Can blockchain and NFC chips put an end to counterfeiting and idea theft in the fashion industry?

The fashion industry is facing a double threat: a rise in counterfeiting that eats into their profits and a fast-fashion culture that copies designs with impunity. But blockchain offers a glimmer of hope. Or rather, a concrete answer.

Blockchain: Tracking a fashion item’s entire journey

A blockchain is essentially “a large, public, distributed ledger that records transactions chronologically and in a tamper-proof way.” It is therefore ideally suited for the fashion industry’s complex supply chain, where a garment can travel across borders from raw materials to retail stores.

Nicklas Nilsson, thematic intelligence consultant at GlobalData, sees huge potential in blockchain, especially when combined with the Internet of Things (IoT). Thanks to blockchain, every step in a product’s life – from sourcing cotton to the final sale – can be recorded and verified. This allows consumers to gain “deeper insights” into their purchases, including provenance and ownership history, reports Just Style.

Brand protection beyond anti-counterfeiting

Digital transparency company Everledger highlights the urgency of the situation. Citing a recent report, it estimates that counterfeiting costs the industry almost 100 billion US dollars annually. And this is where blockchain can be a game-changer, ensuring brand authenticity based on know-how, origin, and quality.

But the benefits go beyond simply fighting counterfeits. Blockchain can also deter fast-fashion copycats. By providing a transparent record of a design’s creation, ownership, and production, it becomes harder to steal ideas and produce cheap imitations.

And this is exactly what NFC chips, or “Near Field Communication,” do. Comparable to tiny hard drives that are 2.5 millimeters thick, the chips can store small amounts of data, such as URLs or identifiers. This data can then be transferred to another NFC-enabled device, such as a mobile phone.

Balenciaga explores Web3 with a musical touch

Known for its rather low-key approach to NFTs and the metaverse, Balenciaga has nevertheless made a U-turn and embraced emerging technologies in a unique way, by connecting its products to music. In partnership with Eon, Balenciaga Music, a division of the famous fashion house, allows its latest clothing collection to unlock an exclusive playlist by trip-hop group Archive. The NFC-enabled T-shirts and hoodies give fashion enthusiasts access to a dedicated soundtrack, marking a new step for the brand in the digital universe, reports Metavers Tribune.

It is the first time that Balenciaga has taken such a digital approach, notes Metavers Tribune, and it illustrates a growing trend in the fashion industry. In July, Puma integrated its sneakers with an exclusive mixtape portal via NFC, while Diesel launched a series of NFTs with Public Pressure in September, offering their owners an immersive sonic experience. For Balenciaga, this project strengthens the brand’s connection to music and opens up new avenues of customer engagement.

But behind this marketing and brand image aspect, there is also an anti-counterfeiting angle. Indeed, each NFC chip contains a unique identifier linked to the product, allowing its authenticity to be verified throughout the supply chain, from manufacturing to the sale to the end consumer.

Tod's joins the Aura Blockchain Consortium

Tod’s, the famous Italian luxury shoe brand, also made headlines when it joined the Aura Blockchain Consortium, integrating the consortium’s Digital Product Passport into its collections, starting with the Custom Di Bag. Accessible via an NFC chip embedded in the bag, this digital passport provides owners with proof of ownership, information on the product’s lifecycle, and sustainability certifications. Additionally, owners can claim a blockchain-based digital twin of their bag to prove their ownership.

“The growing number of members joining the Aura Blockchain Consortium reflects the changing attitude of the luxury industry towards emerging technologies and blockchain,” states the Metavers Tribune article.

Transparency is becoming increasingly important for premium retailers, and digital passports make it easier for consumers to access key information, strengthening trust and brand loyalty.

Lacoste celebrates its 90th anniversary in the virtual world

Lacoste is also celebrating its 90th anniversary with a reinforced digital presence. The brand has opened a new immersive area in the blockchain-based video game The Sandbox, where fans can explore and celebrate Lacoste’s legendary sporting heritage.

By leveraging the possibilities of virtual experiences, Lacoste is strengthening its connection with a tech-savvy audience while celebrating a major milestone. This initiative highlights the growing importance of digital spaces in luxury brands’ marketing strategies, offering unique opportunities to engage and retain consumers.

These developments show how the luxury industry is increasingly using Web3 technologies to enhance the customer experience and boost the value of their products in innovative and authentic ways.

This article originally appeared on FashionUnited.FR. Translation via AI and edit by Rachel Douglass.