We don’t speak your language and terminology”
Mario Didonato, Prada Group

Communication barrier for future collaboration

The web3 and Blockchain have particular jargon, technical terminology, catchphrases, jokes, and slang. This is something that the industry people are not familiar with, and it keeps people away. Not only that, they also have terms like “Wallet”, which for us it means something else. When you talk with someone who works on Blockchain, in less than 5 minutes you are already lost…
To collaborate, the technical details should be easier to understand.

“There are 8 billion people on the planet. Only 100 million people have a ‘wallet’ or use the Blockchain (around 1% of the population). Only some %% of them actually use their wallet… We are still in the infancy phase of this technology.”
Ethan Pierse, NFT Factory

Web3 and Blockchain is small. Very small.

Although the first actual use of a bitcoin happened back in 2010 (someone bought a pizza with bitcoins), Pierse insisted that the big technological developments only happened in the past 2 years. This came as a surprise to me, since I heard the terms cryptocurrency and Blockchain around 2014 (from the team of BitMarket, an Israeli startup that built an ATM for bitcoins, where I assisted with the UX), and I believed that it has significantly more users.

Pierse emphasized that those who experiment now with the technology, even if they do not get profit the first time, will be able to reach the right product system before others.

On privacy and personalization

For a technology that puts “transparency” on its flag, I immediately think of privacy issues and GDPR. Not many people would want to publicly share their list of purchases or their assets. We need to allow a user to decide which information they share about themselves.

I learned that Blockchain could support this requirement, but it is not yet as easy as one would expect. There are two mechanisms with which a person can save his purchases (such as assets, NFTs, or coins) – a digital Wallet and a physical one (Ledger). I learned that a physical device is very secure, and even if stolen there are ways to protect the information it contains. Digital wallets can be public and searchable by other users, or private. However, we do not yet have a tool that offers user-friendly management on all these options. Big thanks to Ariel Wengroff (CMO of Ledger) and Fonz Olvera (CEO of TokenProof) for explaining this to me.

“Find problems that can be solved with Blockchain”
Gianluigi Zarantonello, Valentino

Startups should remember their role in this world

Companies want to make more revenue, and they do it by providing value and answering a pain, need or a wish. The relationship between good company and a customer – works. Theoretically, there is no need to change that.

No company would refuse an offer to make more money, while providing value to their customer and while maintaining the company guidelines. Therefore, if you found a guaranteed method to increase sales or increase efficiency – you have a winner.

“We know there is an opportunity in Blockchain. But we need a solution that we can implement that will add value to our customer, and thus, we can charge for it”
Jarvis Macchi, from EssilorLuxottica

Blockchain can be useful in both these directions. However, it is the responsibility of innovators to understand how their potential clients work, who are the customers of their clients, and create systems that revolutionize the existing status quo. The agility and freedom to explore is the advantage that startups have over companies. Remember that companies are already committed to the way they found to make money. There is a reason why building a startup is difficult, but that is our job 🙂

Regulation as a driver of adoption

Contrary to popular conception, regulation can be a powerful catalyst for adoption of new technologies. It signifies that a technology is both disruptive and safe for widespread use. Developers can operate within regulatory boundaries with confidence, ensuring the stability of their products. Melanie Bradaia from Arianee cited the wine industry’s embrace of Blockchain to meet waste management regulations by 2024 as an example of regulatory encouragement.

“We will always be a follower on adopting emerging tech, since we want to make sure it is profitable”
Jarvis Macchi, from EssilorLuxottica

Communication vs community

“Human beings have a responsibility to tell brands what we want them to make us. We vote by purchasing and thus dictating how brands respond”
Nizzar, Banana Corp

Although I recognize the power of the crowd to change reality, and although Blockchain is all about sharing, collaborating and respecting what customers want, the world of business works differently. A business needs to know how a certain activity will bring them more profit or income. If someone thinks that customer engagement can be translated into revenue – prove it. But, the end goal remains profit.

“If I had asked people what they wanted, they would have said faster horses”
Henry Ford about designing car

Second point, companies value feedback from customers, but brands need the power to dictate the market, and not the customer. Product design is not done by the public, but by a very small group of people. This is even more true for luxury brands or big groups like Luxottica, which have a huge influence on an entire industry. Check my article about Ferrari’s strategic analysis and its gamification principles to understand more about how decisions are made.

