Blockchain Technologies in the Textile and Fashion Industry 9811965684, 9789811965685

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Textile Science and Clothing Technology

Subramanian Senthilkannan Muthu   Editor

Blockchain Technologies in the Textile and Fashion Industry

Textile Science and Clothing Technology Series Editor Subramanian Senthilkannan Muthu, SgT Group & API, Hong Kong, Kowloon, Hong Kong

This series aims to broadly cover all the aspects related to textiles science and technology and clothing science and technology. Below are the areas fall under the aims and scope of this series, but not limited to: Production and properties of various natural and synthetic fibres; Production and properties of different yarns, fabrics and apparels; Manufacturing aspects of textiles and clothing; Modelling and Simulation aspects related to textiles and clothing; Production and properties of Nonwovens; Evaluation/testing of various properties of textiles and clothing products; Supply chain management of textiles and clothing; Aspects related to Clothing Science such as comfort; Functional aspects and evaluation of textiles; Textile biomaterials and bioengineering; Nano, micro, smart, sport and intelligent textiles; Various aspects of industrial and technical applications of textiles and clothing; Apparel manufacturing and engineering; New developments and applications pertaining to textiles and clothing materials and their manufacturing methods; Textile design aspects; Sustainable fashion and textiles; Green Textiles and Eco-Fashion; Sustainability aspects of textiles and clothing; Environmental assessments of textiles and clothing supply chain; Green Composites; Sustainable Luxury and Sustainable Consumption; Waste Management in Textiles; Sustainability Standards and Green labels; Social and Economic Sustainability of Textiles and Clothing.

Subramanian Senthilkannan Muthu Editor

Blockchain Technologies in the Textile and Fashion Industry

Editor Subramanian Senthilkannan Muthu Green Story Inc. Toronto, ON, Canada

ISSN 2197-9863 ISSN 2197-9871 (electronic) Textile Science and Clothing Technology ISBN 978-981-19-6568-5 ISBN 978-981-19-6569-2 (eBook) https://doi.org/10.1007/978-981-19-6569-2 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Introduction

Blockchain Technology and Sustainable Luxury Global luxury brands have been investing significantly in ‘green’ technologies and other measures to fight against climate change. While this is not limited to innovations in the supply chain, embracing new values and perspectives in response to the evolving needs of consumers and the environment can act as a game-changer. Sustainable luxury is a new concept that refers to business/brand’s excellence in social and environmental dimensions and stresses not harming and doing good for the planet, workers, consumers, and society at large. Luxury and sustainability may be considered contradictory by some consumers as luxury is tied to pleasure and superficiality which oppose moderation and altruism. Luxury is also purchased for status signaling that creates ‘social unrest’. Whereas sustainability is linked to mutual social benefits. Nevertheless, luxury can be an exemplar of sustainability especially the luxury industry accentuates quality excellence, preserving heritage and craftsmanship, as well as defending local products against delocalization in low-wage countries. Thus, luxury might be viewed as possessing a less negative socio-environmental impact compared to mass products. For this reason, luxury brands need to increase visibility and transparency and encourage traceability throughout the supply chain. This chapter aims to discuss how luxury brands can custom blockchain technology to trace their supply chains, and how this can help in creating a real brand sustainable image and value expected to enhance consumers purchasing behavior toward sustainable luxury brands. Nermain Al-Issa Omar Ali Marsela Thanasi American University of the Middle East Egaila, Kuwait

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Contents

Combating Luxury Counterfeiting Through Blockchain Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Marsela Thanasi-Boçe, Nermain AL-Issa, and Omar Ali Boosting Luxury Sustainability Through Blockchain Technology . . . . . . . Nermain AL-Issa, Marsela Thanasi-Boçe, and Omar Ali DIGITAL HESITANCY: Examining the Organisational Mindset Required for the Adoption of Digitalised Textile Supply Chain Transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hilde Heim, Courtney Chrimes, and Christopher Green Blockchain Utility by Pioneers in Fashion and Apparel Industry . . . . . . . K. Divea and R. Surjit

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The Future of Blockchain for Wastewater Treatment in the Textiles Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 B. Senthil Rathi and P. Senthil Kumar

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About the Editor

Dr. Subramanian Senthilkannan Muthu currently works for Green Story, Inc. Canada as Chief Sustainability Officer and is based out of Hong Kong. He earned his PhD from The Hong Kong Polytechnic University and is a renowned expert in the areas of Environmental Sustainability in Textiles & Clothing Supply Chain, Product Life Cycle Assessment (LCA) and Product Carbon Footprint Assessment (PCF) in various industrial sectors. He has 5 years of industrial experience in textile manufacturing, research and development and textile testing and over a decade’s of experience in life cycle assessment (LCA), carbon and ecological footprints assessment of various consumer products. He has published more than 100 research publications, written numerous book chapters and authored/edited over 100 books in the areas of Carbon Footprint, Recycling, Environmental Assessment and Environmental Sustainability.

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Combating Luxury Counterfeiting Through Blockchain Technology Marsela Thanasi-Boçe, Nermain AL-Issa, and Omar Ali

Abstract The new rapid growth of counterfeiting in the luxury apparel industry has built a global and highly sophisticated market. The Global Brand Counterfeiting Report in 2018 has reported losses incurred by luxury brands because of the sale of counterfeiting through the Internet only to 30.3 billion USD, demonstrating the growing need for taking action. When luxury products are counterfeited, the sense of exclusivity of brands is lost, and the reputation built on craft, origin, and quality is certainly diluted. As the luxury resale market continues to grow and counterfeit culture persists, the ability to verify quickly and easily that a product is authentic is becoming a necessity for any luxury brand. In attempts to reassure consumers about the originality of their purchases and improve their experience in luxury consumption, luxury brands need to find innovative ways that ensure the protection of their authenticity. The distributed ledger technologies like blockchain technology enabled in the fashion industry have provided solutions to increasing transparency by allowing stakeholders, such as fashion houses, retailers, and consumers, to claim authenticity, track ownership, and make effective decisions based on unified and reliable information. In this context, this chapter aims to discuss the negative impact of counterfeiting on the luxury industry and identify the potential role of blockchain technology in combating luxury counterfeiting globally. Furthermore, the chapter will discuss some cases of the luxury companies that have already integrated successfully the blockchain technology in the luxury industry. Keywords Luxury brand · Luxury resale market · Authenticity certification · Counterfeiting · Advanced technology · Blockchain

M. Thanasi-Boçe (B) · N. AL-Issa · O. Ali College of Business Administration, American University of the Middle East, Egaila, Kuwait e-mail: [email protected] N. AL-Issa e-mail: [email protected] O. Ali e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 S. S. Muthu (ed.), Blockchain Technologies in the Textile and Fashion Industry, Textile Science and Clothing Technology, https://doi.org/10.1007/978-981-19-6569-2_1

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1 Introduction Blockchain is an advanced technology that has achieved significant acknowledgment in various industry sectors for its ability to transform business models and frameworks. The concept of “blockchain” refers to shared databases and peer-to-peer networks that allow storing and using a registry of transactions cryptographically chained in shared distributed digital databases. The blockchain system processes any digital transactions over a network of users and tracks the tangible or intangible assets involved in it. Blockchain technology promises to create transparent supply chains that generate provenance knowledge by allowing all parties involved, including customers, to trace the origin, certifying authenticity, track custody, and verify the integrity of products [28]. As a result, the application of blockchain technology has attracted the attention of managers and researchers recently. Blockchain-based apps and platforms have become increasingly popular in various industries over the past few years, from airlines to the retail industry, although existing work about the potential challenges and opportunities of blockchain adoption remains scarce [5]. More specifically, research on the use of blockchain in combating the counterfeit of luxury products is in its infancy stage [38]. Only a few studies that explore the benefits and challenges of blockchain technology implementation in the fight against counterfeiting and supply chain optimization have been found in the body of literature in the last 5 years [4]. Therefore, this study aims to explore the negative effects of counterfeiting on the luxury industry and discuss the potential role of blockchain technology in combating luxury counterfeiting globally. Furthermore, the chapter will discuss some cases of the luxury companies that have already integrated successfully the blockchain technology in the luxury industry. The chapter is organized as follows: Sect. 2 reviews the definition of counterfeiting and its negative impact on the global business trade. Section 3 discusses the characteristics of luxury brands and luxury markets with a focus on primary and secondary luxury markets. A review of the literature on advanced technologies used so far to combat counterfeiting is presented in Sect. 4, which is followed by Sect. 5 in which the features and benefits of blockchain technology are explained. Examples of luxury companies and consortiums utilizing blockchain technology are also provided in this section. Furthermore, the challenges of using blockchain technology associated with managerial implications to overcome these challenges are discussed. In the end, conclusions are provided to finalize the chapter.

2 Definition of Counterfeiting Counterfeit products are illegal and imitated products at a lower quality on the market that possess a high brand value.

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Counterfeiting is illegitimate trade by counterfeiters who falsify the labels of real products or develop imitations of genuine products or apply real products’ tags to counterfeit products [3, 21]. Through these illegal activities, counterfeiters violate the intellectual property rights of many companies in various sectors. This phenomenon is harming businesses’ financial performance and diluting brand names by creating negative perceptions about brands in their customers’ eyes. Depending on the setting counterfeiting is occurring, two different types of counterfeiting have been identified: deceptive and non-deceptive counterfeiting. Deceptive counterfeit happens when the counterfeit product looks identical to the original product and the customer is unable to differentiate ex-ante between the two product types, while non-deceptive counterfeit occurs when a customer can distinguish a counterfeit product and is conscient of buying it. Typically, a non-deceptive counterfeit happens due to economic reasons [33]. The key factors that have affected the explosion of counterfeit in the last decade are the advances in technology, the international trade growth, and the significant escalation of the emerging markets. The production of counterfeit products is facilitated by sophisticated technologies that have been used to obtain, process, and reproduce images at the highest quality like original brands. On the other side, the extensive use of new digital channels for online sales has simplified the distribution of counterfeit products proposing new ways to address and reach consumers [7, 27]. Furthermore, the development of e-commerce and online trading mechanisms has led to new retail markets for counterfeit products [12]. The various forms of illegitimate trade have been addressed by companies generally through taking legal actions, adopting new technologies, increasing control over the supply chain, and developing communication campaigns to raise awareness about the negative effects of counterfeiting [11].

2.1 Geography of Counterfeiting The counterfeit market is estimated to have a significant value at about 2.5 percent of the world trade or estimated as $4.64 trillion in 2019, while the imports of counterfeit and pirated products into the European Union (EU) amounted to around $1.34 trillion, which represents up to 5.8% of EU imports [30]. While counterfeit and pirated goods originate from virtually all economies on all continents, China remains the primary economy of origin. The top four provenance economies where counterfeit and pirated goods are widespread due to unethical business practices of counterfeiting organizations in 2017–2019 are China, Hong Kong (China), Singapore, Turkey, and the United Arab Emirates. These are all welldeveloped, high-income economies, and important hubs of international trade [30]. The most impacted sectors with the highest propensity to be affected by counterfeiting in 2017–2019 are perfumery and cosmetics, articles of leather, clothing, footwear, and watches [30].

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Counterfeiters use complex trade routes as a strategy to lose track of their shipments from being disclosed by governmental authorities. Mapping the trade routes for counterfeit products is indispensable in developing effective policies against counterfeiting.

3 Luxury Brands (LB) Counterfeiting There is no consensus in the literature about a specific definition of a luxury brand as a luxury brand represents the meaning it brings to the life of each customer [19]. A customer-oriented definition provided by Ko et al. [22] emphasizes that luxury brand perception is related to the exceptional quality of a brand, its authentic value, prestigious image, the worthiness of paying a premium price, and its capability to build strong emotional bonds with consumers. An LB is associated with symbolic meaning that satisfies consumers’ psychological needs providing more psychological benefits rather than functional benefits. This is a key attribute of a luxury brand that distinguishes it from a nonluxury one (Becker 2018). When looking for buying a luxury brand, a consumer is motivated by five prestigebuilding values, such as conspicuous, unique, social, hedonic, and quality value [41]. The prestige of luxury brands is related to scarcity as they are perceived as exceptional or rare. The sense of exclusivity is supported by expensive prices and reflected in limited edition products that make the owners feel they belong to the few elected representatives [20]. Rolex, Patek Philippe, Audemars Piguet, and Richard Mille (the big four watchmakers) launch only limited production of their timepieces to emphasize rarity [15], and, on the other side, they motivate customers to consider their purchases as investments as the price of these rare pieces increases over time. Not all luxury brands succeed in the market and their success is dependent on their capability to build brand authenticity. The notion of authenticity is associated with the concept of genuineness and truth. Authenticity is characterized by connection, conformity, and consistency [17]. According to Statista, the global luxury market value is evaluated at $309.6 billion in 2021 and is expected to increase to US$382.6 billion in 2025. The growth of the luxury market can be further supported by developing efficient supply chains and increasing control over them. This is a challenge for many luxury businesses nowadays; however, luxury companies need to prevent the creation of counterfeit and gray markets by exercising full control of their supply chains [4]. Counterfeiting in the luxury market has become an extensive global concern due to the direct impact on loss in sales and brand image dilution of luxury brands. Harvard Business Review (HBR) has reported that fake luxury merchandise in 2019 accounts for up to $4.5 trillion in total trade in fakes [14, 35]. Counterfeiting can be deceptive with consumers unknowingly purchasing a counterfeit product, but in the case of LBs, the literature discusses mainly non-deceptive counterfeiting [12].

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From an analysis of 32 interviews conducted by Reuters with luxury executives, representatives of luxury industry associations, and academic and public experts on anti-counterfeiting, it was revealed that the failure of luxury companies to combat counterfeiting is embedded in the managerial decision-making about their development. LBs have been focused more on distributing luxury signals to build status rather than delivering real luxury. The efforts of LBs across the luxury industry have been put on emphasizing intangible attributes such as name and logo over tangible quality attributes. Furthermore, luxury companies have relocated production to countries with low labor costs. These decisions have led to lesser control over the supply chain disconnecting luxury companies from their physical products. Moreover, they have negatively affected customers’ associations with LBs’ history and country of origin relaxing customers from the concerns of buying counterfeit products [14, 35].

3.1 Luxury Resale Market For many consumers who dream to own a luxury item but cannot afford it, the solution is to buy a pre-owned luxury brand available in second-hand marketplaces. Undeniably, purchasing used luxury products is the only alternative to owning an original luxury product. The second-hand market for luxury goods is estimated by Boston Consulting Group research to be worth $36 billion in 2021, around 30 percent more than in 2018 [26]. Global Brand Counterfeiting Report in [16] has reported a loss of sales of over $30 billion from online counterfeiting only, mainly due to a lack of law enforcement. Luxury retailers that sell through second-hand luxury platforms employ many brand authenticators to ensure customers about the safety and reliability of their platforms and that all items available on their platforms are authenticated by experts. Examples of such retailers are Vestiaire Collective and RealReal. According to [42] Luxe Digital [25] the most popular luxury retail sites are Fashionphile, Luxury Garage Sale, Rebag, Vestiaire Collective, Collector Square, Bob’s Watches, StockX, RealReal, The Outnet, and The Luxury Closet. However, even the luxury resale market is threatened by counterfeiting. Although trust-building and transparency are at the core of the second-hand luxury business, it is extremely difficult for second-hand luxury retailers to check every single luxury item and ensure authentication. As counterfeit items look-alike like the original ones, it is challenging for luxury brands and second-hand retailers to ensure customers about the originality of all the items listed on their platforms. As the battle against counterfeiters continues, secondhand luxury retailers must find sustainable solutions to overcome these challenges.

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3.2 Who Buys Counterfeit LBs? Counterfeit markets are built based on the needs of customers for real luxury brands, and therefore understanding the motives that push individuals to buy luxury brands can disclose the insights for buying fake brands too. The high price of luxury brands even in the secondary market pushes many consumers who are looking for building their identity but at the same time cannot afford to buy original products on the black market. In their study, Wilcox et al. [43] explained that consumers’ desire for counterfeit luxury brands centers on their social motivations to express themselves or show they pertain to a certain social class. The preference for a fake brand and the negative change in the desire for an original brand increase when the “attitude towards an LB serve a social-adjustive rather than a value-expressive function” (p. 247). Additionally, consumers’ preferences for fake brands are affected by their moral beliefs about counterfeit consumption only when they are placing importance on the value-expressive function in their attitudes. A meta-analysis of Eisend et al. [12] in developed and less developed countries concluded that customers’ demographics have less impact than physiographic on counterfeit purchases. In developed countries, risk propensity and reduced integrity are stronger determinants of counterfeit purchases sending brand signals that customers try to avoid. While in less developed countries, consumers are seeking a higher status which is related to positive brand signals that support customers in building their identities.

4 Advanced Technologies in Combating Counterfeiting Depending on the developer source, anti-counterfeiting platforms are categorized into self-built platforms, third-party platforms, and platforms built by governmental institutions [45]. The first type usually strives with maintaining issues of counterfeit systems. The outsourced platforms struggle to obtain the trust of consumers and companies, while the third one is used mostly for traceability purposes [4]. Counterfeiting has hardly hit the luxury industry and most luxury companies nowadays are looking for strategies to track and control the phenomenon [10]. More specifically, the growth of counterfeit markets has activated luxury companies to find effective solutions to improve the performance of luxury authenticity verification [8]. The main issue for many luxury companies is that their supply chain systems and networks rely on centralized database systems with single-point processing, storage, and centralized control which expose the systems to various attacks that may result in violation of data records along the supply chain [46]. The centralized data management system cannot ensure data security as it is hard to prevent all bad intentional activities that seek to corrupt, modify, or steal the information in the database.

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Today, many companies in the luxury sector are still struggling to find solutions to this persistent problem. A variety of advanced technologies that use tools that support identifying deceptive processes or arrangements in the supply chain have been discussed in the literature and utilized by luxury brands to combat counterfeiting [27]. Based on tagging and DNA analysis, as well as web-based monitoring systems, trace and track technologies allow manufacturers to combat counterfeiting through effective control of the entire production and distribution chain. Keeping valid computer records of every step of the process of documenting, registering, or patenting original designs as proof of ownership could help designers resist counterfeiting [31]. Obvious features are used to deter copying and reassure users about the originality of the products,they are used by enforcement operatives and forensic features are useful to produce a final verification level that can provide unequivocal proof of authenticity for legal or prosecution purposes. Overt counterfeiting deterrents include holograms, security seals, and color shift inks. Smart holograms produce an interactive, bio-optical hologram, called Verif-EYE, which can be used to enable customers to authenticate goods. Verif-EYE can be authenticated by any human being since it relies on a stream of breath or just a drop of water to activate. Applied DNA Sciences (APDN) SigNature DNA security solution provides forensic authentication for luxury goods and other industries. An example of a company that provides a multi-layered anti-counterfeit solution is Covectra. It offers serialization, authentication, and track-and-trace technology services [44]. Another concern on the matter is that authentication systems are mainly developed to be used by producers and the opportunity to verify authenticity is usually not available to final consumers. Some technological attempts that have commonly been deployed to solve it are serial numbers, watermarks, holograms, barcodes/QR codes, special inks/dyes/papers/labels, and others [44]. Meraviglia [27] emphasized the absence of the role of the consumer in the battle against counterfeiting. The author addressed this issue by presenting an innovative method of product monitoring based on the latest generation IT platforms, integrated with portable devices, that can easily and immediately verify product authenticity. The consumer as an essential party of the supply chain is absent [27]. Similarly, [45] Rana and Ciardulli [34] presented a simple authentication system implemented on a smartphone app and available to consumers based on the use of public-key cryptography combined with an ID barcode and an online product ID verification system. However, these tactics have not resulted to have a long-lasting effect in the battle against counterfeiting. The problem stands at the conceptualization of the solution provided. The database system that has stored all the secret information is centralized. Its security can be easily cracked, and data can be manipulated. Other anti-counterfeiting materials can be utilized in a variety of applications that can help identify counterfeit products. For example, [42] discussed the benefits of silver nanowire (AgNW) films that have been widely used as flexible transparent electrodes due to the high electrical conductance and high transmittance in the visible range and the infrared (IR) properties of AgNW films. The authors showed that

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ultrathin AgNWs present high transmittance in the visible range (∼95%) and high reflectance (60–70%) in the IR range of 8–14 µm. Such a significant difference makes AgNW films invisible to naked eyes but visible under an IR camera, being an ideal selection for anti-counterfeit technologies, while no excitation is required. The authors demonstrated that AgNW films can be spray-coated on either flat or microstructured surfaces with high conformability and high scratch resistance. Another anti-counterfeiting security system is based on RFID technology. The system uses a typically distributed RFID tracking and tracing system as a visual information management system for luxury brands. It can determine the source of the product timely and effectively, track-and-trace products’ logistics information, and prevent fake goods and gray goods from getting into the normal supply chain channels [6, 47]. Although RFID Technologies or holograms have been used to identify counterfeit products, these solutions face two important issues. First, the original tag can be copied using the advanced technologies, and second, once the original tag has been removed from the luxury item at the counter, the authenticity of the luxury item in the second-hand purchase cannot be easily verified and the originality can no longer be guaranteed [33]. Several luxury companies have utilized various anti-counterfeit technologies to protect their brands. Some examples are provided below: • Hublot, the watchmaker company, developed a smartcard authentication solution allowing the customers to authenticate their Swiss watches via the Internet. • Using digital printing, the Dublin Institute of Technology has developed a volume hologram that uses a reflected laser on light-sensitive plastic making it more secure than surface holograms. • Solos, a brand protection company, has collaborated with the KSS-Kodak Security Solutions to support numerous fashion companies protect their brands through the development of several overt and covert authentication devices. Traceless is an example of these devices that have used a unique combination of forensically invisible marker materials and digital technology [31]. • Cosmetic companies are using intelligent packaging technologies for brand security and product authentication of their high-value products. Alien Technology Corporation has developed a covert RFID technology, which can be included under the labels of pharmaceutical and cosmetic products, enabling individual packs to be tracked and traced, as well as providing safeguards against counterfeiting and diversion. • Barbour luxury clothing firm in collaboration with an Internet security firm named Search Laboratory has launched a campaign across Google’s paid search network to identify and close all online sites trading counterfeit copies. The campaign’s goal is to educate Barbour brand customers about the consequences of purchasing a counterfeit product. • VeChain, developed in 2018 in China, provides luxury brands with anticounterfeiting chips within intelligent design contracts, protecting their commodity rights [27].

