Web3 e-Commerce is shaking up luxury and fashion through innovative uses of NFT technology for sustainability, supply-chain management and secondary resale.
Last week, we wrote about how Millennials and Generation Z make up a distinct market for the fashion industry, and for e-commerce more generally. In that article, we focussed on how web3 can open up new domains of digital fashion, perfectly suited for the digital native generations.
But there is another side to the modern consumer that the fashion industry must come to grips with. According to a recent Deloitte report, more than half of millennials say they have either started or stopped doing business with a certain company based on their environmental impact. Millennials are values-driven. 73% of them are willing to pay more for sustainable goods. For e-commerce brands willing to adjust, there is a large market to address.
Sustainability is at the core of the conversation between fashion and millennials. Already, labels are taking the lead. Cult & Rain, one such e-commerce label, sells luxury, made-to-order Italian sneakers, alongside paired NFT digital tokens.
“In a world where technology has made mass production and fast fashion the norm, luxury Web3 made-to-order stands out as a beacon of quality and individuality,” says CMO Andy Griffiths, whose brand’s sneakers sell for upwards of a thousand dollars. “Focussing on delivering a high quality and sustainable physical item with digital counterparts sets us apart.”
Millennials care about how their clothes are made and where they come from. Companies can use blockchain technology to supercharge their sustainability efforts. And they can improve supply-chain efficiency in the process.
Supply Chain On-Chain
Despite the clear imperative from Gen Z and Millennials, the fashion industry generally underperforms when it comes to transparency. A 2019 global study found that the average transparency score amongst 200 of the biggest international brands and retailers was just 21%.
Interestingly, however, it is those brands that are most prominent in web3 that also score the highest in the study. Adidas, who tops the list of brands with a transparency score of 64%, has launched several wildly successful NFT collections. Dior, who was an early mover in the space, was the most improved year on year.
Blockchain makes tracking physical and digital products and materials throughout their entire lifecycle easy and reliable. Whether it be the cotton load that is harvested and sent from the plantation, or the finished product that is shipped overseas, every asset is paired with its own digital passport, which stores all the relevant information, including how it travelled, how long it waited at ports and warehouse, and who was involved in its handling.
Because of how the digital passport data is recorded on the blockchain, it is impossible to tamper with or falsify. Brands using the technology can guarantee their customers that the information regarding the source and fabrication of their products is 100% genuine.
Consumers are skeptical of greenwashing. While concerned about the environment, they currently find only 10% of sustainable business campaigns to be credible. A massive shift is needed to build greater consumer trust. Blockchain verification is the technology to power that shift.
Not only does it have the capacity to expand the sustainable and ethical production of goods on a global scale, it can also be leveraged by business to improve efficiency. Such precise, real-time oversight of the supply chain reveals flaws in the system, which can then be rectified and verified on an ongoing basis. Transparency gives producers a bird’s-eye view into their value chain, leading to better decision-making.
The proof is in the token
By gaining complete visibility over their supply and value chains, labels gain the power to trace provenance and verify authenticity. By using NFTs as certificates of authenticity, brands can combat losses to counterfeiting.
Data shows that 25% of consumers have accidentally purchased a fake product online in the past year. NFT certificates remove this possibility, as customers can quickly and easily check their purchase against the blockchain record. This can even be achieved by embedding a QR code or RFID/NFC label within the physical product that is linked to an NFT. It would be as simple as scanning the item with your smartphone to confirm it’s the real deal.
Look no further than LVMH group, which launched its AURA blockchain alongside other luxury brands to “strengthen our connection with customers by offering them simple solutions to get to know our products better.”
Venly’s NFT API and Token Wallet are best-in-class technology solutions to enable exactly the kind of traceability and certification solutions that LVMH, Louis Vuitton, Prada and others are already pursuing.
It is here that blockchain technology combines both ecological imperative and profit potential. With NFT-verified products, the resale potential of luxury goods skyrockets, while the smart-contract powering the system can allow royalties to be earned each time the product changes hands.
According to Fashion Technology Accelerator, “resale fashion has emerged as an innovative circular economy option to extend the life of fashion products. Through digital platforms providing great user experiences, vintage culture has become a high-growth potential market.” The resale market is expected to grow by 127% by 2026. By 2028, it is expected to have surpassed the value of the fast fashion sector. Demand is growing 24 times faster than retail.
This is all good news for brands that can leverage blockchain technology solutions like the Venly Shopify App or Marketplace API. It’s also good news for the planet, which counts the fashion industry alone as responsible for more than 10% of global carbon emissions and 20% of global water waste. Each year, the industry wastes more than 92 million tonnes of textiles.
Environmentally-conscious Millennials and Gen Z’ers are more and more looking to apps like ThredUp, TheRealReal and Poshmark. They offer ‘peer-to-peer’ marketplace services, or participate themselves in the selling process. Both models are well-suited to blockchain technology.
Elsewhere, a company like LUXARITY is using blockchain not only to power its luxury resale market, but as well to enhance its customer engagement. Customers who buy a pre-loved good also have access, through its NFT certificate, to a complete history of the item's ownership, as well as a digitized, hand-written note from the previous owner. The customer can use the programmable NFT to distribute part of their purchase to charity.
Amidst the global pressures facing luxury and fashion, web3 technology solutions are changing the narrative. By empowering brands, blockchain and NFTs are making supply chains more efficient, providing irrefutable proof of authenticity, and aiding sustainable fashion to address environmental impact.
With the market just beginning to catch on to the possibilities, now is the time to begin integrating blockchain solutions into e-commerce. Venly’s suite of products, including Wallet and NFT APIs and Shopify Plugin, are an integral part of any web3 e-commerce initiative.
Venly is a blockchain technology provider creating tools and products to help companies benefit from blockchain technology. We provide a complete technology stack to bring brands, apps, games and platforms into Web3. We help businesses integrate Web3 technology & onboard users seamlessly. We are making blockchain accessible for everyone.
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