“Blockchain challenges us to convert our existing communication style into a type of community”
Mario Didonato, Prada Group

You can understand how deep is the organizational challenge, when realizing that communication is under the marketing department, while community management is under the aftersales department, and product development or Blockchain is obviously in R&D. This type of division makes it VERY difficult for a company to select a path.

Stakeholders should be involved, and get their hands dirty

Speakers unanimously agreed on the importance of stakeholder involvement for successful implementation. Resistance to change can be a hurdle, and active participation from all parties is crucial.

“Law offices should not block innovation, but to find the legal way to do it”
Lorenzo Litta, Brandit Ports

In order to learn about Blockchain, its challenges and potential dangers, Brandit lawyers got their hands dirty, and bought some coins, NFTs and even built a virtual office. By doing this, they understood the IP challenges, and now they are able to assist and consult others in the activity of implementing this tech into their workflow in a correct manner.

I have always supported hands-on approach to truly understand emergent technologies.

Use cases

I would like to share some use cases where I believe Blockchain provides a clear benefit compared with existing solutions. In my opinion, a win-win solution between companies and customers can be found.

Revolutionizing the supply chain

“While Metaverse or pure digital products do not have a clear value, the supply chain has”
Mario Didonato, Prada Group

Blockchain could assist in tracking assets, materials and status of assembly. These would bring more transparency to the management of supply chain. Although this is fabulous for the planet (since we can control waste management better), as well as for the end customer (since they could track the status of their order), 100% transparency is not so wanted from the company side. Companies will need to have control on which data is exposed to the customer and which is not. Tracking data can help the company becoming more efficient, but it should not be fully transparent with the public.

Most of the manufacturers cannot control their entire supply chain, since it is often filled with providers. You cannot force your providers to share their data, or tokenize their products.

Magnus Jones from EY has enlightened me in this direction, and they developed some interesting concepts for improving supply chain management.

History of sales and maintenance

A very clear example of where Blockchain can add value for both the company and their customers, is the idea of a “digital verified passport”, or a history of the previous owners of a certain item. Friends had a chapter where they fought who has the cooler suit: the one that Val Kilmer wore during the Batman movie, or the one from a James Bond movie. Blockchain can actually make this idea a reality, and adding such value will affect both the owner and the company.

Verify identity, claims, and assets

Blockchain could guarantee that a certain CV is legitimate, and that the person actually accomplished the university program he claims to have finished (Ethan Pierse, NFT Factory).

Gamified loyalty program

“Nike could reward a customer that walks with specific shoes in a specific street during a specific time, thus creating mass advertising by paying directly to the customer. Blockchain can enable such a program, while with other techs it would be significantly more difficult”.

At the end of the day, the methodology to generate engagement exists and is called Gamification. Blockchain can be a new enabler that companies utilize to deepen their control on what customers do with the products, and therefore they would be able to reward real life “quiet advertising” activities, such as the example above.

Creating usable services and lack of UX

Every person who tried to purchase a bitcoin or an NFT would realize that it is far from buying a product on Amazon (https://www.youtube.com/watch?V=zpolvugx5nk). Even opening a wallet is complicated.

“Blockchain should be implemented into existing workflows without requiring the end users to interact with it directly”
Magnus Jones, Ernst & Young

Link between digital and physical

A brand wants to sell more of its core products. Extending the business to a completely different space, is not something that all would want. If you are an artist – then creating digital NFTs can be your core business, but for physical products, it’s a different story.

The fact that Ledger has a physical wallet that knows exactly the person that holds it, is a powerful thing. Lamborghini for example, has an application that allows the owner to receive an alert when the car leaves a certain location. It is useful in case of theft by a person that has access to the car key (such as a valet service).

Imagine that the owner would be the only one who could start the car. Only their hand can do that. Such a powerful statement for an owner.

Closure

I would like to close with a big thanks to the people I talked with:

To the brave fashion leaders who gave a “fight” to this passionate community:

Big thanks to the hosts: Banana Corp, European Web3 Organization, and AKQA.

Special thanks to Armin Zadakbar for inviting me, but also for your work and for changing the world around you, rather than just living in it.