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• Luxochain combines several technologies besides blockchain to control the authenticity of luxury products before their purchase [4].

5 Blockchain Technology 5.1 How It Works Blockchain is constituted by a chain of recorded transactions represented by blocks that are linked and secured cryptographically. Usually referred to as a “distributed ledger”, blockchain stores all records of transactions conducted by every user in the blockchain, secures the information by public-key cryptography, and communicates it to the users’ network. Each user in the blockchain can perform transactions and obtain a copy of data transactions that have been stored so far. When a new transaction takes place in a blockchain network, the data of that transaction is transmitted to the peer network together with a copy of all the related information that has been earlier stored on the blockchain up to that time. The transaction is verified from the peer network and then provided with a unique address/identity that allows it to add as a new block at the end of the chain [39]. Once a transaction is completed and added as a new block to the chain, it cannot be modified or adjusted, building an unchangeable ledger of records with historic transaction data [5]. Figure 1 illustrates the transaction steps in the block building process.

Fig. 1 The blockchain process (Source [5])

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5.2 Key Blockchain Features The key characteristics of the blockchain technology are explained below: Decentralization: The first unique facet of blockchain is the default use of a decentralized digital database, which refers to the fact that a decentralized copy of any blockchain transaction exists for other users of the network. This allows every party to access the entire transaction background of previous transactions made by any parties involved [36], and each user has its own, local copy of each blockchain created. Therefore, to change information that already exists in the blockchain, one would have to modify all existing peers that already contain all the previous information on the blockchain [1, 14]. This distributed transaction validation prevents any party from controlling the flow of information and, at the same time, allows other parties to verify the records of their transaction partner directly, without the use of any intermediaries. As a result, blockchain doesn’t require permissions to store transaction information and use a database, and transaction data are not owned or controlled by either firms or consumers. When transactions occur in blockchain networks each user can closely and securely monitor their personal data, but no parties have control over their data, resulting in wide transparency of all transactions [5]. Transaction efficiency: Blockchain allows quicker and more efficient identity verification processes, with no third-party support needed, as it ensures visibility of the type and features of every occurring transaction to any party with access to the blockchain network. The execution of any transaction between two parties and their communication process takes place directly without any intermediary to validate and store information, as it is viewed as a trust machine that ensures data integrity for all transaction parties. The elimination of intermediaries from peer-to-peer transactions makes the transactions more time- and cost-effective [39]. Pseudonymity: Each user has a unique identifier/address that identifies every transaction made in the network. Transactions only occur between the validated unique addresses possessed by various network users. The users can remain fully anonymized from other users or choose to reveal some evidence of their identity. Large amounts of anonymous customer data can be stored safely, ensuring individual anonymity while also allowing third parties to use this data to offer more value to their customers [24]. Irreversibility of transaction records: Another feature of blockchain is the irreversibility of transaction records. Once any transaction is made and entered into the decentralized blockchain database, the records cannot change because they are linked to all previously made transactions [9]. Data of blockchain-based transactions exist at multiple parties over the network, and every transaction that occurs is permanently recorded in chronological order. Therefore, blockchain data remain consistent, time-stamped, and accurate [5].

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5.3 Benefits of Using Blockchain The luxury goods market has recently seen the emergence of several anticounterfeiting blockchain platforms and solutions which can benefit both manufacturers and consumers [37]. The blockchain system is cost-effective and its implementation can ensure cutting costs related to uncovering fraudulent activity [40]. It provides an opportunity for businesses to extend control over the entire supply chain industry, improving the supply chain’s effectiveness [46]. An efficient supply chain is characterized by trust and transparency between all members who can easily trace reliable information along the chain. Other benefits of using blockchain are derived from the blockchain features such as verification of the originality of products through trustworthy, safe, and reliable data retrieval with no need for permission from intermediaries in the data system. The managerial capacity of luxury firms to control counterfeiting and take measures against fraudulent activity can be strengthened. Blockchain technology provides a convenient tool for consumers as well to verify the authenticity of the purchased luxury items after accessing a blockchain platform [4]. Using blockchain technology, consumers can clearly see the change in the ownership of the luxury item and can easily verify its authenticity which can strengthen consumer trust and increase brand revenue. Additionally, it is an evolving solution in the second-hand luxury market for resellers, retailers, and customers. Implemented successfully, blockchain technology can prevent counterfeiting from being expanded in developing countries where control over the supply chain is critical.

5.4 Examples of Luxury Firms Using Blockchain Technology Some examples of companies using blockchain technology are presented below: Everledger prevents the counterfeiting of diamonds by recording their source and transferring the information to a blockchain database. The company has registered more than 1.6 million diamonds on a blockchain including attributes like the origin, weight, color, carat, and certificate number [28]. LVMH and diamond company Chow Tai Fook give access to information about their luxury products using blockchain-based applications. Customers can retrieve the data about the source and transactions history through a mobile application by scanning the product’s QR code [33]. BabyGhost collaborated with Vechain in 2017 embedding an NFC or a QR code on each of Babyghost’s products to fight the fake version of high fashion designers’ products. Users could scan the code and verify the authenticity of VeChain’s application using an immutable ledger to record transactions [13].

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5.5 AURA Consortium Louis Vuitton has been considered one of the luxury brands affected the most by counterfeiting in the world. The brand has used steady styles and materials over the years which have increased the opportunity for counterfeiters to utilize sophisticated methods for replicating the brand. In this context, LVMH, LV’s mother company has advanced a step further against counterfeiting. In May 2019, LVMH created a partnership with Microsoft and ConsenSys, a software business, and announced the launch of a blockchain-based platform for authenticating luxury goods [18, 29]. Two years later, in April 2021, Aura Consortium was created by LVMH, Prada Group, and Cartier, as a nonprofit organization that aims at exploiting blockchain technology to raise the standards of luxury addressing significant issues across the luxury industry. The consortium is open to all luxury firms irrespective of their size that are seeking to ensure greater security for their customers providing them with an encrypted certificate of guarantee for each genuine product. Each company can benefit from using the blockchain if it pays licensing fees and a fixed fee per product. Apart from product authentication, customers can have access to historical information about luxury items, at different stages of the product lifecycle. As a result, the greater traceability enabled through AURA smooths the second-hand market development [32]. Furthermore, the AURA blockchain solution is engaged in solving issues related to responsible sourcing and luxury sustainability.

5.6 Arianee Consortium Arianne is launched in 2017 by several entrepreneurs as an independent, nonprofit consortium that aims at providing digital certification of luxury goods through opensource and decentralized blockchain technology. The Arianee blockchain solution addresses the transparency, traceability, security, sustainability, and privacy concerns of all stakeholders in a luxury supply chain. Its protocol creates a unique, digital identity card for each luxury piece which when accessed by its users can provide them with all needed information about the luxury brand in a secure, permanent, and anonymous communication channel. In 2020, Arianee developed a platform named SaaS accessible by all brands that are willing to integrate it. Brands can customize and personalize their experience by developing their own user interface and producing digital passports in real time, directly from their IT infrastructure. Several brands have already become part of the Arianee Consortium such as Richemont, Breitling, Vacheron Constantin, Panerai, Audemars Piguet, Roger Dubuis, Verlan, Satoshi Studio, Manufacture Royale, and others.

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6 Managerial Implications Blockchain technology is a costly solution which can be a major reason why luxury companies are reluctant to adopt them. The costs associated with blockchain implementation are considerable and it is important to understand when such adoption is beneficial to a manufacturer as opposed to traditional price signaling strategies [33]. Therefore, luxury companies are suggested to start with the implementation of private blockchain networks that involve a few suppliers in an initial stage [4]. While blockchain can help deal with counterfeiting, customer privacy is a major concern in its implementation. To utilize blockchain, customers have to share their personal information if they purchase the product from a physical store with cash. With blockchain, customers must leave their information by downloading a mobile app or registering themselves as an owner to obtain a private key. The information acquired from customers can be utilized by luxury companies to design and send personalized promotions to customers who may consider it an invasion of their privacy and increase their concerns about how companies may use their data for blockchain implementation [33]. As blockchain increases supply chain transparency, scrutiny from customers and other interested people becomes possible and some of this additional attention might be negative. It would increase the exposure of the firm to competitors and other organizations, thus risking trade secrets, intellectual property, and supply chain details. Regardless of the specific industry context, firms considering this solution to increase customers’ provenance knowledge must carefully analyze all stakeholders and their reactions to a fully transparent supply chain [28]. Building meaningful chains for customers is important as data without meaning is useless and many existing versions of blockchain solutions are overly technical and provide massive volumes of information that may be non-useful to users. Provenance knowledge reduces customers’ perceived risks and reinforces customers’ confidence in purchasing and consuming luxury products. However, customers may face information overload and may experience new perceived risks about excessive volumes of data. Thus, managers using or considering using a blockchain solution to generate provenance knowledge must develop an interface that adds value to customers’ decision-making processes without overloading them with useless facts. In the second-hand market, the luxury resellers can create partnerships with luxury brands, to build trust among customers and further improve the reputation of the pre-owned luxury market. Luxury brand companies need to focus on postsale services such as maintenance and repairs on the secondary luxury market, as potential directions for exploration. In addition, controlling the second-hand luxury market can lower the counterfeiting effects by affecting customers’ decisions on purchasing fake luxury items. If the luxury manufacturer sold second-hand items throughout their established distribution channel, customers could buy genuine items at more affordable prices without taking the risk of purchasing counterfeit products. This strategy can increase the luxury companies’ control over their products throughout their lifecycles. Audemars

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Piguet, the Swiss luxury watchmaker, started implementing this strategy in 2018 [23]. The battle against counterfeiters cannot be won alone. Luxury brand companies need to collaborate with governments to strengthen the enforcement powers to confiscate and destroy counterfeit goods, and to prosecute all the online and offline sellers of counterfeit goods. Mapping the trade routes for counterfeit products is indispensable in developing effective policies against counterfeiting [30].

7 Conclusion As technology is utilized to design and produce fake luxury goods, we believe that likewise the advanced technology can provide solutions to combat counterfeiting. Drawing attention to the challenges that luxury brands face in their supply chains, blockchain technology represents an advanced means of solving the counterfeit issues that luxury brands and other actors in the luxury goods sector are facing regarding traceability and transparency of LB information. Integrating the counterfeiting facts with the luxury brands theory and examples, this chapter provides insights for managers in the luxury industry about the measures they can take in their fight against counterfeiting. As the major counterfeit issues derive from increased customer demand for counterfeit products [21, 36], especially in emerging markets, a research future direction would be to further explore and differentiate the motives that engage consumers in luxury counterfeit consumption in different cultures. In addition, it would be of great interest for researchers and practitioners to measure the effectiveness of anticounterfeit strategies of luxury companies at various levels of luxury and in different industries.

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Boosting Luxury Sustainability Through Blockchain Technology Nermain AL-Issa, Marsela Thanasi-Boçe, and Omar Ali

Abstract Global luxury brands have been investing significantly in “green” technologies and other measures to fight against climate change. While this is not limited to innovations in the supply chain, embracing new values and perspectives in response to the evolving needs of consumers and the environment can act as a game-changer. Sustainable luxury is a new concept that refers to a business/brand’s excellence in social and environmental dimensions and stresses not harming and doing good for the planet, workers, consumers, and society at large. Luxury and sustainability may be considered contradictory by some consumers as luxury is tied to pleasure and superficiality which oppose moderation and altruism. Luxury is also purchased for status signaling that creates ‘social unrest’. Whereas sustainability is linked to mutual social benefits. Nevertheless, luxury can be an exemplar of sustainability especially the luxury industry accentuates quality excellence, preserving heritage and craftsmanship, as well as defends local products against delocalization in low-wage countries. Thus, luxury might be viewed as possessing a less negative socio-environmental impact compared to mass products. For this reason, luxury brands need to increase visibility and transparency and encourage traceability throughout the supply chain. This chapter aims to discuss how luxury brands can custom blockchain technology to trace their supply chains, and how this can help in creating a real brand sustainable image and value expected to enhance consumers purchasing behavior toward sustainable luxury brands. Keywords Sustainable luxury · Ethical luxury · Luxury blockchain technology · Transparency · Traceability · Tradability · Authentication

N. AL-Issa (B) · M. Thanasi-Boçe · O. Ali College of Business Administration, American University of the Middle East, Egaila, Kuwait e-mail: [email protected] M. Thanasi-Boçe e-mail: [email protected] O. Ali e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 S. S. Muthu (ed.), Blockchain Technologies in the Textile and Fashion Industry, Textile Science and Clothing Technology, https://doi.org/10.1007/978-981-19-6569-2_2

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1 Introduction Luxurious brands have been investing vast sums in “green” technology and other measures to combat climate change. Innovations within the supply chain are not the only way to make a difference, but embracing new values and perspectives in response to changing consumer preferences and environmental concerns can have a profound impact on the business. In response to the market demands, sustainable luxury products have evolved. Sustainable luxury is a new concept. According to [16], sustainable luxury refers to a business/brand’s excellence in social and environmental dimensions and stresses not harming and doing good for the planet, workers, consumers, and society at large. Consumers may consider luxury and sustainability incompatible, especially since luxury is known for its overproduction and waste of resources, putting the lives of future generations at risk. Moreover, luxury is associated with indulgence, personal pleasure, and superficiality, which oppose moderation and altruism. Luxuries are also purchased to create a sense of status that causes ‘social unrest’ and inequality. Sustainability, however, is associated with mutual social benefits [3]. In this regard, the luxury fashion industry has been the subject of constant scrutiny for unethical practices and has recently been targeted by the media as being behind in terms of social and environmental sustainability because fashion items are the most visible and communicate the identity of the owner among all types of luxury products. Some researchers even state that sustainability is irrelevant for fashion items [41]. Nevertheless, luxury can be an exemplar of sustainability. The luxury industry accentuates quality excellence, preserving heritage and craftsmanship, and defending local products against delocalization in low-wage countries. Thus, luxury might have a less negative socio-environmental impact than mass products [3]. As part of marketing and branding, the luxury industry heavily relies on communications. Media sharing of sustainable images and videos and the disclosure of social and environmental information in reports and websites that adhere to international standards are some ways luxury brands communicate sustainable aspects of the business. Yet, luxury brands need to increase visibility and transparency and encourage traceability throughout the supply chain to emphasize social and environmental values [45]. In this chapter, Sect. 1 provides an overview of the luxury apparel industry. Sect. 2 discusses some unethical practices in the industry. Sect. 3 offers some sustainable solutions and practices carried out by some luxury brands. Sect. 4 illustrates how blockchain technology can help luxury brands emphasize a sustainable image along with projected challenges. Lastly, Sect. 5 provides a summary of the chapter.

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2 Luxury Fashion Industry As the industrial revolution reshaped Western economies, the fashion industry contributed immensely to the economies of many East Asian nations. This industry has recently played an important role in the economic growth of many nations in South and Southeast Asia. The shift in trade from developed to developing countries is primarily the result of low-cost country sourcing, which created more complex global supply chains. Luxury fashion brands are usually outsourced to production facilities across the globe rather than owning their production facilities. These issues have raised questions regarding transparency and concerns regarding the social and environmental aspects of the luxury fashion industry. “In fashion, authenticity is important, limited edition is important, being the first to wear or discover something is important. People buy luxury not because they just care about brands’ craftsmanship and high quality, but because they want to communicate their economic status and their social status. At the same time, they care about the raw material. Millennials and Generation Z consumers who make up 30% of all luxury shoppers, and are expected to represent 45% percent by 2025, are concerned about luxury brands’ sustainable practices. Therefore, luxury brands need to accelerate their work toward sustainability and conscious living if they want to stay relevant, and they need to prove the authenticity of their products. For that reason, developing methods offering transparency to consumers and showcasing fair and ethical practices are no more optional.

3 Unethical Practices in Luxury Industry The fashion industry is the second largest contributor to global pollution in the world after the oil industry [52]. Every element of the production is responsible for this devastation, from production and manufacturing to shipping and transportation. Low tech, labor-intense, and pressure for competitive prices have led to human exploitation in the fashion industry. Many consumers assume that more expensive products are made ethically in highquality factories. But this is not the case with some luxury brands like Prada, Hermes, Fendi, Celine, and Christian Dior as revealed by KnowTheChain. In developing nations, there are tens of millions of people working under sweatshop conditions (i.e., crowded workplaces with very poor, socially unacceptable, or illegal working conditions). In Italy, for instance, Chinese laborers are sometimes subjected to forced labor in textile factories, and in Bulgaria, Macedonia, Moldova, Romania, and Turkey, workers have been denied time off and had to work overtime beyond legal limits for shockingly low wages. [51]. According to most recent reports on the fashion industry [36, 37, 39, 42, 50, 51, 56], the fashion business is considered harmful to the environment and society in several ways:

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3.1 Water Pollution and Over-Consumption The fashion industry has a significant impact on water. It leaks toxic chemicals into water resources and damages ecosystems. The untreated dumping of dye baths into waterways results in the release of poisonous chemicals that are found in fabric dyes. In developing nations, 90% of wastewaters from textile-related projects are discharged into waterways without being properly treated.

“The wastewater produced by fabrics dyeing pollutes the water table and gets into rivers and oceans which is a major problem in countries that still dominate the dyeing industry like China, Bangladesh, Thailand, and Indonesia” [20]

Across the value chain of this industry, water is a key issue. The majority of risks relating to the supply chain are associated with the manufacturing process. There are only 10% of fashion companies are aware of the problem of water pollution across the value chain. As a result, fashion producers are under increasing pressure to address the issue of water pollution. In her comment, Marie-Claire Daveu, chief sustainability officer at luxury goods maker Kering said: “Water use in tanneries calls for special wastewater treatment measures. In collaboration with our suppliers, we’re improving processes and implementing programs to safeguard the environment all along the supply chain.” There are around 1.5 trillion liters of freshwater needed to grow natural fibers for textiles every year, and more than 20,000 L needed to grow a kilogram of cotton. To produce 1 ton of dyed fabric, 200 tons of freshwater is needed, to produce 1.5 trillion liters for the plants used for growing natural fibers (textiles). As a result of such highwater consumption for manufacturing purposes, people have limited access to safe drinking water. There are about 750 million people worldwide who lack access to fresh water. Aside from that, cotton production in Central Asia has led to the drying of the Aral Sea. It has been reported that 100 million people in India do not have access to clean drinking water. 85% of India’s drinking needs would be solved by the amount of water used each year to produce cotton.

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3.2 Labor Exploitation According to a report published in The Daily Mail (2018), luxury brands like Prada, Fendi, and Dior rank among the worst retailers for protecting consumer data workers from exploitation. The majority of their products are produced in forced labor factories, which employ workers vulnerable to exploitation to make their products. There is a lack of transparency in the supply chains of many popular names in fashion and apparel. This is because they often utilize an opaque web of factories and recruitment agencies whose practices are considered exploitative. The slave labor of today doesn’t look like the slave labor of a century ago. Instead, it involves poor people in developing countries trying to find work at clothing and shoe factories and finding themselves exploited. Workers in poor countries are often made to pay thousands of dollars in recruitment fees that are deducted from their salary. Moreover, the factory could hold the employees’ passports or other key documents until the fee is not paid. If workers don’t earn enough money to pay back the fee, they are essentially slaves. Migrant workers, who make up the bulk of the apparel workforce, are particularly vulnerable to being exploited since they may not understand their rights and do not have strong social support systems that can protect them. All of this is compounded by women’s discrimination in many developing countries. Women compose Two-thirds of apparel and footwear workers and tend to be low-skilled workers from rural areas, who are particularly vulnerable to exploitation. KnowTheChain has developed a scoring system to identify how large, global apparel and footwear companies, from Gap to Louis Vuitton to Nike, are fair in terms of worker treatment. Shockingly, rankings revealed that luxury brands had among the lowest scores (2020). One of the most critical areas of focus in the scoring system is recruitment because brands may work with factories that outsource part of their work to other factories and this is the point in the process when poor workers are most vulnerable to being exploited. No matter where this happens in the supply chain, brands are responsible for their role in the exploitation of workers.

“Indian artisans embroidering typical subcontractor facility in Mumbai” [47]

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Child labor and modern slavery cases are still being reported, particularly in Asian developing countries such as Bangladesh, Indonesia, Sri Lanka, and The Philippines. The UN defines child labor as “work for which the child is either too young or work which, because of its detrimental nature or conditions, is altogether considered unacceptable for children and is prohibited”. To increase their income, many companies attempt to cut down the cost by hiring a cheap labor force. They achieved that by opening industries in countries with low labor costs and sometimes making use of child labor. Child labor is forbidden by law in most countries but is still prevalent in some of the poorest parts of the world. According to the International Labor Organization, an estimated 11% of the global population of children are engaged in child labor. In 2016, Louis Vuitton was found to be among many brands that sourced from factories that reported incidents of child labor which was around 10% of their workers. From an ethical point of view, such practices are deemed unethical as they are subjected to long working hours, and exposure to harm, and they are often paid below the minimum wage. Many of the child laborers work within the fashion supply chain which is hugely complex and is hard for companies to control at every stage of production. That makes it possible to employ children without big brands and consumers ever finding out. In addition, much of the fashion supply chain requires low-skilled labor and some tasks are even better suited to children than adults. For instance, in cotton picking, employers prefer to hire children for their small fingers, which do not damage the crop. Children are also seen as obedient workers who slip under the radar, making them easy to manage. Thus, child labor is viewed as a particular issue in fashion.

“In the fashion industry, children work at all stages of the supply chain from the production of cotton seeds, transferring cotton pollen from one plant to another, yarn spinning, and putting garments together in factories making them subject to long working hours, low wages, and exposure to pesticides” [37]

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3.3 Low wages The fashion industry believes they create employment opportunities in Second and Third World countries like India, China, and Brazil, and because of this, their socalled sweatshops continuously benefit from the lives of their workers, irrespective of whether those employees are paid living wages or not. In most of these countries, the minimum wages paid to employees by contractors hired by the fashion industries, do not even cover their primary needs, let alone allow them to make savings for emergencies and incidentals. In Croatia for example, Hugo Boss suppliers are reported to pay one-third of what would constitute a minimum living wage. As well, Burberry had relocated manufacturing to China to increase the brand’s profits by maximizing the difference between the sale price and production cost. As stated in the Guardian Sustainable Business, “High-end retailers and the luxury sector can appear to exist outside of this system shielded by ideas like craftsmanship and design, but behind the gloss is the same dirt. The same factories and the same working conditions”. “Further insult is added as workers sew and sell items that they have no chance of ever affording. Luxury it seems has more respect for their merchandise than for people”.

