What is the future of blockchain technology in the fashion industry after Nike's encrypted shoes?

2020-01-04 15:20

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How the blockchain technology that Nike is beginning to test can also be used by the fashion industry
Source: HYPEBEAST

IMAGE : NIKE

Earlier this month, news broke that sportswear giant Nike was getting into the blockchain business. The United States Patent and Trademark Office (uspto) has granted Nike a Patent called "Cryptokicks", according to a report from The Next Web.

IMAGE:USPTO

Forbes listed blockchain technology as one of the luxury industry trends to focus on in 2018. So why did Nike, which focuses on shoes, apparel and sports products, start to get involved in the complex blockchain business? What changes can the block chain, which is said to be able to reconstruct the world, bring to the sneaker clothing industry represented by Nike and even the whole fashion industry? This time we will analyze this.

The application case of blockchain in fashion, art and footwear industry

1.Nike「Cryptokicks」

IMAGE : NIKE

The patent "Cryptokicks" filed by Nike is actually a system through which users can attach encrypted digital assets to physical products such as sneakers. Both Nike and users can use the system to track and verify product ownership using blockchain technology. When a user buys a pair of Nike sneakers, they will receive the only digital asset (erc-721) that comes with the shoes, namely both the shoes and tokens. The combination of the two is called CryptoKicks, which means encrypted sneakers. The system then generates a "CryptoKick ID," which records the shoe's material, collection, model and other information, and is stored in a cryptocurrency wallet-like APP called Digital Locker. As with sneakers, the digital assets associated with shoe money are also transferred to their buyers. Just transfer the digital pass, and the corresponding ownership information will also be transferred, and it is tamper-proof.

2. Aura, LVMH blockchain certification platform

IMAGE: ROBERT ALEXANDER/GTTY IMAGES

In May 2019, LVMH, a French luxury goods group, launched Aura, its first global blockchain certification platform. The platform allows consumers to trace their origins and other identity information for products from Louis Vuitton to Parfums Christian Dior. This information includes every link of the production of raw materials used in the product, including production and transportation, so that all these links are transparent to consumers. Meanwhile, this information is only disclosed to the consumers who buy the product, so as to realize confidentiality. The emergence of Aura aims to solve the problem of fake products in the luxury and fashion industry by tracking every "stage" of products from raw materials through technical means, and on this basis, customers can freely control their data and prevent data leakage.

MakersPlace, an online art trading platform

IMAGE : MAKERSPLACE

MakersPlace, whose main founders Dannie Chu and Yash Nelapati were previously Pinterest engineers, is also based on blockchain technology, encouraging artists to sell their work on the platform, which profits by taking a commission. MakersPlace generates an erc-20 token for each artist who sells work on the platform to trade their artwork. Artists can save the currency in their own digitally encrypted "wallets" or choose to use the wallets provided by MakersPlace. MakersPlace, meanwhile, generates a blockchain fingerprint for each piece of work by artists and creators, proving the identity and provenance of the work and making the fingerprint a symbol of limited artwork. The platform is so popular that MakersPlace completed a $2 million seed round in April.

4.1017 ALYX 9SM cooperates with Iota, the German blockchain foundation

IMAGE : ROY ZHANG/HYPEBEAST

In addition to Nike and LVMH and other powerful large fashion conglomerates began to focus on the block chain application. Some independent designer brands have also started to take the block chain technology as a breakthrough point to realize the personalization of their own brands and improve the experience of consumers. The brand 1017 ALYX 9SM, led by Matthew m. Williams, also teamed up this year with Iota, a German blockchain foundation, to try to create a transparent supply chain for brand consumers. 1017 ALYX 9SM plans to provide customers with a complete understanding of their supply chain through block chain technology. Customers will be able to scan the qr code to access and access all the data of the products they buy, from the first pin to the retail terminal. The design concept and production process created and delivered by 1017 ALYX 9SM brand every season will be open to consumers who buy products, which can alleviate the doubts brought by the brand products in all aspects.

How else can complex technologies be developed?

IMAGE: LOUIS VUITTON

The term "block chain", which has emerged in recent years, is a relatively macro technical term. Although it is related to finance and Internet industry, its complex theory and operation structure is still difficult to be quickly understood by the general population. How to represent this abstract concept in front of consumers and ordinary people to serve them has become one of the problems facing the fashion trend and the footwear industry. However, from the operation of industry giants like Nike and LVMH, we can preliminarily observe the application prospect of block chain technology in this industry.

