How can new technologies increase transparency in fashion?
Is it actually as transparent as if all the producers from the global supply chain where gathered around one table? Can Blockchain bring the open-mindedness of tech into fashion? You will find the answer to that and many more inspiring questions in my conversation with Neliana Fuenmayor, founder of A Transparent Company consultancy that offers innovative business solutions to fashion companies who care about transparent and ethical ways of making things.
How did you move from being a designer to becoming a fashion entrepreneur linking technology to fashion, transparency and ethical production?
N.F.: The story started in 2012 when I was really frustrated that people in my industry where not sharing anything. I was very inspired by Honest By, quite a disruptive brand at the time. In the meanwhile, I met Jessi Baker, who was starting Provenance and we realised that we both shared a vision for the brands and producers to open up. Since then we’re friends and collaborators. In tech people are so much more open, there is real open source thinking and this is the opposite to fashion. I believe fashion has to learn from other industries how to be more open-minded to accelerate positive impact. Now collaborating with Provenance my aim is to bring innovation through Blockchain technology to increase transparency in fashion.
What is the meaning and practical use of Blockchain technology in fashion context?
N.F.: Blockchain for fashion essentially aims to bring detailed information from current supply chains into a digital passport, that can be linked to e.g. a garment and allow customers to access the information. What is really different, however, is that Blockchain enables accountability, sort of like an auditor, because all information provided once cannot be changed, and it doesn’t really need a middleman. Which doesn’t mean that you cannot add wrong data, or a lie, which you could, but Blockchain makes that lie to surface sooner rather than later and all the actors from the supply chain will be notified. The way I often explain it to brands who want to understand the implementation and the benefits of Blockchain, is that it resembles customer reviews today, that can make or break brand trust and loyalty.
"I believe fashion has to learn from other industries how to be more open-minded to accelerate positive impact. Now collaborating with Provenance my aim is to bring innovation through Blockchain technology to increase transparency in fashion."
So what is the first step for a brand who wants to start?
N.F.: It is very accessible, believe it or not. As a brand or designer you start with building your business profile via Provenance Dapp (Decentralised application). Whether you have a supply chain or you’re building it from scratch, as a designer or label you will have to invite the suppliers to submit information through the platform and this is how you give voice to every actor participating in developing your collection in the case of fashion. In our PoC (Proof of Concept) on a UK alpaca supply chain working together with Danish designer Martine Jarlgaard, we connected the data backed by blockchain directly with the story that became part of brands omnichannel strategy. Information you get from Blockchain is in the form of time stamps of so called assets transfers. These are certain steps like: fleece becoming a yarn, yarn becoming a knitted garment and they have date, time and location added on automatically. It is like a Tweet time and date and you can’t edit it once if online, like a whatsapp group of suppliers but public, or like tagging people on your instagram picture. This is how these people are connected by the story and by the product, but there is a layer of security powered by Provenance, which is a marque of trust and transparency backed by Blockchain technology. That’s the difference between what we offer and what brands are communicating right now which bears a risk of greenwashing.
Is blockchain technology greenwashproof?
N.F.: I would say it can futureproof claims of sustainability and ethical practices. One of the issues that I see that the fashion industry has, is that it doesn’t feel confident enough with the information given by suppliers to make it publicly available or there are blockers like competitiveness. So there is a lot of resistance to disclose suppliers. So what are you left with? You are left with a story that potentially could be just in essence not true. What I am telling brands is that they are all sharing the same issues and you can collectively find the solution only if they dare to open up. It sounds very idealistic, but honestly I see this happening in other industries, for example: certifiers, sustainable standards, producers. One of the things that is triggering that change in fashion is Modern Slavery Act in UK. It makes people realise that even if you are a big company, you need a coalition to get the full reliable information from the factory, just because fashion supply chains are super complex and factories have their ways. So you can gain information but is it true or not? And here comes Blockchain that gives you an unique ID number to each item track down the chain and also helps with mass balance check to assure you what raw materials are being blended from different origins.
How would you make that possible?
N.F.: For example, I lead a project for Provenance with an NGO working with farmers in Indonesia for proof of fair trade, so adding a layer of financial transparency, which was pretty exciting. The farmers are using simple SMS messages informing us how many coconuts they harvest and if they got paid the right amount calculated on a UN formula for premium living wage. All this data gets logged on the blockchain, is a grassroots approach. We really want certifying companies to step up into digital world, because for now it looks like just buying a different logo printed on the product package. Blockchain allows you to get more information than audits that happen just once or few times a year.
Showcasing the origin of a product has definitely a huge storytelling potential for brands identity, yet it means you have to really enquire your supply chain. How do you persuade brands to follow this path as a consultant?
N.F.: It is all about collaboration. Blockchain can connect all the data points into a shared layer that Jessi Baker founder of Provenance rightly calls a ‚universal source of truth’. It is an opportunity for everyone to say if something is not correct. It is the future reputation and risk management for brands. It’s like sitting people around the table representing a supply chain. If you ask them what’s the color of the t-shirt each of them are wearing and someone with a great reputation or a high position would say it was white when everybody can see it was black, it gives the encouragement for the participants to highlight the “bad data”. Blockchain as a decentralised ledger reveals the information to everyone at once, it cannot be duplicated and there is no third party involved. There are more details but in a nutshell blockchain is immutable.
Do you offer to brands an app or other anonymous and accessible emergency tool for workers to report on working conditions?
N.F.: I do not offer that, but we are are in touch with organisations and NGOs that can plug their systems to blockchain for instance. There is a huge potential for collaboration, I believe that if we connect everyone who is working towards the same goal, we can find solutions sooner rather than later.
Which brands in your opinion will buy into this technology? Is there a way for a more price-sensitive consumer to access it?
N.F.: There are 2 things there. First are the brands who are doing great work gathering data from suppliers and have tools in place, but are struggling to communicate this on a customer friendly way. There is a lot of quality information available, but I think the next step is that you need to take it out there in a way that is non intrusive, visually friendly with great user experience, interactive and gives great customer experience.
Second is: how do you make consumers trust this information? We sometimes trust just because we want to buy and experience the ‚feel good’ effect of buying organic certified product. But how do we know that something backed up with a new technology like Blockchain is better than the other? Imagine in 5 years you will know that certain coffee or a t-shirt has a supply chain powered by blockchain and other products do not. That is going to change entirely the world of brand trust and customer loyalty.
What are the noticeable signs of the shift towards more holistic solutions in fashion?
N.F.: Apparently, in last 10 years the number of people becoming vegan has tripled in UK. This is going to bring new models of consuming, communicating and producing. Many customers are looking for alternatives to leather for example. Many businesses are adopting strategies to become more sustainable and trusted. Adopting new technologies, such as artificial intelligence, will be a game changer. We already see it coming.
So what are your next steps?
N.F.: I am joining the Fashion For Good accelerator program lead by Plug and Play and the C&A Foundation. With 9 other exciting startups, we will be taking our solutions further for a more sustainable fashion industry. A Transparent Company will take this opportunity to tailor the product to fashion brands needs, who wish to be pioneers and embrace radical transparency aided by this technology. This 12-week project starts now in Amsterdam and I am looking forward to presenting the outcome in early December to the panel, where the best solutions will be selected for an investment.