3.4 Health and Safety Risks Despite the price tags for luxury brand goods, the conditions across their supply chains can be just as bad as those found in producing for fast-fashion retailers. Many factory workers are forced to work long hours in unsafe environments and do not have access to healthcare or paid leaves. In 2013, the deadliest garment industry disaster in history, the Rana Plaza factory collapse, had killed more than a thousand Bangladeshi workers. Their products were destined for Dior and Saint Laurent, among other luxury names. In India, several dozen Indian artisans were subcontracted for international designers and hunched over yards of fabric, using needles to embroider garments for the world’s most powerful fashion brands without any health benefits. They worked in a multiroom factory with caged windows and no emergency exit, and when night fell, some slept on the floor.

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Rana Plaza Building Collapse in Dhaka (Rahman, Rahman, Murad Billah & Ahmed, 2015)

Besides, A lot of apparel is made from cotton cultivated using pesticides. Pesticide harm is not limited to causing air, water, and soil pollution. They are also dangerous to people causing depression, seizures, headaches, or loss of consciousness. Thus, the unregulated use of pesticides is regarded as hazardous and unethical practice. In addition, chemical compounds (e.g., Lead, nickel, chromium, arylamines) used to treat and soften textiles can cause skin diseases.

3.5 Environmental Deprivation The fashion industry has its part of the blame for the effect of human activities on the environment. The fashion industry causes an environmental burden, especially through the large volume of waste it generates, the use of pesticides in producing cotton which is one of the most versatile fibers used in clothing, the extinction of certain species, global warming, and changes in the ecosystem. In addition to water pollution, considerable environmental damage is observed including soil erosion and the emission of nitrogen peroxide, a greenhouse gas. According to Kering environmental studies, 75% of the luxury industry’s environmental impact is generated at the start of the supply chain, with 50% of the impacts being associated with raw materials production. An additional 25% of its impacts are associated with processing raw materials (including leather, metals, and textile spinning). Louis Vuitton is particularly guilty of such practices, as their production of products is currently not regulated by any policy to create more sustainable practices. Furthermore, many luxury companies promise “life-long” products. However, life-long is a claim that is often not met due to ever-changing designs and new trends. The constant rotations of new trends and products have a huge environmental

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impact. Studies show that the environmental impact of luxury brands is actually just as damaging as that of fast-fashion companies making it a major concern to the luxury clothing industry [38]. Yet, many fashion brands don’t support environmental protection and animal rights as much as they should and have not published any concrete sustainability agendas. While consumers are becoming increasingly aware of the environmental degradation that can be associated with designer diamonds or leather handbags.

3.6 Animal Cruelty Despite recent commitments from the luxury fashion industry to reduce its environmental footprint, a report has revealed that luxury fashion brands are among the worst in the industry for animal welfare, driven by their continued use of fur and exotic materials like animal leather, teeth, bones, and furs. The fabrication of many kinds of luxury clothing such as shoes, belts, and other accessories requires killing various wild animals. The animals are killed using very merciless methods. Their numbers have also decreased in the forest. Some animals are near extinction because of immoderate killing. This behavior is extremely harmful to global biodiversity. Such use of animal skins and other materials strongly undermines any claims of sustainable production that luxury brands like Gucci and Chanel make. According to Four Paws, a global animal welfare organization report (2021), Stella McCartney achieved the highest score (90%) in welfare commitment, and the luxury sector fared the worst score (23%) even lower than fast fashion (53%). The report found that seven luxury brands, including Hermès, Prada, LVMH-owned Fendi, Louis Vuitton, and Dior received a score of 0% [53].

“Australian farm to hold 50,000 crocodiles for luxury Hermès goods questioned by animal welfare groups” (Photograph by Jessica Marszalek [46]

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4 Sustainable Luxury is the Solution Luxury fashion brands are known for their high quality, authentic value, prestigious image, uniqueness, and premium prices. In addition, luxury brands give their customers the ability to signify high-end wealth levels, social status, and stylishness that gives them the pride and self-confidence that in the end influence consumption. Yet, luxury brands face stiff competition from low-quality fake products, which impacts their reputation and necessitates the use of protective measures against such products. Failing to do so could deter customers from making future purchases, harming not only the specific product but also the overall brand [54]. The success of the luxury fashion industry primarily depends on protecting brand value, preserving quality/authenticity, and maintaining efficient supply chains [9]. This goal can be achieved by moving toward authentic luxury brands that position sustainability at their core. Sustainable luxury is defined as beautiful, high-quality, durable goods that reflect their respect for the environment and for the workers who manufacture these products [34]. The nature of luxury products in terms of scarcity, premium pricing, selective distribution channels, production of limited editions, timelessness, and durability suggest luxury synergy with sustainability, in particular, endurance through the generations and wise use of resources. However, a key question here is whether issues concerning animal welfare, natural resources (e.g., animal skins, fur), and workers’ rights disrupt this ‘balance’ between sustainability and luxury. The luxury sector started recognizing its responsibilities and opportunities to encourage sustainability in sourcing, manufacturing, and marketing [41]. Sustainable luxury brands are recognized for their emphasis on (1) transparency regarding their sustainable goals, (2) preservation of natural resources and animal welfare, (3) respect for human rights and social responsibility, (4) sustainable packaging and transport, (5) promotion of the product’s 2nd life through repair and recycling, (6) waste reduction (e.g., CO2 emissions), (7) production following the circular economy. Examples of luxury brands’ sustainable practices [16, 17, 23, 25, 34] include but are not limited to:

4.1 Sustainable Sourcing and Production Chanel is a sustainable luxury brand dedicated to the research of innovative alternative materials. The brand’s “Sulapac” startup produces biodegradable plastic alternatives and non-toxic silk alternatives. Chanel has invested in Evolved by Nature to develop sustainable silk from silkworm cocoons, which can be used in fabrics, cosmetics, and medical products. The iconic fashion house also introduced its own climate strategy in March 2020, the CHANEL Mission 1,5° commitment to reduce the CO2 footprint by using green energy, supporting reforestation, and local farmers.

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Chanel has co-developed a biobased bottle cap for one of its perfume collections with Finnish startup Sulapac, made from a blend of renewable materials including wood chips [13]

● Prada, Hugo Boss, and Dolce and Gabbana are collaborating with the “EuroMediterranean textile cluster” for manufacturing their products which offer a guarantee of standards above and beyond those of “Made in Asia”. ● Chopard and Cartier jewelry is made from sustainable gold extracted according to rigorous standards in terms of environmental protection and the economic and social development of mining communities. ● Paul Smith, Hugo Boss, and Tommy Hilfiger have launched sneakers made partly from plant-based material. In the same line, Salvatore Ferragamo has used silk-like twill fabric derived from the leftovers of citrus juice in some of its collections. ● Moncler is committed to fighting global warming and protecting the oceans. Hence, the brand is now reaffirming its sustainability goals: climate measures such as the promotion of CO2 neutrality and the conversion to renewable energies are being implemented. The brand also operates a mandatory supplier code of conduct that sets various standards and requires full transparency for material sourcing and manufacturing. ● Armani applies a chemical test management system that enables real-time tracking of hazardous chemicals. The company has also devised a restricted substance list for use by all members of its supply chain.

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4.2 Product Recycling ● Burberry became a core partner of the “Make Fashion Circular” initiative and has its ReBurberry collection which includes 26 sustainable garments made from environmentally friendly materials such as ECONYL®, bio-acetate, bio-nylon, and recycled polyester. Besides, the brand donates its slow-moving goods rather than burning them as it used to do. ● Balenciaga launched the 2020 collection, which included 90% recycled, upcycled, or certified-sustainable materials. ● Prada is very committed to the use of recycled materials (e.g., Parada bag silhouettes made of regenerated nylon ECONLY) and has its policies for using renewable energy sources and reducing waste. ● Cartier offers repair for their creations to ensure durability and extend the product life cycle. Furthermore, 90% of the brand’s gold creations are recycled.

ReBurry and Prada Re-Nylon items executed in Econyl fiber (innvovationintextiles.com, 2019; [18]

4.3 Animal Welfare Initiatives ● Stella McCartney was the first luxury house to label itself’vegan’ since it did not use leathers, fur, or skins. Its latest launch is the world’s first-ever vegan garments, made from lab-grown Mylo mushroom leather, a sustainable alternative to leather. ● Hermès announced a new edition of its 1997 Victoria travel bag, a classic bag of the luxury house, originally crafted from calfskin and lined in canvas. This reissue will be primarily made using lab-grown mycelium. This material is a new generation of biotech materials made by combining agricultural waste and mycelium to form a sheet that can be tanned just like real leather. ● Gucci, Chanel, Giorgio Armani, Versace, Tommy Hilfiger, and Ralph Lauren have also become “fur-free” and are no longer using fox, mink, rabbit, sheep, or raccoon fur.

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“After two years of in-house research and development, luxury fashion brand Gucci unveiled three new vegan leather sneakers made from animal-free material known as Demetra” (Asia 2021; [27]

4.4 Labor Rights Augmentation ● Louis Vuitton, Fendi, Christian Dior, ad Givenchy, owned by LVMH, are part of the French Task Force initiative to incorporate gender equality. ● Gucci has signed the UN Business Conduct Standards to tackle discrimination against LGBTI people and was the first luxury brand to appoint a Global Head of diversity, inclusion, and equality. ● Chanel and Michael Kors operate Gender Pay Gap Reporting procedures that track average pay differential between genders across all roles. ● Ralph Lauren has a plan to increase the proportion of female employees by 25% by 2025. ● Gucci, Balenciaga, Saint Laurent, and Bottega Veneta, owned by Kering, will only hire models who are at least 18 years old. ● Moncler’s Supplier Code of Conduct forbids its suppliers from employing anyone below the legal age of the country concerned.

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“Chanel Gender Pay Gap” (Chanel Gender Pay Gap Report 2017/18)

“BC Transaction Process” (nvestopedia.com)

Such initiatives show that sustainable practices are not just marketing and communication promises, known as “greenwashing.” The sustainable dimension is now a part of the emotional experience of buying and wearing luxury products. The luxury industry can serve as an example of best practices for the whole fashion industry.

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Luxury brands can increase awareness and drive change in the entire fashion sector through their influence, famous brands, star creators, and multinational luxury groups. They can also benefit from communicating and reporting sustainable implications to protect brands’ value. Nevertheless, sustainable goods are continually challenging the brand strategies of luxury companies.

5 Blockchain Technology for a Sustainable Luxury Image Despite the luxury industry’s struggles with sustainability (primarily those regarding materials, supply chains, and transparency), many companies are starting to shift toward more socially responsible ways of doing business. Additionally, consumers are becoming increasingly aware of the environmental degradation that can be associated with designer diamonds or leather handbags [7]. Numerous businesses regularly reply to public concerns by showing their corporate social duty in numerous methods like being green or selecting a certain issue in which they decide to show their responsibility (e.g., not being involved in child labor or underpaid wages throughout the production process). Nonetheless, some brands claim eco-friendly practices, but they repeatedly fail to follow their claims. For example, Chanel claims they are using leather that supposedly is “a byproduct of the food industry,” however, this is not certain. Hermès has claimed to support sustainable concerns (such as protecting endangered species) yet there exists no data or facts showing what Hermès has actually done. Many brands exhibit minimal substance to the claims that are shown on their websites and in publicity campaigns. Rolex also relies on its own label of longlasting luxury to shade the fact that they have not published any concrete sustainability agendas, key performance indicators, goals, or targets. The publication of such facts is essential to improving global corporate accountability and transparency. Otherwise, ethical problems in the fashion industry will keep causing many debates.

5.1 Luxury Supply Chain Sustainability A luxury supply chain involves the interconnectivity of various organizational players and activities for the transformation of raw materials into finished products or services as well as the movement of goods from suppliers to final consumers, which reduces the visibility and reliability of the network. The globalization of businesses is coupled with the proliferation of actors in the supply chain. This reduces transparency among the network of actors. Thus, there is a risk of ignoring sustainability concerns in business operations which could be costly for supply chain actors. Moreover, the

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communications that stem from firms are sometimes different from their actual practices. The unethical conduct of one stakeholder not only affects the erring organization but also has a contagion effect on other firms operating in the supply chain network [22]. However, the increased attention from customers mounts growing pressure on businesses to improve their sustainability and social responsibility. Therefore, social responsibility and environmental sustainability are non-negotiable for firms as individual entities and as part of a supply chain network. Since the action of one supply chain partner affects other partnering entities, businesses must keep the supply chain in focus while pursuing sustainability objectives. Businesses need to consider environmental sustainability and ethical standards, particularly regarding the individual actions of their supply chain partners [40]. Ideally, organizations in the same supply chain network depend on one another for sustainability as the value created by one is also enjoyed by all the partners. It is thus necessary for organizations to monitor their responsibility and ethical conduct as well as those of the other firms in their supply chain. This is particularly true of the luxury fashion industry, in which traceability and end-to-end visibility are crucial [8].

5.2 Blockchain Technology (BCT) for Sustainable Supply Chains Luxury brands lack long-term relationships with their raw materials suppliers, are not fully in charge of their production processes, and are unaware of all the transactions, reinforcing the opacity of their overall ecosystem. BCT offers a good solution to develop and maintain a responsible brand image. That is very critical to this field of business. BCT is a form of data storage in chronologically arranged blocks that are inseparably connected to each other. The data within the blocks cannot be changed without destroying the blockchain (BC) as synchronized across a network of actors. The desired change is executed in the form of a transaction in a new block that requires the consent of the other partners in the chain. Thus, a BC is a constantly growing chain of data blocks that are cryptographically linked to each other. BC is designed to be storable in a decentralized manner while functioning without a central controlling system as the networks are connected in a peer-to-peer system in which there must be universal agreement among partners before a transaction can be validated. Agreements are written in digital nodes (known as smart contracts). This makes BC transparent establishing a high level of trust in the data set. Although the publication of the firm’s responsible conduct to stakeholders better informs the latter of the firm’s commitment to the pursuit of sustainability, increases trust, and strengthens relational ties, in the long run [40], using BCT can enhance responsible management practices by integrating it into supply chain processes. Managers can leverage the BCT to inform customers and stakeholders about their

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responsible conduct with credibility. The great quantity of supply chain information that can be obtained and stored via BCT may represent a powerful asset for those companies that focus on sustainable products. Luxury fashion brands could gain authenticity by sharing the data concerning their sourcing and production processes. Indeed, by carrying out these transparency-led actions any brand would benefit in the eyes of the public opinion, gaining more legitimacy for their sustainability storytelling.

“LVMH, Consensys and Microsoft visionary supply chain with AURA Blockchain” [10]

The BCT value proposition in supply chain management (SCM) can be summarized as (a) creating transparency and trust for the customer, (2) simplifying the tracking process due to disintermediation, (3) reducing costs and errors, (4) minimizing inventory, (5) reducing delays, and (5) identifying problems faster [6]. However, essential considerations should be made before deciding to engage blockchain in supply chain management as the information varies according to the type of blockchain used, while the legitimacy of its content depends on the integrity of the company feeding data into the blockchain. In addition to persistency, validity, and anonymity, blockchain principles include transparency, traceability, trackability, authentication, tradability, and authentication that emphasize trustworthiness and credibility [15].

5.2.1

Transparency and Visibility

Since the evolution of Eco-fashion in the period between 2006–2008 and the constant pressure on fashion brands to be transparent in their practices, new businesses started building their brand image as ethical firms in their all operations while existing businesses and incorporated principles of eco-fashion into their operations. In sustainable luxury, sustainability should be integrated into all aspects of the firm. Sustainable luxury brands need to report firms’ responsibility in a transparent way including all the associated firms in the supply chain that must be also driven to maintain sustainable standards. Sustainability reporting allows companies and business leaders to identify the risks associated with social and environmental changes and establish

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systems to manage these risks to create long-term brand value. Transparent reporting brings sustainability as a core business strategy and educates all the stakeholders on sustainable practices. Sustainable reporting has become a mainstream business activity for companies consisting of qualitative and quantitative information. Sustainable practices can be reported through Websites, Stand-alone reports, and annual reports that might involve supply chain standards, social, environmental, and economic to communicate the organization’s progress. It is observed that increasingly more and more fashion brands are reporting sustainable practices using variable indicators (i.e., economic, social, and environmental) as conventional criteria of sustainable practices. However, fashion supply chains are globally dispersed raising issues related to transparency. So, apparel brands have to undertake sustainable initiatives to cover the entire supply chain, including the process of sourcing, production, distribution, retail, marketing, use, re-cycle, and final disposal [45]. For instance, Everledger, a BCT-based platform, creates a unique digital identity for every product, surfaces the lifetime journey of luxury goods, and provides transparency into fair working conditions and ethical sourcing of raw materials. Each product has its ownership registered on a private blockchain, where every transaction is securely recorded and accessible to end consumers. Chow Tai Fook Jewelery Group and the GIA approached Everledger to design a solution that would deliver secure, digital diamond grading reports on the blockchain in response to customer demand for transparency. Customers of the luxury brand now receive a permanent and immutable blockchain record of their diamond’s GIA grading information, giving them additional assurance and transparency of their diamond grading and traceability information which adds a new dimension to their customers’ experience of owning a diamond [49]. Likewise, Provenance, a blockchain platform, provides supply chain details through in-store QR codes or e-commerce product pages. The platform shares details about the workers who hand-make the products that can be communicated on the brand’s e-commerce product pages which are expected to boost customers’ engagement [35]. In the complex fashion supply chain, a product may contain several supplies (e.g., cotton fabrics, polyester threads, and plastic buttons) from a different country and transported in bulk by sea. That is then cut and sewn in another country, packaged somewhere else, and then sold in Europe. Thus, understanding the true provenance of materials and components is becoming increasingly difficult. The lack of visibility through the supply chain translates into business risk, especially now that consumers are demanding higher standards in terms of worker rights, fair pay, and ethical sourcing. Everledger blockchain provides a high level of transparency in terms of sustainable business practices of the complex fashion supply chain [49].

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“The Provenance platform provides supply chain details through in-store QR codes or e-commerce product pages” [35]

5.2.2

Traceability and Trackability

Due to market globalization and after the COVID-19 pandemic digital consumption has drastically increased. Thus, luxury brands need to establish trusted supply chain networks to protect their partnerships with stakeholders and secure international transactions. Luxury firms are considerably challenged by the complexity of their supply chains making it difficult to trace the components used in their production processes especially since they constantly deal with numerous third parties [6]. Product traceability can track all stages of production and commercialization, from raw material extraction to the delivery of finished goods which increases certainty about the origin of the product. Customers can verify the source materials used for manufacturing such as cashmere or high-value leather. Additionally, trackability through the different stages of the supply chain (e.g., storage conditions, such as temperature and humidity). This enables subsequent control and thus increases trust in the product, strengthens customers’ confidence in the firm’s ethical practices, and reduces financial, psychological risk, and social risks associated with inadequate products. As discussed by [6], blockchain-based traceability and trackability are safer, more transparent, and efficient since all transactions are recorded in separate blocks and stored in multiple identical copies within the blockchain, reducing the chances of data tampering or deletion and improving the verification of information exchange in permanent and unalterable ways. Blockchains improve the accessibility of data for all stakeholders (retailers, suppliers, manufacturers, and customers) while ensuring data privacy making them very useful to supply chains.

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“Blockchain platforms enable the company to easily track individual products, even parts, along with the journey from the supplier to the customer” [21]

Gucci has pioneered the adoption of sustainable practices in the luxury industry. The Italian brand started developing products that respect the environment in 2010, with a 100% traceable handbag collection, recyclable packaging, and eyewear made from castor-oil seeds. With blockchain, brands can capture specific data points, such as sustainability certifications and claims, and provide open access to this data publicly. For instance, Provenance, a public open-source blockchain, attaches a unique digital token to each physical product. The tokens are a unique ‘fingerprint’, an authentication mechanism that provides a safe digital channel of information across the value chain. All the parties involved in the production of that very piece (i.e., farmers, designers, manufacturers) up to the final customer, are tracked. Such initiatives decrease the high level of opacity characterizing the supply chain of many fashion luxury brands and would lead to a higher shared value both for brands, which will gain in reputation and trust of their customer base, and all their stakeholders [21].

5.2.3

Authentication and Certification

With the evolution of online luxury purchases, and to increase consumers’ trust in luxury goods, some luxury platforms have focused on the adoption of blockchain technology to provide electronic certificates for consumers (Li, Fan, & Wu, 2021). Although the blockchain-based authentication is high in cost compared to the conventional manual practice (i.e., third-party authentication institution employed to authenticate luxury goods and provide a paper certificate for the consumer according to the authentication results), the BC authentication system provides the history of a product, tracking of the raw materials, and all the information in the processes of the production and circulation to the sale of the product.

