Companies in the fashion sector demand systems that guarantee the traceability of their products, either to protect their reputation, to inform their customers or to guarantee their quality and authenticity.
The blockchain technology (the platform on which virtual currencies are based) eliminates all the negative idiosyncrasies that arise in the relationship between the licensee, the brand, the point of sale and the consumer. Each sale of licensed products can be perfectly registered and the way it is produced and distributed can be verified without the need to invest in additional costs. Here's how:
Blockchain is a type of logbook distributed to maintain a permanent and tamper-proof record of transactional data that cannot be controlled or manipulated, as is protected with a system virtually impossible to hack.
A chain of blocks, or blockchain, functions as a decentralized database that is managed by computers, this means it does not require intermediaries (financial entities or the government). Each team in the distributed network maintains a copy of the logbook and all copies are updated and validated simultaneously.
Thanks to the traceability that allows building a blockchain system, two aspects that we consider to be extremely important will be affected by this system: counterfeits (which move about 500 billion dollars a year) could be limited as they would be evidenced by the veracity of the authorship of the original designs and furthermore, thanks to blockchain, consumers could ensure that brands develop their products sustainably, not only by confirming non-pollution but also by conducting fair trade and involving suppliers who guarantee the quality of the working environment of their employees and a fair wage, as all information would be left behind.
In conclusion, thanks to blockchain technology, we return to the origin of business relationships: trust. Consequently, the world of fashion is immersed in a clear revolution where only those who know how to adapt to the new impositions marked by technological advances will be able to make the most of existing opportunities.
And when does the "but" come?
But...there are obstacles in this millionaire dream. It turns out that this system can only be used by people who really want to use it. And who in the industry is absolutely sure that they can show all their data without the world judging their movements and condemning them for any jumped or unjustified movement?
Very few are those who can be completely transparent and survive in the fashion world but for those who want to keep everything in place ethically, this technology is an encrypted dream.
As far and heavenly as it may sound, this has already been achieved with specialized brands. We are still crossing our fingers to see it happens in the mass market.
With Kanye West, you never know. This time, apart from attracting half of Coachella's total assistance (50.000 out of 100.000 people) to the foot of a hill last Sunday at 9 a.m. to offer a performance crowned as "Sunday service", Kanye West managed to form an infinite queue of people waiting to buy ridiculous overpriced "Church Clothes" merch. The collection was composed of basic, neutral-coloured items, each of which contained several God-fearing slogans, including "Holy Spirit," "God of Trust," and "Jesus Walks". Sweatshirt prices range from 130£ to 215£, and the socks cost 40£.
Even though all sorts of criticisms were made in which jokes abounded, a bunch of people was more than willing to pay an exorbitant amount for the simplest of t-shirts. What's wrong with us? It's not possible for humans - the creators of space stations - to get carried away so easily. Is it? Well, bad news, it is and we'll explain why;
The more expensive something is, the more exclusive and therefore more desirable it becomes. In the eyes of designers, there does not seem to be a shortage of consumers who believe they can buy personal power with what they are wearing. They want the item in the first place, they want items that are scarce or are made in limited runs, and they are willing to pay a lot of money for that to happen.
In many cases, designers raise the price of their products simply to get an added shine of prestige and exclusivity. So, the short answer to why designers charge so much for their products is as simple as; because they can.
It's the price, as much as the product itself, that makes an item remarkable. The price, and the fact that most of the world cannot afford to buy such an item which has the reverse effect of empowering the buyer. In this society, no matter how little we like it, the reality is that personal power is synonymous with purchasing power. And it's not just a marketing tactic, it's a psychological condition that top designers count on
But, what is the real price of clothes?
The gross margins of fashion companies tend to be around 65 per cent, which seems a lot, but it's what the shareholders expect. It also means that a 3,500£ bag costs approximately 1,225£ to produce and bring to market, from materials to sales.
There are many steps along the way that contribute to the final price. There are the costs of raw materials, design, manufacturing and compliance. Then, in retail, there is the cost of prime real estate and sales staff. And finally, there's marketing. Yeah, those brilliant fashion ads cost a lot of money to produce, and much more to place.
That is why, in order to minimize costs with the excuse of boosting exports, increasing economic growth and creating employment in depressed areas, some trade barriers are eliminated in free trade zones that are located in impoverished countries in order to be able to produce their products in countries where the expense of paying workers is minimal.
In Bangladesh, for example, the average pay of these employees is 35£ per month, equivalent to a minimum wage that is among the lowest in the world. This allows firms to lower point-of-sale prices to levels that, if they had to bear the costs of first world wages, taxes and safety conditions, would not be "competitive".
So, do they take their factories to the third world to lower costs or do they do it to further increase their profits?
The underlying problem is to assume that the only way for cheap clothing to be available is for it to be produced in unworthy conditions. In today's interconnected and exposed world, companies take maximum care of their image and one of the reasons why they do not face a strict change is the great social and legal premise that they would suffer if they exposed the "how" of their textile productions.
For fashion companies to stop ignoring what we all know as an open secret, legal reform is needed, as well as an imposition by consumers, who are complicit in the faults of the companies, since in general the concern falls on being able to buy cheap clothes rather than on the conditions of the workers who manufacture them and the climatic consequences that this entails.
Transparency and education are the first steps and the sustainable way to relate to what we wear, the ultimate solution.