1. Help consumers "monitor" the sustainability of the brand

IMAGE : JUERGEN TELLER FOR VIVIENNE WESTWOOD

In 2019 "green" and "sustainable" have become almost politically correct across the footwear industry. Not only are established European houses and designers starting to value sustainability as a selling point, but sportswear giants such as Nike and adidas are also using technology to create greener products. It can be seen that this "environmental protection" craze will not be quickly dissipated in the short term, and may become a long-term responsibility of major brands.

IMAGE : NIKE

From the perspective of consumers, they welcome the brand's responsibility for environmental protection and sustainable development. A survey by Mintel, the world's leading independent market research consultancy, found that 58 per cent of respondents in mainland China alone said they would be willing to pay more for ethical brands. The application of block chain technology can help a large number of brand consumers to feel or even see the brand's action in the field of environmental protection.

IMAGE : ADIDAS

Currently, the company is owned by the French luxury giant Kering group, European fashion e-commerce platform Zalando, the us fashion retail group PVH Corp, and the Dutch fast fashion retail group C&. The Organic Cotton Traceability Pilot project in which A number of fashion, luxury and retail giants are involved, including A, is A project that USES A variety of technologies, including block chain and DNA spray labeling, to trace the source of Organic Cotton. In the future, this technology may be used to track the raw materials of various footwear and clothing products. For example, adidas released futurecraft.loop 100% recycled running shoes this year. If the post-saving block chain technology allows consumers to fully track all the steps from the birth of their sneakers to the rebirth of their sneakers, then the 100% environmental protection concept that the brand hopes to convey can be more directly presented to users. In this way, consumers can clearly know whether the brand they buy has made efforts in environmental protection and sustainable development, and then choose whether to pay for it.

2. Provide help for brand rights protection and anti-counterfeiting

IMAGE:MICHEL SETBOUM/GETTY IMAGES

One of the problems plaguing the current street fashion and fashion industry is the self-harm caused by the prevalence of fakes. The Research Report "Global Brand Counterfeiting Report, 2018" released by market Research firm Research and Markets shows that as early as 2017, the Global counterfeit product market caused 1.2 trillion dollars of losses to brands, which is expected to reach 1.82 trillion dollars by 2020. Of that total, $323 billion was lost to fakes sold online. And the existence of fake goods can also be a problem for consumers. Block chain technology can also help solve this problem from a certain level.

IMAGE : CHESNOT/GETTY IMAGES

Still, take Nike "Cryptokicks" as an example. The only digital asset (erc-721 tokens) produced by Nike is actually the Token meaning "Token" frequently seen in the block chain field, which can also include points, property, certificates and so on. If further extended, it can also stand for honor mark, identity mark and right affirming tool, system asset quantification index, system pass and system protection, etc., that is to say, it can represent the interest or value of anything.

IMAGE : NIKE

By letting consumers get unique exclusive Token can verify the authenticity of a product from different angles and levels, and due to the complex algorithms and encryption technology in the field of block chain, to generic Token is almost impossible, and the imitation and fraud is completely different from the real world of physical imitation, cost has been far beyond the scope of counterfeiting industry can withstand. It can be said that as long as the brand official itself does not appear technical vulnerability, then through "give the product exclusive Token and give the user tracking method" anti-counterfeiting means is almost unbreakable.

3. Promote security for secondary market consumers

IMAGE : STOCKX

In 2018, the global secondary market for luxury goods has reached $25 billion annually, while in 2019, the global second-hand market (including resale of brand new sneakers that have not been worn) has reached $6 billion. It can be seen that consumers in the secondary market are also a group that cannot be ignored. Compared with the primary market, how to improve the safety of consumers in the secondary market is also a problem facing the market and the brand.

PHOTO: JEFF KOWALSKY/AFP/GETTY IMAGES

The characteristics of block chain technology are also suitable for solving some problems in the secondary market. The core of blockchain technology is to record data and contracts along the timeline, and can only be read and written, not modified and deleted, which eliminates the possibility of network fraud. If brands can cooperate with shoe resale platforms like StockX by using block chain technology, the establishment of traceability certification system for shoes consigned by customers can completely solve the trust problem of the whole circulation link in the secondary market.

At present, most of the mature application cases of blockchain technology still exist in the financial industry. Although this technology concept has no limitations at the beginning of its birth, it obviously needs some time before it can be widely used in People's Daily life. However, brands and capital parties represented by Nike begin to try to test the waters in this field, which is enough to prove that the future changes brought by blockchain to fashion trends and the footwear industry are worth waiting for.

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