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Through BCT, all transactions are certified. This requires stakeholders to agree on getting their data registered and certified within the blockchain. All records can be viewed by authentication institution(s) in order to provide accurate certificates. The certificate cannot be altered. Consumers can also conveniently scan the luxury product QR code to obtain authentication information through the stored product’s digital identity without the need for third-party authentication [4]. For luxury brands, blockchain can act as an official keeper by enabling unfailing traceability and recording throughout the entire product’s journey. In 2019, LVMH has teamed up with Prada and Richemont to announce the launch of AURA, a blockchain-based platform for authenticating luxury goods secured by ConsenSys technology and Microsoft. Each luxury product is given a unique identifier to access its online certificate. Luxury goods are tracked and traced from raw materials to the point of sale, to secondhand markets to assure consumers of product history and proof of authenticity [12]. As more affluent consumers tune in to the sustainability conversation, the entire product’s timeline will become part of the purchase consumer journey, and every step of the product’s life cycle is registered, enabling new and transparent storytelling [5]. Another example of using blockchain-based authentication is Everledger partnership with Gübelin Gem Lab (the world’s leading gemological laboratory for examining and determining the authenticity of precious stones) and Gemological Institute of America (GIA - the largest gem lab in the world). Through the blockchain technology of this platform, it’s now possible to evidence a stone’s birthplace and trace its journey across the value chain and provide grading reports for the stones, including details about the color, clarity, shape and carat weight, which ultimately inform the value of each diamond [49].

provenanceproof.com

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Tradability

The rising demand for secondhand luxury goods is one of the key emerging trends. The market for secondhand luxury goods isn’t new, but it is now in the spotlight as it becomes one of the fastest-growing luxury trends. Even celebrities, like The Kardashians, are openly endorsing pre-owned luxury goods [5]. According to Bain & Company (2022), the global secondhand luxury goods market grew to e33 billion in 2021. Extending the lifetime of luxury products is a powerful way for brands, fashion platforms, and investors to show their commitment to sustainability. Luxury products are high in quality and constructed to be repaired and worn over and over again, which naturally lends such products to resale. Extending the lifespan of luxury products and keeping them in use for longer adds a sustainable value for the products. Thus, secondhand sales offer an additional distribution channel that’s gaining share within the larger luxury ecosystem. The network-based nature of secondhand luxury retail is another plus [5, 14]. BCT enables customers to retain all the essential information about their assets, making it easier to purchase, hold, exchange and trade the asset at any time anywhere. BCT allows secondhand luxury market customers to view all information about the purchased product and ensure that the resold items are valued and priced properly [33]. The AURA blockchain offers control of the secondhand luxury market. With the Aura Blockchain, the big luxury houses link with each owner and, potentially, communicate with them. So, the manufacturers know who the new owners are and can communicate directly with them. Moreover, new customers can get blockchain certificates and identify themselves to manufacturers [48].

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“Vacheron Constantin proposes a mobile app that allows each watch to be recorded and tracked using blockchain.” [48]

”Aura’s app scanning a Hublot watch” [24]

In light of the exponential growth third-party sites were seeing, ENCORE, a resale platform launched in November 2021, gives consumers the option to purchase vintage Oscar de la Renta runway designs, from Oscar de la Renta. It has allowed the luxury label to exercise full brand control online and take back ownership of the brand’s items long after they were initially purchased. Plus, through a rigorous authentication and restoration process, the brand would be able to ensure that attire sees a new life. Encore was made possible by a partnership between Oscar de la Renta and Archive, a full-service resale company founded in 2020, that allows brands “take back ownership” of the secondhand market by owning the program and the customer data [11]. LUXIFY, the social venture arm of the Lane Crawford Joyce Group (LCJG), Asia’s premier fashion retail and brand management group, is another marketplace for luxury goods leveraging blockchain technology to verify the authenticity and traceability of secondhand luxury items. LUXIFY enables users to track the origin and prove the authenticity of luxury items in their vetted network of re-sellers (Espeo [19].

5.3 Promising Benefits of Blockchain for the Luxury Fashion Sector 5.3.1

Customer Experience Enhancement

Sustainability is no more an optional requirement for brands all over the world, it is almost an absolute necessity, especially after the COVID pandemic. According to Nielsen reports, 66% of global consumers millennials are willing to pay more for sustainable goods. Therefore, luxury manufacturers and retailers are using

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blockchain technology to redefine luxury and customer experience and allow consumers to view information about the location of sourcing the products. This new approach could facilitate a radically positive transformation of customer experience with luxury goods. By simply scanning the item’s QR code, customers are presented with background information such as ownership, places of use, and the environmental impact associated with the purchase. The code also includes handwritten digital notes from the original owners of concerning items [12] 101 [1]. The involvement of blockchain for luxury goods can also enhance customers’ trust as luxury brands digitalize, track, and trace the whole lifecycle of a luxury good. The transparency in the supply chain, especially regarding sustainability claims and certifications, could offer better improvements in customer trust scores that improve client experiences and drive their purchasing decisions (101 [1]).

5.3.2

Luxury Loyalty Programs Development

With 80% of luxury sales today being “digitally influenced” from across the globe, blockchain can offer the benefit of seamless global transactions enabling customers to adopt a global lifestyle with luxury goods. The opportunity of exchanging data in the blockchain database permits members of specific communities access to the shared, real-time record of truth about specific facts or transactions with blockchain. New customers can also reach out to old owners allowing luxury shoppers to transact with various partners outside of the brands [12]. At the same time, customers’ private data is not conceded and doesn’t reside in any single location within the decentralized blockchain. Furthermore, blockchain allows reward programs to operate similarly to a cash-back program, where the currency is stored in a digital wallet and redeemable at any point avoiding the short expiration dates of benefits that is the main reason customers opt out of loyalty programs. As well, blockchain creates a multi-channel network making it easier to redeem earned rewards [32]. BCT can also serve as a customer service channel through which the brand and the customer can communicate. A brand can share information and the customer can submit a customer service request, which would be documented on the item’s record. Such flexible transparent data exchange presents an entirely new approach for loyalty programs [12].

5.3.3

Risk and Cost Reduction

The best use of blockchain in the luxury goods sector can enable improved data management and cost-efficiency. Presently, blockchain is the trustworthy technology for information exchanges where trust is the most important requirement. Through blockchain, it is possible to easily capture critical information about products while sharing it securely throughout business lines, partners, and operations. Also, the facility of improving luxury supply chain management with blockchain could also

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help in saving costs through Just-In-Time inventory management solutions and data integration throughout operations. Furthermore, the use of QR codes and photography helps in creating digital representatives or twins of physical assets on the blockchain. Therefore, brands could easily resolve the concerns of counterfeit products by tracking products digitally across the supply chain as well as after the sale. The blockchain helps in tracking data easily and carrying out real-time transactions without compromising the safety and integrity of any sensitive information (101 [1]).

5.3.4

Workers Welfare Evaluation

Through blockchain platforms, companies can collect data on their workers’ wellbeing. Since some employees might be hesitant to share personal health details and speak out about direct managers, the anonymity of blockchain is “critical”. This practice was implemented by Levi Strauss & Co began testing a worker well-being survey that records factory employees’ answers anonymously on a blockchain platform. The results from one survey were processed within 48 h of its completion, and three other sets of responses were processed in less than a week. “This is groundbreaking transparency”, says Eileen McNeely, director of SHINE at the Harvard T.H. Chan School of Public Health, which worked on the project. Extending this practice to luxury brands will be enormously beneficial in terms of showcasing sustainable practices and increasing brand value.

“Value Proposition Assessment of BCT for Luxury” [6]

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5.4 Challenges of Adopting Blockchain to Luxury Fashion Brands While adopting blockchain can benefit luxury fashion brands, it also presents many challenges; (1) There is a variety of blockchain protocols and systems, each with its own rules and standards, competing for popular adoption in the fashion industry. Without standardization or cooperation between key players, the fashion industry’s adoption of blockchain-based technologies can result in a variety of incompatible, isolated systems with inadequate reach or benefit. (2) In the pursuit of efficient standards, Blockchain Consortiums must share sensitive and confidential information between members/competitors, address standard-essential IP, and tackle potential antitrust concerns. (3) The adoption of blockchain is not cheap, and this makes it unfeasible for many smaller brands and retailers. (4) Blockchain technology is generalized to be inherently an energy-intensive nature of the technology which raises concerns about the perceived environmental impact of blockchain technology and inhibits the future commitment of blockchain [55].

6 Conclusion The digital age, global pandemic, the complexity of luxury supply chains, and the increasing number of reports in recent years of unethical practices, have made it quite difficult to inspect products before payment putting the fashion and luxury industry under intense scrutiny. Transparency and sustainability are the hottest topics in the fashion world. Therefore, trust is considered one of the most important factors in consumer purchasing decisions. Consequently, luxury companies are increasingly changing their approach and mindset to align with consumers’ demands and new regulatory requirements. Luxury brands are now focusing more on sustainability in the design and production of luxury goods, and at the same time are accelerating the adoption of digital solutions to engage with consumers and deliver luxury shopping experiences using technology [17]. The jump into the digital world has been faster than expected, and the aim of companies now is to refine the solutions already implemented and develop new digital solutions. This has led luxury brands to consider new identification methods that can handle the challenges presented by the sale of their goods. In order to monitor what materials end up in finished products, and where and under what conditions the raw materials are sourced and products made, luxury brands and retailers are turning to blockchain technologies. BCT represents the ownership of a digital (cryptographic) item or asset that cannot be replaced with something else thus the brands become the unique owner of the digital asset. Through BCT all transactions are recorded and tracked [17]. Transparency and traceability in the supply chain assure that final products follow the best practices and present opportunities for broadening the scope for sustainable

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and ethical practices in the production and consumption of luxury goods [55]. At the same time, blockchain can help in diving deeper into the origins and manufacturing of the product. The global counterfeit goods market is growing faster than ever, and customers are unsure about purchasing luxury goods. No one wants to invest a huge amount of money only to land up with fake products. The evolution of blockchain has empowered customers to verify the authenticity of products with ease (101 [1]. Thus, blockchains can be effectively integrated into the existing practices of fashion brands of various sizes to guarantee authenticity and traceability and to transparently demonstrate the brand’s supply chain to assure consumers of ethical and sustainable sourcing. This transparency is significant for the secondhand market too and reduces risks of fraud and theft in global supply chains. However, brands should remain aware of the potential risks and legal pitfalls inherent in these solutions, and continue to deploy multi-directional, real-world strategies including implementing effective supply chain controls, maintaining strong IP protections, developing robust online monitoring programs, and collaborating with administration authorities to identify and prosecute counterfeiters. This level of transparency is good for everyone as it ensures the integrity of products [28, 55].

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10. Cellini, A. (2019). LVMH, Consensys and Microsoft: visionary supply chain with Blockchain. Crypto Infos. Retrieved May 10, 2022, from https://cryptoinfos.eu/lvmh-consensys-microsoftsupply-chain-with-blockchain/ 11. Cheng, A. (2022). Luxury Brands Are (Finally) Tapping into Resale — What Does That Mean for the Secondhand Market? Fashionista. Retrieved April 25, 2022, from https://fashionista. com/2022/02/luxury-brands-clothes-resale-secondhand-market 12. ConsenSys. (2022). Retail Fashion and Luxury. Retrieved April 22, 2022, from https://consen sys.net/blockchain-use-cases/retail-fashion-and-luxury/ 13. Culliney, K. (2021). Sustainable, functional, beautiful: Chanel unveils biobased perfume cap. Retrieved May 9, 2022, from https://www.cosmeticsdesign-europe.com/Article/2021/10/ 14/Chanel-rolls-out-biobased-lids-across-Les-Eaux-de-Chanel-perfume-collection-co-develo ped-with-Sulapac 14. D’Arpizio, C., & Levato, F. (2022). Secondhand Luxury Goods: A First-Rate Strategic Opportunity. Bain & Company. Retrieved April 20, 2022, from https://www.bain.com/insights/sec ondhand-luxury-goods-a-first-rate-strategic-opportunity-snap-chart/ 15. de Boissieu E, Kondrateva G, Baudier P, Ammi C (2021) The use of blockchain in the luxury industry: supply chains and the traceability of goods. J Enterp Inf Manag 34(5):1318–1338. https://doi.org/10.1108/jeim-11-2020-0471 16. Deloitte. (2020). Global Powers of Luxury Goods 2020. The new age of fashion and luxury. Retrieved 26 April 2022, from https://www2.deloitte.com/content/dam/Deloitte/at/Docume nts/consumer-business/at-global-powers-of-luxury-goods-2021.pdf 17. Deloitte. (2021). Global Powers of Luxury Goods 2021. Breakthrough luxury. Retrieved 26 April 2022, from https://www2.deloitte.com/content/dam/Deloitte/at/Documents/consumerbusiness/at-global-powers-of-luxury-goods-2021.pdf 18. Enke, A. (2021). Burberry’s ECONYL-Based ReBURBERRY Edit Collection + “Positive Attributes” Labeling. Anne of Carversville. https://anneofcarversville.com/eye/2020/5/25/bur berrys-econyl-based-reburberry-edit-collection-positive-attributes-labeling 19. Espeo Blockchain. Luxtrack - Case study: Luxury blockchain. Retrieved April 25, 2022, from https://espeoblockchain.com/blockchain-portfolio/luxtrack-case-study-luxury-blockchain 20. Euronews. (2022). Dyeing for fashion: Why the clothes industry is causing 20% of water pollution. Retrieved May 9, 2022, from https://www.euronews.com/green/2022/02/26/dyeingfor-fashion-why-the-fashion-industry-is-causing-20-of-water-pollution 21. Filocamo, M. (2021). Blockchain tech for Fashion and Luxury: a future revolution? Fashion Technology Accelerator. Retrieved April 26, 2022, from https://www.ftaccelerator.it/blog/blo ckchain-technology-future-fashion/ 22. Gong S, Tcydenova E, Jo J, Lee Y, Park JH (2019) Blockchain-based secure device management framework for an internet of things network in a smart city. Sustainability 11(14):3889 23. Hausvoneden.Com. (2022). Sustainable luxury brands pioneering positive change. Retrieved April 25, 2022, from https://www.hausvoneden.com/lifestyle/nachhaltige-luxusmarken-alsvorreiter-positiven-wandels/ 24. Hellmich, P. J. P. (2021). Blockchain to ameliorate the luxury experience. Retrieved May 10, 2022, from https://en.blockchain-founders.io/news/blockchain-to-ameliorate-the-luxuryexperience 25. Hoskins, T. (2017). Luxury brands: higher standards or just a higher mark-up? The Guardian. Retrieved April 24, 2022, from https://www.theguardian.com/sustainable-business/2014/dec/ 10/luxury-brands-behind-gloss-same-dirt-ethics-production 26. Innivationintextiles.com (2019). Prada launches Re-Nylon project with Econyl. Retrieved May 8, 2022, from https://www.innovationintextiles.com/protective/prada-launches-renylonproject-with-econyl/ 27. Joe, T. (2021). Gucci Launches Vegan Sneakers: Here’s Everything You Need to Know About Its New Leather. Green Queen. Retrieved May 10, 2022, from https://www.greenqueen.com. hk/gucci-vegan-leather-sneakers/ 28. Jutla, D. (2021). Will Blockchain Revolutionize the ‘Pre-Owned’ Luxury Market? Peer Ledger—The Responsible Supply Chain Company. Retrieved April 25, 2022, from https:// www.peerledger.com/blogs/will-blockchain-revolutionize-the-pre-owned-luxury-market

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29. Kenway, N. (2020). Fashion companies lack awareness and transparency on water pollution. ESG Clarity. Retrieved April 20, 2022, from https://esgclarity.com/fashion-companies-lackawareness-and-transparency-on-water-pollution/ 30. KnowTheChain. (2020). Benchmark. Retrieved April 20, 2022, from https://knowthechain. org/benchmark/?ranking_year=2020&ranking_sector=apparel-footwear 31. Li, G., Fan, Z. P., & Wu, X. Y. (2021). The Choice Strategy of Authentication Technology for Luxury E-Commerce Platforms in the Blockchain Era. IEEE Transactions on Engineering Management. 32. Ma, R. (2020, April 29). Improving Customer Retention And Loyalty Programs With Blockchain. Forbes. Retrieved May 10, 2022, from https://www.forbes.com/sites/forbestec hcouncil/2020/04/29/improving-customer-retention-and-loyalty-programs-with-blockchain/? sh=5bf8fc7bb27f 33. Maia, M. (2021). Understanding the power of blockchain in luxury fashion. LinkedIn. Retrieved April 25, 2022, from https://www.linkedin.com/pulse/understanding-power-blockchain-lux ury-fashion-maria-maia 34. Masters.Em-Lyon.Com. (2019). Ethical practices in the Luxury industry. emlyon business school. Retrieved April 24, 2022, from https://masters.em-lyon.com/en/ethical-practices-lux ury-industry-edge-core 35. McDowell, M. (2019). 6 ways blockchain is changing luxury. Vogue Business. Retrieved April 26, 2022, from https://www.voguebusiness.com/technology/6-ways-blockchain-changing-lux ury/amp 36. MilitarySpouse.com (2022). 5 Ethical Issues in the Fashion Industry. Retrieved 24 April 2022, from https://www.militaryspouse.com/spouse-101/fashion/5-ethical-issues-in-the-fashion-ind ustry/ 37. Moulds, J. (2022). Child labour in the fashion supply chain. Labs.Theguardian.Com. Retrieved April 24, 2022, from https://labs.theguardian.com/unicef-child-labour/ 38. Murat, A., & Lochard, C. (2011). Luxe et développement durable. Eyrolles. 39. Nytimes.com (2020). Luxury’s Hidden Indian Supply Chain. Retrieved 24 April 2022, from https://www.nytimes.com/2020/03/11/style/dior-saint-laurent-indian-labor-exploitation.html 40. Oguntegbe KF, Di Paola N, Vona R (2021) Blockchain technology, social capital and sustainable supply chain management. Sinergie Italian Journal of Management 39(3):163–188 41. Pencarelli T, Ali Taha V, Škerháková V, Valentiny T, Fedorko R (2019) Luxury Products and Sustainability Issues from the Perspective of Young Italian Consumers. Sustainability 12(1):245. https://doi.org/10.3390/su12010245 42. Petterson, A. (2021). Unethical Practices in the Fashion Industry and How to Counter Them. 440industries.com. Retrieved 24 April 2022, from https://440industries.com/unethical-practi ces-in-the-fashion-industry-and-how-to-counter-them/ 43. Provenanceproof.Com. (2020). The blockchain for coloured gemstones. Retrieved May 10, 2022, from https://www.provenanceproof.com/old-home 44. Rahman, M. & Rahman, Md. S. (2015). Dhaka for Future Generations: Our Action. 1st Edition, Chapter 8. p179–190. Publisher: Bangladesh Institute of Planners (BIP) and Centre for Development Communication (CDC). 45. Rahman, S., Yadlapalli, A. (2015). Sustainable Practices in Luxury Apparel Industry. In: Gardetti, M., Muthu, S. (eds) Handbook of Sustainable Luxury Textiles and Fashion. Environmental Footprints and Eco-design of Products and Processes. Springer, Singapore. 46. Readfearn, G. (2021). Australian farm to hold 50,000 crocodiles for luxury Hermès goods questioned by animal welfare groups. The Guardian. Retrieved May 9, 2022, from https://www.theguardian.com/environment/2020/nov/15/australian-farm-to-hold-50000crocodiles-for-luxury-hermes-goods-questioned-by-animal-welfare-groups 47. Schultz, K., Paton, E., & Jay, P. (2020). Luxury’s Hidden Indian Supply Chain. The New York Times. Retrieved May 9, 2022, from https://www.nytimes.com/2020/03/11/style/dior-saint-lau rent-indian-labor-exploitation.html 48. Schwab, P. (2021). Aura Blockchain: the real reasons behind the consortium [Analysis]. Market Research Consulting. https://www.intotheminds.com/blog/en/aura-blockchain-analysis/

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49. Scibetta, C. (2022). Blockchain Luxury Goods: everledger improving trust and sustainability. Everledger. Retrieved April 20, 2022, from https://everledger.io/blockchain-luxury-goods-hel ping-to-improve-trust-and-sustainability/ 50. Scott, M. (2022). Out of Fashion - The Hidden Cost Of Clothing Is A Water Pollution Crisis. Retrieved 24 April 2022, from https://www.forbes.com/sites/mikescott/2020/09/19/out-of-fas hionthe-hidden-cost-of-clothing-is-a-water-pollution-crisis/?sh=6ddf7891589c 51. Segran, E. (2022). Did a slave make your sneakers? The answer is: probably. FastCompany.com. Retrieved 24 April 2022, from https://www.fastcompany.com/90279693/did-a-slave-makeyour-sneakers-the-answer-is-probably 52. SustainYourStyle.org. (2022). Fashion & Environment. Retrieved 24 April 2022, from https://www.sustainyourstyle.org/en/whats-wrong-with-the-fashion-industry#:~:text=Fashio n’s%20Environmental%20Impacts-,Fashion’s%20Environmental%20Impacts,alternatives% 20to%20mitigate%20these%20problems 53. TheGuardian.com (2021). ‘Just never going to be OK’: report finds luxury brands falling behind on animal welfare. Retrieved 24 April 2022, from https://www.theguardian.com/fas hion/2021/dec/06/just-never-going-to-be-ok-report-finds-luxury-brands-falling-behind-onanimal-welfare#:~:text=Despite%20recent%20commitments%20from%20the,fur%20and% 20exotic%20animal%20skins. 54. Toledo C, Villas-Boas SB (2019) Safe or Not? Consumer Responses to Recalls with Traceability. Appl Econ Perspect Policy 41(3):519–541 55. Yang, C., Rodgers, F., Bonner, K., & Ray-Jones, M. (2021). Blockchain and NFTs are smart, but can they revolutionise the fashion industry? Sustainability and luxury pirates in the digital age. Multilaw.com. Retrieved April 25, 2022, from https://www.multilaw.com/Multilaw/Mul tilaw_News/Multilaw_News/Blockchain_fashion_article.aspx 56. Zilber, A. (2022). Prada and Fendi ‘use exploited factory workers to make their products’. Retrieved 24 April 2022, from https://www.dailymail.co.uk/news/article-6500211/Luxury-fas hion-brands-like-Prada-Fendi-use-exploited-factory-workers-make-products.html

DIGITAL HESITANCY: Examining the Organisational Mindset Required for the Adoption of Digitalised Textile Supply Chain Transparency Hilde Heim, Courtney Chrimes, and Christopher Green

Abstract Fashion firms are increasingly digitalising their supply chains (Majeed and Rupasinghe in Int J Suppl Chain Manag 6:25–40, 2017]) in response to demands for more accurate and verifiable supply chain transparency (Gualandris et al. in J Oper Manag 38:1–13, 2015; Unece 2021). However, beyond pilot schemes, few fashion industry stakeholders have fully implemented digitalised systems into their operations. This has several reasons including, cost, software maturity and digital mindset (Heim and Hopper in Int J Fash Des Technol Educ (Special Issue), 2021). Adjustment to the digitalisation of the supply chain represents significant changes in organisational culture and systems management. According to Davis et al. (in Manag Sci 35:982–1003, 1989), a prevalent issue in the process of digital transformation is the opposition to end user systems. To improve the industry’s ability to forecast, explain, and boost user acceptance of digital applications, a deeper understanding of why and how digital transformation occurs is required. This study examines the organisational mindset necessary for adopting digitalised textile supply chain transparency—based on the user experience measures of intention, attitudes, subjective norms, perceived usefulness and other characteristics. Through a qualitative approach, including primary data gathered from interviews with industry stakeholders, this study aims to identify the challenges facing the industry that have arisen alongside the emergence of digital technologies and seeks an explanation for adoption hesitancy. It finds that the investment in training, operational upheaval, and the lack of ‘digital mindset’ are some of the challenges yet to be overcome by firms. Importantly, the true globalisation of supply chain transparency is set to have a feasible future if digital transformation of the supply can be achieved.

H. Heim (B) · C. Chrimes · C. Green Manchester Metropolitan University, Manchester, UK e-mail: [email protected] C. Chrimes e-mail: [email protected] C. Green e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 S. S. Muthu (ed.), Blockchain Technologies in the Textile and Fashion Industry, Textile Science and Clothing Technology, https://doi.org/10.1007/978-981-19-6569-2_3

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Keywords Digital hesitancy · Organisational mindset · Digitalised textile supply chain transparency · Blockchain adoption

1 Introduction Verifiable transparency can advance sustainability by at least exposing, and at best eliminating poor practices at any point along the supply chain. Transparency allows insights and communication on various practices from raw fibre farming to textile processing, garment manufacture, fair work, distribution logistics, retail, garment use, garment care, reuse, resale and recycling. Efficient transparency mechanisms, including smart tagging, will facilitate the circular economy by permeating textile products with tangible, tradeable and verifiable value, substantiated by digital records, thus keeping garments in circulation for longer. In addition, emerging tracking and tracing technology facilitates the channelling of used textile products to the appropriate end of life processes rather than unnecessarily being destroyed or ending in a landfill. Finally, digitally enabled transparency will significantly assist supply chain stakeholders and fashion firms in fulfilling their extended producer responsibility requirements. Extended producer responsibility (EPR) places primary responsibility on the producer, importer and sometimes the seller of the product to manage the lifecycle and ultimately the waste treatment of the product. Retailers and brands are increasingly expected to be more open, accountable and vigilant. As a result, they must prioritise traceability and recognise that this will require resources and investment to start digging deeply into their supply chains. There must also be a fundamental shift within the network to prioritise and provide for fair wages, worker safety, and environmental protection [45].

Given the unsustainable practices in the fashion industry, including environmental and social harms, the current climate change emergency, and the United Nations Sustainability Development Goals (UNSDGs) agenda, keeping textile products in circulation for longer and within the most appropriate channels is imperative in the circular economy. However, supporting a circular economy has led to increased challenges for firms. Data reporting requirements have become more complex. Furthermore, common data ontologies and communication channels across sectors are required, as well as more streamlined modes of information exchange across areas formerly not well connected. The introduction of modulated fees or taxes for non-compliance could increase producer compliance costs, which is another challenge for enterprises. Reporting will need to be completed and aggregated for sales made as this is how anticipated waste will be calculated and monitored. Under an EPR system, fashion industry stakeholders are already considering how they will manage these impending requirements. Few systems currently exist that automate data collection and communication, and that are cost effective. Emerging digital technologies, including artificial intelligence (AI), virtual reality, blockchain, smart tagging and the Internet of Things (IoT), facilitate various fashion industry processes. Among these technologies, technology enabled transparency

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tools are attracting increasing attention in the fashion industry. Previously, many firms turned to certification agencies to verify their claims. However, the claims (often selfreported) have come under scrutiny and led to accusations of greenwashing [134]. Furthermore, proposed regulations and legislation, including EPR, will require more diligent action and record keeping on the part of producers. Therefore, an indisputable claims mechanism is required. The search for digitalised mechanisms that offer efficient supply chain transparency led to the enquiry in this study, which looks specifically at the development and deployment of blockchain technology. Blockchain has powerful attributes and numerous applications. However, blockchain is barely understood outside the tech world, although it has been claimed by Accenture, Deloitte, IBM and other technology authorities as potentially transformational in achieving best practice authentication [13, 103, 141]. Yet, its reception has been lukewarm in the fashion industry. The technology research and consulting firm Gartner explains this as a ‘normal’ phenomenon in the ‘hype cycle’ of technology adoption. Indeed, it appears that blockchain technology experienced a resurgence due to the effects of the COVID-19 pandemic, as well as technical advancements, thanks to solutions created via the growing number of pilot studies [8]. This study outlines a series of issues that impede the transformation to a digital supply chain. Building on the existing literature [124, 41], this chapter studies the adoption of technologies for supply chain transparency specific to coping with the embedding of technology in organisational contexts, assessing the effects of politics and culture on technology use, addressing implementation dynamics, and evaluating its effects. Within the context of industry 4.0 technological developments and the fashion supply chain, this study demonstrates that businesses should prioritise creative processes in order to adapt to change, and that research on technology transfer should prioritise context over content and process over prescription. This chapter will first outline the literature on blockchain, its advantages and integration and/or association with other technologies, and its current use in the industry followed by a discussion on digital transformation and the organisational mindset required—as seen from past studies. It will then ascertain that a new organisational mindset is required if digital transformation is to take place in the context of Industry 4.0 technologies. Next, it closely examines the experiences of smallscale fashion stakeholders in relation to supply chain transparency—and their current modes of documentation, reporting and communication. Attitude toward and demand for digital technologies are compared and contrasted. Finally, the study focuses on what is still required and how this might be achieved. Large, medium, small and micro enterprises The fashion industry is divided by economies of scale, that is, large-scale and small— with each sector generating its own ecosystem of operational dynamics. The majority of social and environmental damage is perpetrated by large-scale corporations [43, 101]. Notably, medium, small and micro businesses, led by independent fashion designers and/or entrepreneurs, comprise the largest number of enterprises in the clothing and textiles industry globally [1, 44, 126]. Following the common business

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acronym, ‘small to medium enterprise’ (SME), these firms are referred to in this study as small to medium fashion enterprises (SMFEs). Unlike large-scale conglomerates subject to the pecuniary interests of shareholders, SMFEs can draw on alternative value systems such as the triple bottom line (people, profit and planet) [39]. In this way, they contribute to the advancement of sustainable practice and therefore constitute the subjects chosen for this study. Small to medium fashion enterprises represent a microcosm of business management strategies including embracing systems change. While Luckman [80] shows they have proven their responsiveness in adopting disruptive business models, and in particular foregrounding sustainability principles, McRobbie [87] demonstrated how SMFEs are particularly vulnerable to turbulent and sudden market forces that in turn trigger quick and agile transformations. Small-scale enterprise success is important because if they prosper, SMFEs are likely to mobilise positive change more rapidly. However, Fry et al. [50] also note that SMFEs are expected to engage with business development and management for which they are not necessarily trained or which may not be expected of them in a large firm. Furthermore, digital technology and its implementation troubles many designers [22, 123]. Their ongoing survival and success is at risk through lack of knowledge, understanding and education in sectors other than their core fashion capabilities [38] and therefore critical for the present study. Together these principles and management factors offer a site for investigation as they may demonstrate how to mobilise positive change more rapidly, which could prove a vital contribution given the urgency of supply chain transparency in the context of the climate agenda. The challenge of facing more complex business modelling also suggests support is essential for SMFEs. Support may be found in the form of investment, affirmative government policy, mentoring, educational programs, constructive media/marketing stories, further innovations, as well as guidelines and frameworks on how to master these challenges. But first, a clear understanding of the dynamics of organisational cultural change is required to better understand the mechanics of digital transformation. Opportunities and challenges for the sustainable small-scale enterprise Fosso Wamba and Guthrie [49] note that one of several formulae to business success is attained through competitive advantage, including process and relational innovation. Competitive advantage can be derived from areas such as resources, values, systems innovations, technology adoption or a combination of these factors. Additionally, Todeschini et al. [133] observe that small firms starting with low-stakes technology at first can invest in more sophisticated technology to aid the firm’s scale-up later. However, some of the emerging 4.0 technologies—including blockchain would not be suitable for incremental adoption in their current state of development—which may also begin to explain the current reticence in uptake. Nonetheless, with the advent of emerging 4.0 technologies, including AI, blockchain and their associated applications, information can be better communicated to the customer, which is to the firm’s advantage. For example, supplemental information that may be of interest to the consumer can be verified beyond former

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capabilities, and thereby promoting the firm in a more positive light, increasing brand reputation, and eschewing unwarranted greenwashing.1 Much as positive promotion brings advantages in marketing, reputation, credibility and branding [11], the disadvantages are also numerous. Additionally, the cost of sustainability credentials and certifications can be significant [17]. Smallscale enterprises also face difficulties resulting from limited economies of scale [66]. Although the entrepreneur may have strong sustainability goals, according to DiVito and Bohnsack [34], business factors culminate in the conflicting duality of decision making for competing sustainability and entrepreneurial priorities and can call into question the original enterprise orientation of the founder. In a similar vein, Todeschini et al. [133] as well as Cortimiglia et al. [30] note the distinction between ‘born sustainable’ and established businesses that convert to sustainable practice and suggest those that begin with sustainability missions are more likely to be successful in their pursuit of sustainable values. They see the recombining of different sustainability aspects, such as leveraging locally sourced components, recycling, choosing sustainable raw materials and fair trade not only as advantages to the firms’ success but easier to achieve if the firm’s initial mission set out with these values in mind. Blockchain Sustainable fashion practice encompasses several measures, as noted above. Among these measures is the assurance that supplies are sourced ethically and sustainably. This may mean that raw fibres are grown sustainably—if not organically, that greenhouse gas (GHG) emissions were minimised along the way and that fair labour practices took place. Unfortunately, the fashion supply chain is notoriously complex and opaque. Many transactions are documented by hand, or if digitised—the data is lost at any number of steps on the path to production, sale and end of life management. Digital technologies such as blockchain have emerged in the last decade as a ‘white knight’ that promises to remedy some of the fashion industry’s ills [9, 12, 109, 128]. Blockchain is a backend technology that enables a number of previously unavailable functions related to transactions. It is used to document, secure and discriminately share information held on a distributed network of ledgers for virtual currencies, identities, regulations and supply flows among other functions.2 It is used by financial services, government departments, manufacturers, retailers and others,3 and importantly for this study, supply chain transparency. Some of the functions pertinent to 1

Greenwashing refers to false or misleading claims of sustainable practice, communicated by a firm. 2 Other functions include: Virtual currency offerings (Bitcoin, Eth, Fibrecoin, Beefcoin), big data, developer tools and platforms (Ethereum, Hyperledger, smart contracts, tokens, cash trading, commission payments), security, interoperability (Evrythng), evidence of custody, file storage, authenticity, shared data (IOTA, Internet of things), content monetisation, royalties (No Point Stopping), value exchange, prediction markets, ticketing, gambling and gaming [24]. 3 Other user organisations include: Community service (CivicLedger, AusPost, ASIC), consulting firms and technology providers (CSIRO, Data 61), exchange markets, static registry (e.g. land titles), dynamic registry (e.g. supply chains), identity (e.g. civil registry, voting), agriculture (e.g. Blockgrain, Geora, WaterLedger, BeefLedger), banks (ComBank, Wales, ANZ, R3-platform) venture capital, lending, payments infrastructure (e.g. cross-border peer to peer payments), energy, science,

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supply chain management include storing data in a way that cannot be changed and thereby verifying the truth of a claim. Blockchain provides immutable, digital data that is continuously authenticated in a secure and time stamped record. Most blockchain-for-the-supply-chain studies emphasise provenance, citing transparency, trust, and traceability as the primary benefits of the technology for the fashion industry [102, 131]. Beyond openness, Warren et al. [141] highlight economic benefits and various forms of new value creation, such as cross-sector dialogue. The economic benefits include risk aversion, time savings and increased efficiency through the elimination of repetitive administration. Some observers refer to blockchain technology as the New Internet [98, 129]. Notably, some research highlights the difficulty of comprehension and adoption and the demand for transferability and open access [46, 95, 139]. Others challenge the application’s usefulness and return on investment [73, 74, 111]. All evidence indicates that the technology is still developing and has not yet reached its full potential [19, 51]. Nonetheless, its benefits for more efficient and traceable supply chain flows as well as its substantial benefits for sustainable practice are compelling, thus motivating this study. Aside from studies by Kouhizadeh and Sarkis [67] and Kouhizadeh et al.’s [68] research on blockchain’s applicability in sustainability, there is little research beyond validating the provenance and authenticity of luxury goods. The primary advantage of the tracking capacity of the system is that it will keep stakeholders accountable along the supply chain, so that all participants can be assured of correct conduct both upstream and downstream. This is a significant adjustment to the traditional fashion industry structure, reliant on trade secrets and concealed (often unethical) and cheap labour markets for competitive advantage. Data sharing is both embraced and rejected in the fashion industry. Numerous experts demonstrate the promise of blockchain technology through pilot studies, but there have been few actual analyses of application cases. Researchers [92, 102, 108] agree that, as a complicated technology with a variety of uses, blockchain merits greater investigation—and specifically empirical research. However, despite its obvious benefits, this technology has been adopted with caution. The idea of fashion technology as a ‘cure-all’ has captured the imagination of journalists and readers alike [119], but this has led to a degree of angst among designers and brands, feeling the pressure to adopt and embrace yet another technology or be left behind [52, 68]. Despite the abundance of effusively disseminated information, there appear to be few concrete examples of full-scale adoption. That is, there are few platforms, websites, apps or software applications that are accessible and applicable for the ‘ordinary’ small-scale entrepreneur or supplier. For instance, the technology company Provenance was one of the first to enthuse the fashion industry with its presentation of the application for the supply chain at the Copenhagen Fashion Summit in 2017 [138]. Since then, the company has been contacted by various fashion companies but no substantial blockchain has resulted for fashion. Although the company now works with over 100 businesses (unrelated to fashion), its founder media, communications, telecommunication companies, entertainment managers, risk and security operations, social media platforms [130].

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Jessi Baker states that public blockchains “have a long way to go before they can be applied at scale” (cited in Volpicelli [138]). In search of why so few examples exist, the literature [51, 108] suggests that although the software and its applications are well understood (by experts perhaps) it has not reached its maturity. The several forms of digital technology currently evolving in the fashion industry include artificial intelligence (for predictive analytics), additive manufacturing (3D printing) and virtual design (including avatars). These emerging forms of digital technology have recently been categorised under the term Industry 4.0 [12, 124, 54]. The World Economic Forum defines the new emerging technologies as “a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres” [121] collectively called Industry 4.0 and effectively denoting the fourth industrial revolution. Research into Industry 4.0 is relevant to this study because it presents the most current and difficult to comprehend and implement technologies. Blockchain technology is considered to be growing out of its early 1.0 version (applied to Bitcoin), through the information centric 2.0 (where we are now) to a blockchain user centric 3.0 stage [16]. Beyond these developments, Industry 4.0 already predicts the autonomous interactions of blockchain with other technologies including the internet of things (IoT). Blockchain mechanics Of the tools emerging that can assist the sustainable enterprise in achieving sustainability goals, blockchain was chosen because of its inherent capability for transparency and trust in the first instance, as well as its potential for incentivisation to participate in the circular economy. Blockchain is becoming a generic term to describe the backend programming architecture that possesses innovative capabilities for sharing data related to transactions. A blockchain is a distributed network that employs mathematically generated rules to prevent the modification of records [33]. The 2009 algorithmic code that led to the creation of blockchain technology was the first to enable peer-to-peer communication for the transfer of ‘trust’ [61]. Initialised for the cryptocurrency Bitcoin, it enabled the creation and exchange of the first virtual currency on networks without the need for an intermediary (e.g., a bank). A blockchain resides on a network of computers (nodes) that can share information regarding transactions, identifiers, regulations, and any other data requiring verification. A block is formed from a transaction record. This block is connected to another by a mathematically encrypted chain. All blocks are interconnected in a network. The networks may be public or private, restricted or unrestricted, or a combination of these protocols. Blockchain accurately and securely redirects value transactions. Transactions are defined as a series of digital ledgers that are disseminated and verified over a network, with information in the form of financial spreadsheets, databases, photographs, or designs [138]. Each transaction or ‘block’ is broadcast to all network participants and must be validated on every node or computer hosting the blockchain. It provides an immutable, secure, and time-stamped log in which digital information is continuously authenticated. As information is not anticipated to be hosted on a single cloud-based server or organisation, this procedure may include thousands of computers (a background process that requires carbon emissions assessment). Once

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a block is validated it cannot be altered without being changed across the entire network. It is useful across many industries including finance, logistics, agriculture and supply chains as noted above (see footnote 2) [5]. A smart contract (SC) is a blockchain technology extension. Ethereum Blockchain was the first to include SCs, ushering in a new era of transactions. Smart contracts are self-managing systems that adhere to a set of automatically enforced rules. The platform Solidity aids in the programming of SCs. Even so, shortly after Solidity’s launch in 2014, Solidity-based SCs were subjected to numerous hacks. The prevalence of vulnerabilities in SCs was the key reason for these attacks. This serves as a reminder to developers and software engineers that, in order to ensure SC’s safety, each SC must be thoroughly tested using effective methods to detect vulnerabilities [63]. News of such attacks unsettles the prospective end user—in particular the SMFE user that is untrained in software engineering. Furthermore, the deployment of its backend architecture contains a number of difficult components, according to the admission of some information technology specialists [48, 91]. It has developed a plethora of topic-specific vocabulary and skills that are foreign to the end user. Blockchain is ideally deployed in digital only environments (such as for cryptocurrency and minting NFTs). However, the fashion supply chain deals mostly with physical items. Blockchain applications for the SMFE may mean for example a ‘digital twin’ is created of a transaction—such as the delivery docket of a garment produced in manufacture. In other words, this information is made into a block. The fabric supplier may have also created a block for the fabric that was used for the garment. The two blocks are connected by a chain and are hosted in the network. The garment is sold to an end consumer online. At the end of life, that consumer uploads the garment to an online resell marketplace including the reference to the information already on the blockchain. The new buyer has confidence that this is a genuine branded article that the fabrics are made from (as per the blockchain). It may contain information on Australian grown cotton, spun and woven in Turkey and may have generated 8 tonnes of carbon emissions during transport. The buyer also knows how old the garment is at this point. The second buyer would have the date and purchase price entered onto the block as well as the delivery location. The potential information available on the blocks is considerable. Fibre information can include natural plant fibre information, for example, cotton, kapok, linen, hemp, ramie, kenaf, nettle, jute, sisal, pina, abaca; natural animal fibre: wool, mohair, camel, alpaca, silk, cashmere, feather down. Synthetic and man-made: polyester, nylon, elastane viscose rayon, Lyocell rayon, bamboo, Tencel, acrylic, acetate, metallic, carbon fibre. Fabric blends: cotton-polyester, wool-polyester, cotton-elastane etc. Information can be recorded regarding lots and bales to the point of geo-specific locations of growth and harvest. Indeed, much of this information is already recorded in batches during production on the farm. But without blockchain, information is lost or harder to verify. Information recorded on paper or organisations’ digital files in systems that do not interoperate is also lost. Some information can be retained with certification schemes. With blockchain, the information that can be retained includes percentage blend, country of origin, soil health, water records, feed stock used including supplements such as hormones, shearing

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procedures, other procedures, location/s of manufacture, chemical compounds used, methods, labelling subject to ISO standards (which are not standard in each jurisdiction), fabric composition, time stamps and so on. This level of detail may not be required at the moment, or by all stakeholders, but having the information and moreover, the technical systems in place is important for potential future needs of cross border compliance and more demanding consumers. Ethereum is the platform that enables most supply chain protocols. Tech companies currently offering blockchain solutions like this or with similar functions include FibreTrace cooperating with Melbourne jeans producer Nobody Denim; Labrys (Brisbane) developing a fibre token with textile waste recovery firm BlockTexx; and TrusTrace (Sweden) incorporating blockchain into QR codes on garment labels for the fashion brand Residus. Provenance (London) is collaborating with designer Martine Jarlgaard; and LUKSO (Berlin) is developing a mobile app and the ‘cultural token’ LYX to buy and sell fashion. IOTA, an Internet of Things technology company, has collaborated with luxury brand Alyx to develop a new protocol called ‘Tangle,’ which can handle many transactions at once. Loomia adds an electronic smart layer textile to clothing that can be monitored and traced, as well as transmit data about the garment’s use to brands. ConsenSys collaborates with Lane Crawford Joyce Group to recycle high-end items; VeChain, has teamed up with Chinese fashion label Babyghost to track and authenticate clothing using QR codes. Bext360 can track agricultural items and provide direct payments to farmers, while Faizoid is developing a blockchain for the global fashion supply chain. Textile Genesis is collaborating with Lenzig and H&M to track and trace fibres and has also produced a token (patent pending) called Fibrecoin; Perlin is working with Asia Pacific Rayon (APR) to certify sustainable forestry of their woodchip used in rayon production [60, 65]. Papertale in Sweden has developed a smart tag tracing app for mobile phones; the UNECE is developing blockchain tracing with Mulberry and Vivienne Westwood. These tech firms offer customised, high-priced solutions and/or pilot studies that have not yet developed to scale. In 2021, the UK Fashion and Textile association (UKFT), the largest network for fashion and textile companies in the UK undertook a pilot study in collaboration with IBM, Leeds University and several brands including COS, NEXT and N Brown Group. However, few seem to be fully implemented [135]. Findings suggest that the business model behind the technology services is not yet fully realised, or if they are, the costs are prohibitive. For example, Microsoft offers the Azure platform but depending on the transaction volumes, costs rise exponentially. Despite the numerous pilot studies, access to blockchain enabled tracking and tracing is extremely limited. For example, customers can only access information when they join the MYAMQ (My Alexander McQueen) club and buy an item. Because these blockchain solutions make use of private, permissioned blockchains, this effectively eliminates a large number of players—as well as the general public and the small-scale enterprise. Auditing detailed information on stocks and flows gives rise to questions of security, regulation and governance of the technology. Understanding private, permissioned and public blockchains are important to this study not only because of issues around levels of data security but because of the need for collaboration among

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competitors as well as the capability for public access. For the technology to be democratised, we are at the stage of strategy development for blockchain for the fashion supply chain. Strategy development includes collating all processes and all stakeholders and then envisaging how blockchain could create more efficiencies. Some enterprise software and platforms already exist such as enterprise management systems (EMS) customer reference management (CRM) and accounting systems such as MYOB and Xero. These ‘legacy’ structures will arguably require integration into a firm’s blockchain system. Advantages and disadvantages Studies on the benefits of technology by Fosso Wamba and Guthrie [49] show that blockchain adoption improved the competitive advantage for the supply chain businesses they investigated. Beyond transparency, Warren et al. [141] describe the economic benefits and other forms of new value creation, such as cross-sector communication. Under-resourced SMFEs can benefit from automated and on-time payments through smart contracts. Cash flow, the ‘holy grail’ of business survival can be better reassured in this way. Automation removes the human element to an extent and thus has the potential to mitigate power imbalances as well as cutting the costs of intermediaries. The potential in changes to the firm’s relationships with financial institutions, for example, the guarantee of credit ratings would be welcomed by SMFEs. The streamlined and consistent flow of information would reduce supply chain risk—such as unforeseen delays [124]. Automated and streamlined information flow would allow speedier movement through borders—with the added potential for lower insurance premiums and an increase in satisfactory deliveries—therefore the firm would be seen as a better risk on the whole. Finally, the benefits afforded by blockchain enabled transparency offer a validated, marketing story to the consumer— real-time verifiable information has the advantage over certification agencies and self-reporting, which circumvents allegations of greenwashing. According to the tech consultancy firm Accenture’s report on building value with blockchain [141], More than 64% of blockchain projects are now sponsored by information technology (IT) or research and development (R & D) budgets, showing that the focus is on technology rather than aligning with the primary areas of opportunity [141] in organisations, not to mention integration. The technology providers’ value driver frameworks aim to help organisations identify the value of blockchain technology by building corresponding business cases (to attract investment in the technology). In their paper on the new shift in value, trend forecasting agency WGSN discusses resilience strategies through gaining trust. WGSN claims “open, honest conversations on supply chains, sustainability and corporate social responsibility (CSR) will be key” [142]. Therefore, to further the agenda of the circular economy, drivers need to be found within the fashion system to incentivise good practices. Blockchain technology is emerging as one of those drivers, but it will not be adopted at large until it demonstrates tangible value, including paying for itself. Value can be created in a number of ways, through and by technology as well as through and by a firm. However, the value can only be realised once the technology has been fully embraced and embedded in the firm’s operations and culture. Eveland [41] suggests

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technology only exists to the extent that it can be implemented and used to produce values. These studies demonstrate that alongside increased efficiencies, digitalising the supply chain would considerably improve the sophistication and expectation of supply chain transparency. Time and cost can be major drawbacks on the road to blockchain adoption in its current state of readiness. Consultation with a technology firm and feasibility studies can run from USD10K to US100 K [122]. Developing a customised application can cost from US250K–US500K and implementation can lead to US1M. There are also high potential hosting and operational costs for example the billions of transaction verifications would necessitate a large amount of computer processing power and energy [93]. Due to the complex network of numerous transactions, outlays for maintaining the blockchain-based system can be prohibitive [132]. Furthermore, the amount of funding of start-ups in the blockchain supply chain space has been insignificant. The reason for this is that blockchains rely on an ecosystem of players who are willing to transact on the agreed-upon platform. The opportunities for startups may grow once the big players, like R3 (formerly a consortium of banks that claims to be the largest blockchain in the world), Ethereum and HyperLedger have perfected their platforms. It is envisaged that the start-ups can develop from those infrastructures. Although participation is cited as a significant challenge, it points to the need for greater collaboration, communication and understanding between those building the technology and the end users themselves—in this case, the stakeholders in the fashion industry. This is not an insurmountable problem—but has not been undertaken holistically to date. Human error is a possibility that must be considered, especially in the case of data input [117, 144]. A blockchain ledger will not stop a wholesaler from offering a counterfeit handbag, an exotic skins supplier from falsely claiming to have sourced from ethical farms, or a brand’s warehouse manager from listing 500 outfits instead of 50. And once they are in the blockchain, they cannot be changed or withdrawn [96]. When Vestiaire Collective, an online luxury consignment retailer, explored incorporating blockchain they found that their suppliers were reluctant to record data—because this is a tedious and time-consuming process [96]. All parties and points of contact must participate in order for blockchain to be effective. Furthermore, data integrity is in the hands of data collectors, who require a validation system to prevent erroneous input [95]. Companies may also struggle with the notion of bringing rivals on board. For example, although the data collected cannot be altered, a company could retain ultimate control over the technology itself, potentially dictating what would be tracked [96]. Having a unified system with definitive standards and regulations is the major barrier to adoption [95]. In the meantime, to solve the problem, according to some accounts, some of the logging is conducted without relying on a blockchain [138], which calls into question the validity of the technology itself. It is clear from the ‘division of labour’ between the fashion firm and the technology provider that there are a number of tasks for each party to undertake and resolve. In many instances, each party is not aware of the other’s difficulties and complexities in identifying ‘pain points’ and reaching solutions. On the one hand, a fashion firm may find it perfectly normal to order hundreds of supplies—from firms that in

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turn require hundreds of components. The tech firm would find this ‘complicated’ [112]. On the other hand, the blockchain tech company will have several operations that are incomprehensible to the fashion firm—including creating tokens or dApps, connecting wallets, node deployment, testing on the testnet or mainnet and so on. Just as within the fashion organisation, the tech company will interact with several providers of different services. At this point, a consulting firm may be called upon to function as the communicator between the entities and streamline operations. This adds costs to the solution—ranging from $25 K–$1 M per solution [15]. The costs are justified considering the hours involved, however, the SMFE may well query the ‘return on investment’ (ROI) [59]. The assumption that technology should be ‘free’ is a significant barrier [125]. The technology-using public has become accustomed to free and open source software applications—especially when it should be ‘doing good’ for people and the planet [110, 120]. Unlike the large corporation that has no ‘owner’ but rather shareholders, the SMFE proprietor is a private person and as such is an end user feeling entitled, and indeed only willing to ‘afford’ the free version [46]. After all, the SMFE proprietor has access to powerful marketing tools such as social media and website builder templates, cheap domain registration and hosting, and e-commerce at very affordable prices—certainly in relation to the ROI [31]. Tech companies are willing to ‘experiment’ and are keen to create ‘use cases’ for enterprises—but immediately expect a like for like financial investment from the firm—particularly considering technology services are in high demand and well remunerated. Given that the SMFE does not see the tech as a ‘must have’ but rather a ‘nice to have’ asset [19], they are unlikely to take the next step and start investing into their own blockchain. Large, well-financed companies have taken the step—and as such are providing research and development results to observe and learn. Meanwhile, the SMFE will remain in the wings until the balance of ROI swings more strongly in their favour [23]. The cost of computing power is significant and presents a sustainability anomaly. Decentralised signature verification can be computationally complex and can be a bottleneck, especially for the fashion supply chain with thousands of products and related information per season. The technology is still too sluggish for widespread use [62]. Ethereum can only execute roughly 15 transactions per second, compared to 2,000 for Visa, for example, however, this ratio is steadily improving [25]. Mining, the verification process that is fundamental to blockchains, is according to Gerard [53] a ‘carbon-generating disgrace—Iceland uses more electricity for mining bitcoin than it does in powering its household’. However, the Ethereum platform developed by Buterin found a ‘work-around’ to the energy hungry mining method—creating a proof-of-work mechanism to replace the proof-of-stake developed by Satoshi in 2009 for cryptocurrencies. Effectively this requires less computational power and heralded a turning point for blockchain applications for supply chain management [21]. The cost of development, the lack of blockchain literacy and false assumptions on what the technology can and cannot achieve and how to deploy it effectively and specifically for the fashion supply chain add up to the currently insurmountable barriers to adoption. Is it worth the investment considering—costly application

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development, training required, cultural disruption and financial outlay? Another barrier to blockchain adoption may also be coming from the big players themselves. Blockchain technology’s main value creation capabilities do not necessarily align with free market economics and the growth mindset of capitalism. For example, Parrish [100] suggests that the expertise in organisational design required for sustainable venture success differs depending on the firm’s values and motivations. The technology’s value to enterprises currently lies in saving rather than making money. It tends towards a sharing economy mindset. By opening data to more stakeholders, its value lies in the use and exchange of data—as it reduces replication and improves efficiencies. Its premise (much like the Internet) is too democratising, it potentially levels the playing field and undermines the competitive advantage that can be gained from holding trade secrets [128]. In the case of many current use cases such as Everledger for Louis Vuitton, the savings lie in preventing sales of counterfeits and minimising market share loss [72]. LVMH is collaborating with software technology Company ConsenSys to develop and promote its own blockchain brand protection initiative on a ‘white label’ output to combat counterfeit and grey imports, with the option for competitors to join. Counterfeit goods missing the physical-digital link will easily be identified, as are any attempts to divert goods. Farfetch planned also to launch a blockchain platform in collaboration with Facebook in early 2020 with the express target of authenticating goods. Fashion logistics can also benefit from blockchain implementation. The transport of goods and supplies from China to Europe for example can involve around 30 parties and some 200 transactions with each interaction requiring multiple copies for customers authorities, manufacturers, logistics and other organisations. The tech provider Fazoid has created a blockchain enabled supply chain platform encompassing capabilities documenting and tracing the payments, manufacture and movement of products. It offers real time data that can also help mitigate holdups in the flow of materials [60]. Further applications of blockchain for the fashion industry registering and clearing intellectual property (IP) rights, regulating and tracking evidence of usage, and the legitimate use of IP are elements of IP management [59]. It can also be applied in enforcing IP agreements, licences, royalties, exclusive distribution networks, transmitting payments, authentication and provenance [20]. However, the research beyond verifying the origin and authenticity of luxury goods is scant. For instance, ElMessiry and ElMessiry [40] propose the savings that can be achieved in avoiding the sale of false goods by adopting the technology. This is a speculative proposal which lays out the steps graphically and demonstrates a mathematical understanding of the technology but provides no empirical evidence of its application. While these initiatives seem useful for the company, the sustainability aspect is somewhat secondary to ensuring ongoing profitability. Furthermore, the data sharing aspect may be causing a conundrum for stakeholders. They question how much information they are willing to share. The very idea of sharing information seems to be an anti-business ethos, and yet the advantages are also persuasive. We may well be experiencing a transition phase where the enterprise is rethinking its basic principles. It seems rather that blockchain is an enabling mechanism for a new order of enterprise business modelling. One in which ‘credits’ are digital; there is no

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cash money exchange and new values are building—such as the value of verifiable information. Blockchain as a technology cannot provide all the answers alone for the fashion supply chain. A slew of other technologies will be required to make the technology as efficient as possible. This includes artificial Intelligence (AI), beacon technology (QR codes, Nano Fibre Tracing and RFIDs) as well as others such as video analytics [9]. According to the solutions architect at Accenture, Wei Yin Han, a combination of technological and human resources is required: Consideration has to be given to the other factors: People using it, process to govern it, and the validity of data that is being captured by the technology. There is the technology to capture the data (wearable, IoT, human), the technology to store the data (blockchain/DLT/ plain database), the technology to process the data (AI/ML, plain programming or even human brain), and the technology to make the data understandable and actionable by humans (PowerPoint, web pages). So why isn’t there a simple solution? Interoperability. Consensus. Governance. To make things talk to each other, they have to understand the same "language". Or at least the "grammar". Then they have to agree that the language and grammar make sense and the rules apply across the board. In the function of the supply chain, because it involves different vertical and horizontal parties/organisations, these are even more important [57].

1.1 Integration with Other Technologies Blockchain adaptation and integration into the existing system can be a major challenge within firm operational processes necessitating replacements or timeconsuming changeover procedures [140]. Moreover, blockchain adaptation may also signify an operational change from the centralised to a decentralised network that might require investment in human resources [2]. Some consulting agencies are offering to alleviate this pain point by taking over the process on behalf of the firm— but this presents a contradiction in a sense, as the main selling point of a blockchain system is to be decentralised which is not the case if a single company manages the blockchain system [96]. The key advantage of the technology for the supply chain appears to be workflow efficiency in merging multiple data information sources. Sustainability is just the ‘cream on the cake’—like the electric car that goes fast but happens to be sustainable [37]. Like the Tesla—effectively a ‘computer on wheels’, incremental changes towards driverless cars have already begun. ‘Normal’ cars are smarter, connected and already partially autonomous, smoothing the path to ‘driver’ confidence with autonomous vehicles in the future. So too, the formerly analogue fashion industry is becoming increasingly automated and ‘autonomous’. We could envision a future in which the fashion system (and its many facets) could effectively run itself. Sustainability is not seen as the key driver in the literature on technology. Instead, consultancies, government guidelines and educational organisations concur that the adoption of the technology needs to come from the standpoint of the business and how it can operate better to reach triple bottom line (3BL) goals—rather than applying technology to the problem, in the belief that it will solve the issue. Moreover, identifying

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the value added in other, unexpected ways could be the way forward to facilitate the transfer and adoption of the technology. The rise of blockchain and other mass data-based technologies has created new stamping grounds but also new requirements for communication, interaction, collaboration and understanding between stakeholders in the world’s larger systems, like the global fashion industry. These shifts require an examination of the potential shifts in leverage on those systems [89]. Blockchain enabled transparency does represent one such lever with the potential to highlight the planet’s social and environmental issues. Not to be ignored are the economic benefits. The hope is that the advantages are kept in balance once the suite of technologies required is fully operational. For example, designer Matthew Williams says that’s all normal for a technology in its infancy. ‘It doesn’t seem so much of a fad to me, it’s just whether this version is the version that works or not,’ he says. ‘In the future, a lot of this stuff around sustainability will be mandated (e.g., EPR) with some suggesting corporations be restricted from activity until they have fulfilled a sustainability goal obligation. If people aren’t exploring this type of thing now, they will be left behind’ (quoted in [82]). Current blockchain applications in the fashion supply chain The dynamics inherent in supply chains are the subject of numerous scholarly studies [26, 40, 68, 105], but the present investigation focuses on the transformation required to automate the documentation of components and services along the supply chain that contribute to the production of manufactured textile products. Specifically, the study looks at the documentation of the origin of raw materials and services from raw material to recirculation to end of life. This is because textile products are the primary output and means of revenue for the small-scale independent fashion enterprise, the entity at the heart of this study.

1.2 Ideal Technology for Idealist Business Models The ‘pure’ or ideal blockchain implementation for the supply chain would contain every transaction and make it available on-chain. There are two primary reasons why this cannot be implemented at this time. Developers are discovering that blockchain is not always applicable or, more precisely, that multi-national corporations do not always desire blockchain in its ‘purest’ form [3, 94]. One issue is that sometimes there is simply too much information, which is not optimal for placing on-chain (i.e., it is not compatible with the app architecture, which favours transactions over data storage). Second, some organisations do not intend to add all data to the blockchain. For example, Perlin, a Singapore-based technology company, has already created a very sophisticated blockchain tracking and tracing system for Asia Pacific Rayon (APR). Using beacon technology, bales of cellulose harvested from plantations in Indonesia (and sometimes Canada and the United States) are marked and tagged. The documents are accessible to the public on their use-case website [6]. The APR ‘track your fibre’ website is straightforward and extensive. The information about

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tree origin appears to be exhaustive—labour information less so. The ‘good news’ is that more than 60% of the workforce has postsecondary education, but information about the remaining 40% is absent. How old are the 25% of workers who are not between the ages of 24 and 35? Is child labour engaged, or is it concealed due to a lack of, or omitting information? By highlighting the’good news’ stories, businesses can conceal information that could be misinterpreted or damaging. This is the firm’s choice, but it is not in the spirit of intended blockchain communication. This ‘manipulation’ of the technology ultimately calls its dependability into doubt. It can be personalised, individualised, and privatised to tell the company’s desired narrative rather than the ‘full’ story [59]. Blockchains need to interoperate for the system to work correctly, and flexibility between blockchains is critical. Tech firm Evrythng has created their Blockchain Hub which delivers just such a capability, providing an array of services such as Software-as-a-Service (SaaS), Internet of Things (IoT) capabilities and data storage. Evrythng tries to ensure that different physical products can easily participate in multiple blockchains and avoids creating more data silos. Although the services may be provided ‘off-the-shelf’ they still incur costs and time. While the Alyx pilot took more than six months to execute, Avery Dennison says that standard programs can be deployed more quickly than more customised or complex projects. Evrythng claims to have a plug-and-play technology for data input, as the scan process is supported by any smartphone. The price of such initiatives varies widely. Some digital ledger providers charge transaction fees at different stages of the process but there are alternatives like the IOTA blockchain that Alyx chose, which is free and says it has no scaling limitations. However, the programme necessitates a significant amount of technological expertise, thus requiring the services of a programmer or technician [138]. Furthermore, while there are initial costs of hiring tech companies to create a unique digital ID, the price potentially escalates according to the number of times the SMFE posts to the blockchain, the complexity of its supply chain and the amount of data uploaded. The ‘against’ camp points to the very concept at the core of the tech—that is trust. Many would-be stakeholders are put off by the notion of sharing trade secrets—the factor that delivers many fashion firms their competitive advantage. Blockchain’s role in connecting brands and retailers that normally wouldn’t share information with rivals seems counter-intuitive in the opaque, highly competitive world of fashion. The perceived power relationships between economic actors are at the heart of competitive advantage according to Sargeant [118} and Arthur [7]. Businesses do not wish to reveal their suppliers and manufacturers for fear of having their work copied or others taking advantage of ‘cheap deals’ or worse still, taking precedence in the factories’ priority schedule [109]. When transparency can be used as a strategy to exploit market pricing dynamics, it can be a deterrent. This represents a market transparency paradox [58]. The nature of a dynamic pricing market is for firms to capitalise on pricing inefficiencies. This mechanism keeps markets competitive with participants such as suppliers and factory owners constantly negotiating, shifting deadlines and priorities to improve margins [75]. Participants and counterparties are

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naturally wary of providing too much transparency that may expose pricing and hedging strategies. Information sharing would be a significant change in the fashion system, which has historically relied on secrecy for competitive advantage and profit assurance. Blockchain technology potentially provides the transparency needed to ensure raw materials are ethically produced, and that products are environmentally safely manufactured, thereby providing all stakeholders along the supply chain with trust not seen before. Early researchers into the possibilities of applying blockchain technology to the supply chain, Sternberg and Baruffaldi [127] also point to the complexity that arises in multi-actor supply chains, (such as the fashion supply chain) as well as the management of the ownership of data and the sharing of responsibility for the software’s functions. Blockchain programs can prove to consumers that a brand is not greenwashing. ‘Adding this blockchain layer means it is much harder for brands to cheat. It’s about bringing trust back,’ according to Guinard, founder and chief technology officer at a tech firm, Evrythng [82]. Interestingly, firms that are implementing blockchain are suggesting that not all transactions will be ‘on-chain’ and that they will retain traditional databases concurrently. The discussion on the landscape of industry 4.0 technologies necessitates investigation of the open-source phenomenon. Open-source refers to platforms, applications, templates or information such as code bundles that can be accessed by any user (generally developers). Ethereum and HyperLedger are examples of open-source hosting platforms [23]. The advantages of open-source software is that it is either free or very affordable and has ready-made options or components for applications developers, which in turn brings down the overall cost of developing software applications for a firm. Although media reports suggest working with open-source or off-the-shelf vendors allows smaller brands to experiment with the technology [82], it is unlikely that the tech can be used effectively by non-web developers as it does require considerable coding knowledge according to several operational studies on blockchain development [2, 19, 113]. For example, Bullón Pérez et al. [19] step out some of the multifaceted coding detail required in overlaying IT infrastructure with garment specifications. Further, some reports confuse blockchain architecture with the applications with which it interoperates such as QR codes and smart tags, with van Hoek [137] offering a comparative study on the early adoption of RFIDs and the separate functions of blockchain. Meanwhile, Fitzgerald [46] observes that open-source software has shifted its emphasis from proprietary to commercial solutions and warns of a decline in quality as a result. The Hyperledger-Fabric platform offers templates and guides on how to incorporate the software, but it is difficult for a lay person to comprehend and integrate. However, when open-source coding is presented as a template or application such as a QR code generator, the barrier to entry for everyday users reduces considerably. For example, the brand Alyx has created swing tags featuring a scannable QR code that showcases the entire supply chain history of the attached piece, including when and where the garment’s basic materials were sourced, as well as its manufacturing and shipment history. The information is entered by Alyx’s suppliers, and Evrythng saves and uploads it to the ledger, while Avery Dennison creates tags with digital IDs for each garment. Again,

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this example demonstrates the ‘work-around’ state that the technology finds itself in at the moment. That is, firstly that blockchains are usually customised for each firm, second, a number of players/tech firms are required to collaborate with interlocking parts, and third not all information is necessarily added to the blockchain.

1.3 Value Creation This section demonstrates that value could be gained on a number of grounds including quite simply by improving efficiencies and thereby saving time and money. Avoiding duplication of work tasks and multiple handling reduces turnaround time, cutting out the middleman including their payments, wholesalers’ paperwork and the inefficiencies caused by money exchange and late payments [76]. Payments can be automated to occur for instance at the moment of entry through a border. Altogether this provides a better user experience and eliminates delays and piecemeal and fractured solutions. Brands may increase consumer lifetime value by adding digital services to physical objects, such as product provenance information, registration, rewards, and direct eCommerce, all of which can be accessed with a simple smartphone scan (Evrything n.d.). Tokens can be attached to products to provide rewards and incentivise good practices. Furthermore, companies may adopt innovations to take advantage of the ‘halo effect’ aligned with advanced technology. For example, designer Matthew Williams at Alyx claims transparency adds value to the pieces by becoming ‘a really great storytelling element.’ Transparency also brings the intangible value of credibility according to Maguire [82]. Altogether there appear to be a number of strategies that could potentially build enough value in the technology for it to ‘pay for itself’, once an upfront research and development cost has been covered. The upfront outlays would represent a large sum and large risk. Unsurprisingly a few large-scale firms that could potentially absorb research and development expenses are taking up the challenge. It is at this point that the minor more agile firm could arguably take up the baton and experiment on a smaller scale—thus participating in a prototype or minimal viable product to demonstrate potential value creation and gain.

2 Diffusion of Innovations 2.1 Digital Transformation, Challenges in Adoption and Implementation The study of technology transfer has grown out of the wider theory of Diffusion of Innovations (DOI) [116]. Various tactics are utilised to appeal to different adopter types while promoting an innovation. The phases through which an organisation

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adopts an innovation, and through which diffusion is achieved, include recognition of the need for innovation, decision to accept (or reject) innovation, initial use of innovation to test it, and continued use of the innovation. Forrester [48] suggests that fashion firms are hesitant and are assuming a wait-and-see approach, which would place the dissemination of the innovation on the rising part of the adoption curve [114] into the early majority sector, thus also aligning with the Gartner [51] hype cycle curve. Despite their advertised benefits, new technologies have not always been quickly adopted [114]. The more the technological complexity, the greater the fear among brands. Bevilacqua and Adragna [14] and O’Dair [99] note that brands are under pressure to use technology despite their apprehension regarding the ramifications of ill-informed implementation. One of the aims of this study is not only to develop an increased understanding of the technologies, their limitations and capabilities but also to discover the mechanisms of smooth technology adoption, transition and implementation. It hopes to allay the fears of SMFEs by demonstrating the potential positive effects and the ease with which some technologies can be implemented. In doing so, the study also hopes to advance the dialogue between software developers and textile industry players. It argues that the adoption of technology, although daunting for end users in the textile industry, can be facilitated by suitable communication and collaboration between stakeholders. Technology proponents believe that innovations will diffuse spontaneously, moving seamlessly in one direction from research and development to a receptor organisation [124, 41]. Some argue that when technological transfer is delayed, it is assumed that the receptors are to blame [115, 143]. For example, Bluetooth technology had been on hold for a long time and almost disappeared into obscurity, even considered ‘dead’ before successful applications could be identified. As Eveland [41] pointed out some time ago, ‘there is today an increasing consciousness that our technology has, in enough cases to worry us, outstripped the ability of many organisations and individuals to make productive use of it’. It seems that this is at least partially true in the case of fashion industry uptake. Each partner to the technology transfer process may have a unique perspective and barriers towards the technology. Two-way communication may be used to resolve these discrepancies between the tech organisation and the receptor organisation over time. However, waiting for an amenable solution to occur seems counter-intuitive in the context of the current fast-paced tech environment coupled with the climate emergency. Finally, the Technology adoption model (TAM) developed by Davis et al. [32] also informs this study. Although the initial TAM was applied to workplace tasks and computer systems, and developed at the beginnings of the digital era, it is a technology-based theory that is suitable to explore organisational apprehensiveness concerning digitising the textile supply chain, exploring attitudes towards the technology and the perceived ease of use and usefulness of the technology, thus providing a theoretical framework for the analysis of digital hesitancy.

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2.2 Is Blockchain Adoption Inevitable? The sense of urgency in gaining more knowledge about blockchain is evident in the increased proliferation of webinars, conferences, short courses and organisations emerging world-wide including the UAL London College of Fashion Future of Fashion incubator London, Fashion Tech Berlin, held twice yearly, Fashion Tech Talks Sweden, IFE Paris, Atelier ISEM, Spain, New York Fashion Tech Lab, Start Up Bootcamp Fashion Tech Milan, the Milan LUISS Hub Fab Lab, to mention a few. University courses on blockchain are offered at LCF and UTS with RMIT offering a graduate certificate qualification in blockchain. Meanwhile, blockchain enabled cryptocurrency adoption is gaining ground. For example: This week, China launched its National Blockchain-based Services Network (BSN) and rolled out tests of its Digital Currency Electronic Payments (DCEP) (Digital Yuan) initiative. The BSN is the digital backbone to deliver multiway connectivity to China’s trading partners. It will operate a new internet protocol to enable data sharing, and more efficient ways to value and exchange digitalised assets. Costs will be inordinately low, removing barriers to on-boarding [28].

This demonstrates the speed at which the technology is developing—to the point of adoption into the mainstream. Although the corporate consultancy firm Gartner [51] observed a dip around 2018 of the technology into the ‘Trough of Disillusionment’, the innovation curve is, as predicted, on the upswing (notwithstanding the pandemic), with the number and types of organisations interested, experimenting and using blockchain technology now growing exponentially. According to industry reports and predictions [4], 75% of retailers plan to invest in technology in the near future, with 85% of corporations experimenting with blockchain in 2018 [107]. With the increase in information, supply chain partners and product complexities, the number and size of blocks will increase, resulting in larger databases and computational requirements [145]. They may not reach full implementation until at least 2028, when Gartner expects blockchain to be fully operational and technically scalable, but the time for initiating preparedness is upon us. Since the.com boom, media representations, buzz words and miraculous solutions have fuelled media reports. However, in many instances, the information is somewhat idealised or overinterpreted. The ‘smoke and mirrors’ phenomenon observed in the literature regarding the invention and adoption of technology [24, 51, 138]—and specifically, blockchain, both in peer reviewed papers and media releases, is itself of interest. It raises several questions. In the case of SMFEs, one is led to ask how vulnerable the firms are to the ‘hype’ and how they appear to fear ‘missing-out’, desperate to grasp external technologies to ensure their success [98]. Further, why is the media creating the agitation, and finally what role do the technology companies play in conveying the technology to the end user? The tech developers—whether public facing consultancies or small-scale tech start-ups—appear to be so convinced of the technology that they follow the adage, ‘build it and the people will buy it’ [70]. Unfortunately, adoption does not inevitably follow once the technology has been invented as already observed by Rogers [115] some time ago. Despite the arguments

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for and against the technology, the question remains as to why it is taking so long to adopt and implement if it is so advantageous. Indeed, blockchain technology appears to be the current primary example of a technology not meeting end user expectations. Secondly, if the technology represents a disruptive business model for good, how can it be best enabled in small-scale firms? There are those that suggest that business and sustainability success—not to mention systems change—can only be achieved by identifying the problem first and then applying the solution, not just to take the solution and try to apply it to a problem [36]. This study argues that in the struggle to find substantive examples of technology facilitating sustainable fashion practice, we have stumbled across another occurrence. That is the pressure small-scale entrepreneurs encounter when making decisions about the direction of their firm, not only to keep afloat but to understand and implement new systems and ultimately act as change agents for the greater good. But according to O’Dair [97] and Lakhani and Iansiti [70], it will take time for blockchain to become mainstream. On the one hand, this is good news as it also means SMFEs have time on their side— unlike the urgent headlines the media suggest. On the other hand, the climate crisis— and all its contributing factors such as unsustainable and hidden practices—also requires immediate attention.

3 Methodology The term blockchain is sometimes confused with Bitcoin.4 Although tokenisation may prove important in reaching the full potential of the technology within the fashion industry, for this research we disregarded studies on cryptocurrency, Bitcoin, FinTech and fields not directly related to the application of blockchain in the supply chain. We arrived at around 20 peer reviewed articles which provided qualitative appraisals of the technology and its potential for application in the supply chain. There were a few articles on coding and computer architecture. Some articles on adoption and value creation by business were also available. As blockchain is a new area of research, we also looked at grey literature, mostly comprised of reports and white papers. Some reports were compiled by government agencies, examining the feasibility of implementing blockchain but more often the accounts were authored by consulting agencies encouraging the uptake of the technology [29, 141]. Thirdly we examined media coverage of the topics. In this way, we were able to gauge the uptake, urgency and familiarity of the concepts with the potential end user. We found that opinions are currently divided on the benefits of the technology. As this research is exploratory in nature, an inductive approach was adopted using a qualitative methodology to investigate the challenges still facing fashion enterprises and the reasons behind digital adoption hesitancy within fashion supply chains. Indeed, from the literature review, it is apparent that a comprehensive understanding

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Blockchain is the technology that enables the digital cryptocurrency Bitcoin.

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of why fashion enterprises are reluctant to digitise the supply chain to enhance transparency is lacking, suggesting further insight is required. The research for this study investigated the technology available for the automation of information and communication in the fashion supply chain. To obtain appropriate participants, the research team hosted a free one-day symposium in collaboration with the UNECE to introduce the UNECE Transparency Toolbox and gauge industry stakeholders’ appetite concerning digital adoption within the fashion supply chain. Using a combination of convenience and snowballing sampling strategies, the research team recruited seven participants to participate in a follow-up in-depth interview post-event. Participants were selected based on the following sampling criteria: ● Worked for an SMFE that designs and manufactures garments in the UK or that relies on a combination of offshore and local supply and manufacture (n = 4) ● Academics and/or developers of digitised supply chain protocols (n = 2) ● Industry bodies, policymakers, and other digital supply chain interest groups (n = 1). Stakeholders from both industry and academia were selected to thoroughly investigate the reasons behind digital adoption hesitancy from various perspectives. Ethical approval was granted by the university ethics committee. Once participants had signed consent forms and agreed to participate in the study, they were asked semistructured interview questions adapted from existing literature. Participants were not incentivised. Each interview lasted approximately 30–60 min. Semi-structured interviews were audio-recorded and transcribed. The data was analysed adhering to the stages of thematic analysis outlined by Braun and Clarke [18], which includes familiarisation of the dataset, generating initial codes, searching for critical themes, reviewing themes, and refining the themes. Accordingly, a line-by-line coding technique was undertaken to identify initial themes and subthemes and then interview transcripts were coded to highlight the relationship between these themes. Finally, to reduce bias and enhance the reliability of the data, each theme and subtheme that emerged was discussed, compared, and corroborated amongst all members of the research team to enhance transparency and reflexivity, adhering to Lipson et al. [78]. According to La Morte [71], five main factors influence the adoption of an innovation: 1. ‘Relative Advantage: the innovation is superior to the concept, programme, or product that it replaces.; 2. Compatibility: consistency with the values, experiences, and needs of the potential adopters; 3. Complexity: difficulty to understand and/or use; 4. Trialability: the ability to test or explore before deciding to adopt; 5. Observability:

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ability to provide tangible results’ [71]. These factors were taken into account when analysing the data for this study. Results were analysed to determine the current phase of adoption; the types of organisations interested, experimenting and using it now; estimated use and to what end. Likely next steps could be extrapolated from this information.

4 Findings and Discussions This study examines the organisational mindset required to adopt digitised textile supply chain transparency. In particular, the researchers investigated challenges currently facing UK fashion enterprises regarding digital adoption within textile supply chains. The interview quotes delineated below, known as ‘power quotes’, are the ones that exemplify participants’ responses effectively and are, therefore, the most appropriate to use in the main body of this chapter [106]. It is apparent from the thematic analysis that three core themes emerged in relation to organisational hesitancy towards digitising the supply chain. The themes are informed by the TAM [32] model and relate to: 1. The usefulness of the data obtained by supply chain technologies and systems, 2. The perceived ease of use concerning the implementation of digital systems within existing textile supply chains and 3. The overall attitude towards digital systems currently available in the industry. Thus, these findings corroborate and extend the Davis et al. [32] Technology Acceptance Model (TAM), which investigates users’ acceptance of information systems [32, 56, 77]. Indeed, the theory posits that stakeholders’ intention to adopt a particular technology can be explained by understanding attitudes towards the technology and the perceived ease of use and usefulness of the technology [86]. Although the initial TAM theoretical framework was applied to workplace tasks and computer systems, it is a technology-based theory that is suitable to explore organisational apprehensiveness concerning digitising the textile supply chain, helping to answer the aim of the present research. Moreover, to date, the TAM model has not been applied to conceptually explore challenges associated with digitising the textile supply chain from a multi-stakeholder perspective, contributing novel findings to the literature. A comprehensive discussion of themes and subthemes, with example quotes from the interviews, are disseminated in the proceeding section. Perceived usefulness of existing digital technologies enabling supply chain transparency Perceived usefulness in the context of the TAM framework refers to the subjective probability that using a specific technology will ameliorate stakeholders’ performance [32]. The advantages of digitising the textile supply chain are heavily outlined in the existing literature and include tracking and tracing the entire journey of

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a product. However, it was apparent from the interviews that questions remain concerning the usefulness of existing supply chain technologies, especially in relation to producing valuable and meaningful data, which appeared to hinder the acceptance of supply chain technologies. Indeed, participants addressed problems in deriving value from data obtained by numerous parties across the supply chain: You’ve got all of this information, what are you doing with it? So where does it end up and […] do you actually change something when you’ve got all of this information? (P.02) Can retailers actually come up with actionable solutions […], I feel there’s a lot out there, there’s a lot of research, there’s a lot of innovation, but it’s not barely actionable (P.01)

It is evident that while digital systems can be employed to collect and aggregate information about the product life cycle from various stakeholders in the supply chain, knowing what to do with that information and how to use data to add value remains problematic. Perceived ease of use of existing technologies enabling supply chain transparency Perceived ease of use denotes how easy and free of effort the user expects the technology to be [32, 86]. Perceived ease of use of supply chain technologies was a reoccurring theme within the interviews and a vital hindrance in relation to digitising the supply chain. Indeed, participants acknowledged that currently there is hesitancy to adopt digital technologies given the complexity and multi-tiered structure of the textile supply chain. Specifically, participants referred to the high level of investment required to train all supply chain stakeholders to implement the technology effectively and proficiently: Enterprises are going to have to invest in training people to use these technologies so their own staff, but also people throughout the whole supply chain, they’re going to have to invest in that training of those people (P.02) How do you persuade people that are picking raw materials in a field and spinning items and processing fabric and yarn and suppliers who have manufacturing the products? How do you convince them to then all of a sudden become really technologically savvy and spend the time to do this? (P.02). They’re going to have to invest the money to have that digital infrastructure there to facilitate these processes [blockchain transparency] (P.01).

The aforementioned quotes suggest that a vital reason behind digital adoption hesitancy is the level of investment required to train members across the whole supply chain to ensure digital competency. Given the global nature of the textile supply chain, this issue becomes even more problematic in relation to emerging countries, where presently high volumes of products are manufactured, that still have several limitations of resources and complex processes of acquisition [124]. This suggests that digitally enabled supply chain projects would require global support from expert consultants, which is not only costly but time-consuming for fashion enterprises. Indeed, one participant acknowledged that while this may be suitable for large organisations, it will still prove challenging given the multifaceted nature of the supply chain:

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For large organisations it will be a lot easier to implement it because they can pay for the technology, they normally have budget for it. However, it will still be super complex because their supply chains are just too big. (P.02).

Hence, it can be inferred from the above quote that digitalising the supply chains requires heavy resource investment including people, financial resources and collaborative commitment from all textile supply chain members to achieve favourable results, a finding which also corroborates [124]. Attitude towards current technologies enabling supply chain transparency When participants were questioned regarding their awareness of current technologies that are used to support supply chain transparency, most referred to blockchain technology. Interestingly, participants evidenced a high level of opposition towards this specific application due to the ambiguous nature of blockchain. Indeed, participants challenged whether consumers and organisations are aware of the full scope of blockchain and how it can be used to enhance supply chain transparency, for example: Do I think the average person understands blockchain? Probably not. (P.01) I don’t think people really fully understand what they mean by blockchain (P.01) I think consumer resistance might be one thing as well… they don’t really understand blockchain, it’s one of those terms that people are using now but do you actually know what it means and what it means for me as a consumer (p.02)

Participants also mentioned the hesitancy of fashion enterprises to adopt blockchain technology. A final reoccurring subtheme that emerged from the data addressed retailers’ reluctance to digitise the textile supply chain, as several organisations are hesitant to reveal trade secrets that are often used as a source of competitive advantage, for example: In terms of competition, if you are too transparent, you’re actually telling everyone these are all my suppliers, this is where I get all of my stuff from (P.02).

Indeed, information exchanged within the textile supply chain can be used as a source of competitive advantage and differentiation [64]. Therefore, some retailers may deliberately choose not to fully disclose information to protect it from competitors, a practice that has also been defined as a “secrecy strategy” [85]. Hence, this subtheme provides further insight behind the reasons concerning organisational hesitancy of digitising the supply chain. Until this issue is overcome, widespread adoption of supply chain technologies remains a critical challenge. Demand for the adoption of digitised textile supply chain transparency Despite the above challenges and hesitancies associated with digitising the textile supply chain, participants acknowledged that, going forward, it will be imperative for retailers to devise strategies to enhance transparency within textile supply chains:

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5 Implications, Limitations and Future Research Along with any other innovative technology, digitising the textile supply chain relies on end users’ acceptance of the technology. Indeed, it is apparent from the interviews that there are three main inhibitors of digitalising the supply chain to enhance transparency, namely, the perceived usefulness and simplicity of usage of existing technologies, and current attitudes towards existing technologies, all of which were found to directly influence the actual adoption of digital technologies within the supply chain. Turning to the SMFEs decisions, useful tools such as the decision tree by Digital Transformation Australia [35] provide information on whether to adopt or not. However, in the case of the DTA tool, the terms are generic and not related to sustainable supply chain specifics. Implications also arise for small business activities in the future including for example the proposed government applications such as business activity statements with the tax office, intellectual property (IP), trademark and design regulations, postal services and business identification documents, that SMFEs will have to integrate [10]. For example, Lukso [81] introduced the ‘Universal Digital ID’ which is promoted to the consumer as a time saving device. Implications are also that brands will themselves require a Digital ID. It is important to note that the government applications using blockchain enabled IDs are not using the term ‘blockchain’. Conceivably they wish to distance themselves from the bad press and confusion surrounding cryptocurrencies. Perhaps as Kemp predicted in 2018, ‘it will be everywhere but no one will know’ [61]. Implications for eCommerce are clear and positive. For example, European eCommerce giant Zalando launched its first digital product passport in 2020. Zalando partnered with EON, a New York-based technology start-up that provides the digital foundation for identifying selected products throughout their lifecycle and enabling future resale, repair, reuse, and recycling. Each item in the collection comes with a digital product passport in the form of a QR code woven into every label. The dynamic code directs clients to a product site where they can learn more about the item’s origins and after-sales services. This includes information like the factory where it was made, and the materials used to make it. Customers may also find more detailed care instructions, including videos, as well as ways to extend the life of their garments, such as returning them to Zalando’s pre-owned section [146]. In this way, Zalando and its tech partners are incrementally introducing or ‘preparing’ the consumer for blockchain adoption without the use of the term blockchain and without initiating ‘technostress’. However, the Zalando example is another well-resourced company

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that can afford its customised blockchain. This still does not answer the question of how the SMFE can migrate to digital adoption—apart from the lessons learnt in incremental transformation through understood applications such as QR codes. It is worth noting that QR codes do not require blockchain in the backend—but the data storage methods required will pave the way for eventual blockchain implementation. Gartner says users should not have to worry about picking the right platform, smart contract language, system interfaces or consensus algorithms. These operations would in time, seamlessly flow on a user-friendly platform format. Additionally, concerns about how users will interoperate with partners that use different blockchain platforms for their projects must be rectified. All together, these technology advances are predicted to take end users closer to mainstream blockchain applications and the decentralised web. ‘Over time, permissioned blockchains will integrate with public blockchains, and will take advantage of shared services while supporting the membership, governance and operating model requirements of permissioned blockchains,’ [79].

6 Conclusion Undertaking this study on blockchain adoption by SMFEs for supply chain transparency—confirmed the characteristics of the Technology Acceptance Model—that the low perceived usefulness of digitalised supply chain technologies and systems, the perceived difficulty of use concerning its implementation within existing textile supply chains, and the overall resistance towards digital systems currently available in the industry are all factors that lead to digital hesitancy. However, beyond these factors, further questions arise in the current context of industry 4.0. Following the examples of large-scale, well-resourced firms, experimenting with pilot studies, development and investment in training, navigating operational upheaval, and developing a ‘digital mindset’ are some of the challenges yet to be overcome by SMFEs. A universally accessible, blockchain enabled supply chain platform is also needed. The next step is to investigate the more detailed requirements of the technology— how data is to be collected, cleaned and verified before it is added to the blockchain, preferably through automation of data input—and how this affects the SMFE’s operational culture. The digital literacy, confidence and training required to work with the technology is another area for investigation. Continued and timely investigation of emerging industry 4.0 technologies is vital in addressing the challenges, and forging a roadmap for SMFEs. True globalisation of supply chain transparency is set to have a feasible future if competitors collaborate, and stakeholders agree. In this way, digital transformation and greater transparency of the supply can be achieved.

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Blockchain Utility by Pioneers in Fashion and Apparel Industry K. Divea and R. Surjit

Abstract As time has progressed, it has become crucial for the society not only to progress along with time but also to stay ahead of it. The fashion industry has always incorporated innovative measures while maintaining the continuity of the business. With the advancement of science, all sectors have faced equal technological threats as much as the benefits they’ve enjoyed due to the same. In case of the fashion and apparel industry, issues such as counterfeiting of luxury designer outfits, increase in percentage of customers with sustainable and clean choices and the pressure to keep up with the complex supply chain management along with the increase in global market demands have risen and the industry is in need of a new strategic model that could potentially solve all the above problems at once. The technological development carried out in order to establish a transparent and decentralized platform, called the blockchain, is gathering traction for its integrity. Blockchain could be highly helpful in solving the counterfeiting of products of luxury fashion brands, helping the industry restrict the losses that it faces in billions each year owing to the traceability that the platform offers. With the growing customer percentage that prefers their clothes being ethically sourced, the blockchain could ensure the authenticity of the raw materials and every other component that goes into the making of their outfits. The global markets have given rise to complex supply chain and warehouse management systems tarnishing the face of the industry. Blockchain is a well-sophisticated platform known for its accountability. Any record created once will always be available and it can be tracked by people with appropriate access to the database. A detailed study on the intricacies of the aforementioned technological solutions by brands pioneering in the industry is carried out in this chapter. Keywords Counterfeit avoidance · Sustainable supply chain management · Blockchain · Traceability and accountability · Metaverse

K. Divea · R. Surjit (B) Department of Fashion Technology, PSG College of Technology, Coimbatore, Tamil Nadu 641004, India e-mail: [email protected] © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 S. S. Muthu (ed.), Blockchain Technologies in the Textile and Fashion Industry, Textile Science and Clothing Technology, https://doi.org/10.1007/978-981-19-6569-2_4

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1 Introduction The internet along with the advanced web technology applications amalgamated accessibility and instant knowledge in abundance. As it happens to every invention and innovation, the Web 2.0 was susceptible to certain glitches and vulnerabilities that involved two major flaws, reliability and authenticity [1]. In the pursuit to find apt fixes for the above, an indigenous decentralized platform called the blockchain was created. Known for its organic nature, it accounts for transparency and trust with the help of its key features. The key features involve decentralization and crypto hashing. The significance of the hash is that it involves acquiring a certain chunk of input data like a user credential and transforms it into an enciphered text called the hash which is similar to that of the password utilized in user verification scenarios [2]. Some of the key features of a hash function include resistance to reconstruction and unpredictability. A hash function is a major contributor in making the blockchain a secure web community, acting like a shield against the most dreaded cyber network attacks. The block in blockchain is made of three basic elements, the data in the block, the nonce and the hash. The process of composing new blocks on the chain is called mining. The decentralization attribute is provided by the seamless functioning of the nodes, which maintains a replica of the blockchain and enables the functioning of the network [3]. Blockchain has become an ideal trade platform for many industries, with the fashion and gaming industries being the early adopters. The fusion of fashion and blockchain took place for the first time back in 2016, in the Shanghai Fashion Week [4]. Amongst the many devils, that the fashion industry would like to combat using the blockchain, the primary ones would be counterfeit and supply chain complexity. The promises that the blockchain has shown the apparel industry is quite interesting. Imagine a person eyeing a piece of outfit in a store that he/she would like to buy. Through blockchain implementations, he/she as a customer would have greater awareness and knowledge about the product’s lifecycle, right from sourcing to manufacturing to labeling [5]. Blockchain would equip the person to be a conscious customer who has a complete idea of how, where, when and in which garment he/she should invest. Hence, buying clothes, footwear or any apparel for that matter would no longer be superficial but would be profound, knowledge and purpose driven [3]. This is where NFT’s come in. NFT (Non Fungible Token) is a digital ledger that contains information about the digital file present in blockchain. These information might be on who created the file, who the current owner is and so on. Metaverse helps in protecting these digital assets in virtual reality. Hence, blockchain plays an integral part in the metaverse. This chapter deals with the association of blockchain from gaming to runway and initiators of blockchain adaptations in the fashion industry. It also talks about the fashion labels and their digital acquisitions, and blockchain and AI-backed metaverse, future virtual place for fashion. The chapter also highlights the progress of fashion through blockchain and metaverse with focus on brands and their activities associated with sourcing, manufacturing, retailing, marketing and supply chain advancements through blockchain. The chapter also aims at detailing the benefits that blockchain

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could potentially yield for the members involved in the fashion industry such as the consumers and laborers.

2 SWOT Analysis of Blockchain, NFTs in Fashion Industry 2.1 Strengths 2.1.1

Tackling Counterfeits and Preserving Authenticity

The highly faced issue in the fashion industry is the circulation of counterfeits. Almost all of the luxury and fast fashion brands lose several million dollars in the market due to the rotation of counterfeits [6]. Excluding a revenue loss, this also accounts to the tarnishing of the brand’s name as most of these counterfeits are of very poor quality. With the emergence of blockchain, highly known for its near to impossible manipulation over the data in the chain, things are set to change for the fashion industry with the Blockchain [7]. NFTs can be used to create a digital passport kind of feature that could be tagged with each product that helps verify almost all details about the product like the authenticity certificate provided when someone buys a diamond [8].

2.1.2

Transparency

As the data on the blockchain ledger can be viewed by anyone on the loop with regards to that ledger, blockchain could help the fashion industry take the accountability attribute more seriously than ever [9]. Known for its complex supply chain and sourcing details, blockchain could empower all those involved in sourcing, manufacturing and distributing to add relevant data onto the ledger thereby providing the access to track all ‘raw material to ready material’ activities [5]. Apart from helping improve supply chain processes, blockchain could also help maintain sustainability standards along with preserving the rights and workers’ welfare [10].

2.1.3

Brand Engagement and Wealth Potential

With the GenZ era on us, brands have already realized the tone and vibrations associated with this generation and have taken their steps into becoming pioneers of the digital realm through blockchain and NFTs [11]. The GenZs are all about associating ability, relating ability and breaking barriers but with comfort. What the blockchain and NFTs promise, this generation is timelessness and innovation together. Major brands like LV, Gucci, Balenciaga and so on are striving to launch the best-ever NFTs to stay in the time race and account for the relativity that the GenZ want [12]. Also,

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a huge percentage of today’s population is fans of gaming and anything that could mildly tap into this sector is through the blockchain, NFT and metaverse technologies. Brands are trying to bring back royalty, heritage and culture associated with the brand’s DNA onto the NFTs thus giving exclusivity. What the NFTs offer is more than just an outfit but a whole enjoyable customer experience which is what all fashion brands are about [13, 14].

2.1.4

Intermediary Reduction

As discussed earlier, monetary transactions taking place in the event of trade between fashion brands and labels could be done via the Blockchain not only for security purposes but also to reduce or even zero out the transaction fees levied over every transaction [7]. This could be highly beneficial both for the businesses and customers, as the taboo of a minimum purchase value could be completely removed thereby giving the customer the power to buy things of any value as per their choice [15].

2.2 Weakness 2.2.1

Novelty

Although NFTs are trending with the younger generation, still a large part of the population involved both on the producing and consuming side are still not wholly aware of the technicalities and workings of the NFTs. Brands will have to work double the time to educate both their workers and consumers of which there is a whole margin of older population not so technically aware about the Blockchain and the NFTs. This would cost the brands an excess of time, energy, money and resources.

2.2.2

Lack of Regulations and Scrutiny

The blockchain and NFTs have just come into practice and still have not been regulated. Although available for use and procurement, different people approach them differently due to geographical and legal barriers. Therefore, there is a need for an international forum with a committee to draft the rules, regulations and every other ethically and feasibly right details. Only then, could the compliance be verified and this tech could be made globally standard and viable to everyone around the world.

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Adaptability

What cryptocurrency offers is highly thrilling to tech enthusiasts but a large part of the fashion sector is still run by artisans who are not so typically well versed with technological advancements but are highly skilled in their art form and still many form of those are physical, like hand weaving, hand painting and the industry is still yet unsure about how this can be transformed to an all digital situation. In one of the instances, a high-value generation occurred for the burning of a physical art piece that is not so ideal, as a physical art is always something that will provide a feeling of belonging for the customers. Also many of the designers are still dependent on physically producing their goods as well as the customers of which a major population is still interested in materialistic outfits. The adaptation could also be problematic as the public is not certain about the true nature of NFTs, its volatility factor and speculative nature, hence the transition would need to invoke more trust than knowledge before it occurs.

2.2.4

Gas Fee

NFTs differ from any other form of collectibles, which means the NFT requires a pre-launching gas fee to mint the NFT token as a fee for the energy consumed at minting the token. This might be affordable to prominent luxury brands but might be a challenge to small businesses and newly emerging fashion houses.

2.3 Opportunities 2.3.1

Brand Expansion

With NFTs taking over the future in fashion, what the blockchain-enabled component has promised for the industry is quite huge. NFT has acted like a conduit for many brands to activate a cross-sector consumer potential, as an example, brands like Gucci entering the gaming sector to publicize the brand’s DNA as well as create a new customer base called the digital customers.

2.3.2

Digital Twins

Almost all brands that entered the NFT game, used their already existing physical collections to mint an NFT series or drew inspiration from the same. This helped the brands generate double revenue as well as put the priceless tag on their old collections turning them vintage. As we have come past a good number of centuries, fashion inspiration from all those years can be utilized now to create digital twins of the same.

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Larger Audience

The NFTs are obvious at opening their area of reach to round the globe. In this way, the fashion brands would be able to share their work and collections to people around every nook and corner of the world. The collections need not just stay in Milan or Paris and are reachable only to western countries but can actually reach the east and especially Asian countries where fashion and latest trends are keenly observed and enjoyed.

2.3.4

Freedom of Expression

The blockchain has given the artists the freedom to express their art without any scrutiny or judgments. Due to the high saturation in the web space today, blockchain being authentic and non-manipulative aims at providing a greater reach that doesn’t trick someone on any other algorithm with a hidden agenda.

2.3.5

Source of Investment

NFTs are a good form of investment, one of the reasons being that it is cryptocurrency backed which in itself is used for solely investment purposes. The market is currently investing in vintage music, clothes and other collectibles that are remarkable and of which the value will increase over time. NFTs when transferred over sale may always yield a considerable amount of profit to the previous owners and creators and ultimately that is why it is considered a good form of investment [16].

2.4 Threats 2.4.1

Pull-Back

While dealing with higher values, it is natural that a risk factor is added to it. Pull back refers to the price drop that occurs after a certain speculation period [17]. There are several analyses that are done just like in stock market or investment market, but the accuracy of occurrences cannot be predicted. And since cryptocurrency is expensive, it automatically makes the NFT’s expensive as well; hence a loss might be bearable to some but unbearable to many [18].

2.4.2

Crypto-Volatility

One of the other most scary factor is crypto volatility, as crypto is ungoverned and there are no hard and fast regulations on it, the whole scenario is happening on a

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supply versus demand during the trade. Also crypto is highly subjective to fluctuations based on trends, opinions and can any time have its value rise up or stoop low [19].

2.4.3

Speculation Issues

Since there is no regulation over standard values in crypto, the price of a particular NFT cannot be fixed and solely depends on the buyer. An NFT typically is always auctioned due to these reasons as the value tier is almost impossible to be standardized and depends on what value it might hold to the potential customers. So, there are chances where someone might invest more in minting the NFTs but if they are not relatable to the target customers, its value could deteriorate gradually and bring a loss.

2.4.4

Smart Contract Security Issues

Smart contract is what helps the blockchain be secure. Thus before the trading of an NFT, the stability and intensity of the smart contract should be verified thoroughly before speculation. There are instances where a group of hackers stole a large amount of cryptocurrency from PoliNetwork due to the lack of a stronger smart contract [20].

2.4.5

IP Rights

Another major drawback is the verification of IP rights. The sale of an NFT could only provide the person with the ownership over the NFT and not over the Intellectual Property. This has to be checked and understood carefully before the sale and purchase of an NFT [21].

3 Counterfeit Battle: Blockchain Edition The most important and difficult battle that the fashion and apparel industry has to face today is with duplicate and counterfeit products. The counterfeit market has in itself grown into a billion dollar market with an ever expanding foothold around the world. According to the Global Counterfeit Report, the loss that the fashion industry has incurred amounts to about 100 billion dollars due to the counterfeits [22]. The procedural example of how blockchain could help combat counterfeit products would be to include an embedded electronic chip, which acts as a storage device and records all the minute information about an outfit, with which the consumer can quickly and easily identify the counterfeits and help reject them. The mechanism of how this is sequentially installed would be through blockchain connecting all the garment data in real time through an unchangeable ledger such as the Everledger platform

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which has view access permitted to all the allowed parties. The Everledger utilizes technological concepts such as the NFC (Near Field Communication), which allows two NFC-incorporated materials or objects to connect with each other over a short range [23]. Imagine a garment as a credit or debit card which is NFC compatible and can be used to connect to the database through something like the payment terminal that immediately provides the user with all the apparel details just like how someone initiates transactions or obtains account information once a card is swiped [24]. The IOT-enabled chips would be installed in the garments and would be recording, storing and distributing information in the cloud through wireless networks. The first person to ever test this concept was Martine Jaarlgard who in 2017 incorporated chips in his garments that were programmed to record all details from sourcing, manufacturing to retail with the label that helped the consumers to authenticate their garments. The other crucial aspect of authenticity also involves ensuring the safety of designs curated by the designer [25]. The blockchain provides the designer with an unchangeable proof of creation and helps in trade marking, licensing and initiating sales that originate and pertain to designs only. Blockchain could also ease the amount of frauds that occur when luxury brand products are thrifted [26].

3.1 Real-Time Applications: Crypto’s Combat with Dupes So, what if a duplicate product is recorded well in advance before the original? In that case, during the distribution process, the swapping of fake with originals can be identified through the differences observed between both records in the blockchain. Recently, the Italian Government invested 15 million Euros to reduce the ‘Made in Italy’ counterfeits where the duplicates amounted to a net worth of 12.4 billion Euros [27]. Tech companies are trying to utilize the above opportunity to create a solution that helps create multiple apps using blockchain technology without actually having to understand the coding functionality at the backend. Arainee, a project based in Paris, and companies like Blockchain Tech Ltd. have built a data log on blockchain similar to that of a passport that links products to the users and in that way, a customer can analyze the previous transactions carried out with the product based on QR codes, serial numbers or a microchip embedded in the product. Luxury brand, Burberry initiated a technology trial in partnership with IBM to create a prototype of blockchain-based protocol. This prototype would allow the Burberry customers to entirely know all the essentials about their products as well as register them [12]. Chronicled caters to helping the footwear section combat counterfeit through smart tag authentication. The tech company helps identify the originality of the sneakers available on the market by helping customers scan the smart tag placed on the shoes with the help of their mobile app, and the app instantly displays all information regarding the product that helps the seller and consumer to eradicate counterfeits [4]. The Aura Blockchain, a part of consortium developed by LVMH, known as Aura SaaS, is the first blockchain-based platform that helps in authenticating the outfits and other commodities designed by the luxury brands by providing an encrypted

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certificate of guarantee that records the authenticity of the product [28, 29]. Though still in its development stage, features like uploading the condition of the product before being sent to the second owner are being tested. The renowned fashion houses like Louis Vuitton, Bulgari, Hublot and Tiffany & Co. have already explored the features of the Aura Blockchain with the infrastructure being powered by tech giants like Microsoft and ConsenSys [13]. Recently, the Chinese fashion brand Baby-ghost collaborated with a blockchain tech company called VeChain that uses NFC technology where each product has its own unique ID with which the products can be authenticated [30].

4 Fashion industry’s Supply Chain: Reducing Complexity The fashion industry’s activities represent the ocean with its supply chain acting like the streams, rivers and ponds in an entirely scattered manner [31]. Now the above analogy is because at a given instant, it is difficult to track the amount of water, the speed and the existence of biological organisms in any water body. Similarly, in the fashion industry, starting from sourcing to manufacturing to distribution to retail, it is almost impossible to track any single activity or resources pertaining to the activity at any instant [32]. The complexity of the fashion supply chain also deteriorates the trust that the customers have on the brands. According to a report by KPMG, a drop of 8% customer confidence was seen with regards to non-grocery retail customers in the post-pandemic world. But what the blockchain seems to promise as a solution for this particular problem could potentially lubricate the friction that customers and brands in general experience when trying to source information from the supply chain. Currently, the stakeholders involved in the fashion industry’s production and supply are only identified based on the individual records for the same, and it is impossible to manually figure out our requirement from the millions of logs present and at the same time, these are prone to alteration and even destruction [31]. The blockchain brings all the information pertaining to the supply chain onto a single decentralized digital platform, with access only to the permissible people involved. This ensures that the data present in the records can never be lost, altered or destroyed at any given point with the ability to interpret any data required at any given instant. At this point, there might be a contradiction on how the above requirement of accessibility and readability could be achieved through a cloud or any available open source software on the internet [33]. The reason for the need of blockchain is that the data, a seller or distributor records will be protected and not prone to cyberattacks like hacking. Apart from data theft, blockchain also aims at preserving the century old craftsmanship and design techniques, which were developed by artisans as a reflection of the culture from past eras inspired by the rich art and heritage [34].

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4.1 Supply Chain Transparency and Traceability: Blockchain Era While there are many tech start-ups and brands thriving to implement blockchain in the fashion supply chain to achieve transparency and earn customer loyalty, there are few of them that have pioneered this revolution. One prominent company in this area is Provenance. The firm has utilized blockchain to develop a completely traceable data system capable of storing immutable, auditable and open information [35]. The tech was ideated to basically decode the story behind every component while also being able to track certifications, licenses and other supply chain information in a secure manner. Provenance makes sure that every physical product comes attached with a digital passport that ensures the originality and records the route of the product [36]. On the other hand, Burberry’s collaboration with IBM Blue Eternal interns leads to the development of the tool called Voyage, which enables traceability and accessibility to their supply chain through blockchain. Currently, the feature has been incorporated as a part of the app, to understand if the customers are interested in exploring more about their products. The feature also enables the user to identify products based on the country of origin, raw materials involved, art incorporated and so on. Faizod, a software company has come out with supply chain built on the blockchain that tracks finances, manufacturers, contractors and subcontractors involved, and verifies legitimacy throughout the entire process. The software makes sure that it is able to track, identify stoppages and improvise delivery transactions between the Asian, European and American countries [37]. One of the most renowned brands, H&M, collaborated with VeChain to organize and maintain order in their supply chain management system through Blockchain. Apart from the above, brands like Patagonia and Everlane are also aiming to develop a fully functional and highly efficient supply chain management system through the Blockchain [38].

5 Customer Care and Customer Interaction: Blockchain Era Fashion is a reflection of the likes and interests of the customers and the surroundings that they are a part of. So, what ultimately makes the best outfit is a best design and a best design is the emotions, sentiments, vibes and surroundings captured in the best way [39]. Early on, in the conservative fashion industry, there was always a disconnection between the consumer and the producer. Later on, fashion houses found newness in incorporating relativity into the outfits, but still they remained largely generalized. With the era of blockchain, personalization sees a huge scope [40]. Fashion Coin which is based on open blockchain platform CO: IN–CO-Creative Innovation Network promises a peer-to-peer fashion ecosystem, where the customer can interact directly with the designer, photographer, stylist and influencer with their personalized inputs [41]. Apart from personal customization, individuals can be a

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part of the entire garment-making process like designing, influencing, promotion, and marketing and even become an investor for the fashion houses and invest in their designs. Warranties and guarantees provided to relevant outfits, footwear and other fashion accessories can be recorded and distributed as tokens in the blockchain, which will help the seller and buyer to maintain a seamless interaction and management when the need arises. Promotional coupons and offers when incorporated through blockchain have the advantage of reaching a wider audience. Customer data theft is one of the most common mishaps happening in the industry these days. With the customer unaware of what might happen to their identity details, and tech giants like Google and Facebook experiencing backlash with their user data leaked and sold on unsafe platforms, it’s time for blockchain to take over the realm [42]. Blockchain will ensure that the right access is given to the right person at the right time, thereby safeguarding customer data and increasing customer safety and loyalty. The data collected as a part of implementing a digital supply chain through blockchain, can be analyzed and used as research material for marketing and branding requirements [43]. One of the best examples for the above scenario is the development of MTM Shirt 4.0 by 1trueid in collaboration with Alessandro Gherardi® which comes with a water resistant, secure tag synced with Alessandro Gherardi Su Misura app, which provides the customer with a service chatbot and invites for special events hosted by Alessandro Gherardi® [44]. This is also beneficial for the company, as the above arrangement yields real-time data through which the company can analyze and implement its plans based on the user behavior. Apart from just marketing, the customer experience elevation that blockchain enables is extraordinary. A very notable offering is the zero transaction fee feature [45]. Generally with the growing use of credit cards and debit cards, there is a certain fee that the payment portals charge the sellers for every transaction which is then passed on to the customer. What the blockchain offers to do here is to zero out those charges. Companies like Visa and MasterCard, have already introduced a feature where one can send local currencies over the blockchain and also thereby establishing a ‘direct to bank’ connection rather than paying facilitation fees to the intermediaries. Blockchain would take marketing strategies to another level [46]. With Google and Facebook dominating the online marketplaces, from where businesses have to pay to get customer information, blockchain could just end that monopoly over advertising in marketplaces. The reason being, most of these paid data that the sellers procure from either of these two third parties could be inaccurate and outdated as well. But if the businesses were to directly approach the customers by rewarding them for the access they give to their private data, it could cut the above intermediaries and boost the customer-seller relationship alongside saving the businesses’ revenue. How this can be achieved is through the smart contracts initiated on the blockchain by the sellers that need not be validated or authenticated. These smart contracts could be enabled on newsletters and ads on which when an exclusivity like rewards or offers are put, it would attract the customers to sign up and help receive authentic user data [47]. With the keyword-based ads showing up to internet users and causing disturbances to the online users making them block ad pop-ups causing a revenue loss of $35 billion dollars to businesses publishing those ads, using blockchain would be beneficial.

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What the blockchain promises is a more ‘power to the user’ type of situation where the users will have full control of viewing ads or any other form of advertising completely relevant and personalized as per their interest [48]. The blockchain could also potentially eradicate advertisement scams and fraudulent activities that come in the disguise of ads or promotional offers that robs the customers of their money when the links are clicked on. Companies like Keybase.io are aiming to provide solutions for this by utilizing blockchain to demonstrate authenticity over various media posts and social media profiles as well [49].

6 Laborers Welfare: The New Blockchain Solution The increasing demand for new collections and designs every season in a competitive market leaves the fashion moguls and luxury labels in the epicenter of exploitation with the motive of having an increase in profit percentage within a very short span of time. One among the often exploited resources includes human labor [50]. According to several reports, the cheapest paid garment laborers in the world are from Bangladesh and the astonishing fact is that they are paid less than the Bangladesh government norms and the widely noted ‘Rana Plaza Tragedy’ stood witness to their exploitation. To ensure that the laborers are treated fair, Blockchain tech companies are trying to utilize the supply chain information coupled with milestone indicators along the way to check employee welfare in regards with the time they spend on work and how it tallies with their pay [51]. Since this very information cannot be manipulated as it’s on the blockchain, and viewable by authorities, it will enhance the employee’s working experience. A perfect example of the above is by the denim mogul, Levi Straus & Co in association with Harvard University has tried to create open source software with the purpose of enabling the workers to be able to record their feedback on a live audit kind of model that will be permanently available on the blockchain. Harvard’s Sustainability and Health Initiative for Net Positive Enterprise (SHINE) center has developed the questions for the survey, of which the input provided by the laborers in real time will be available live on the blockchain enabled by CoSensys. This feature is about to be experimented in the midst of about 5,000 workers in three of the brand’s production factories in Mexico [52]. Such similar adaptations that give the right to workers and workers only would be beneficial in ensuring that these workers, be it tier 1 or tier 3, receive their rightful pay, rightful amenities and basics. Every minute detail including the building they work in and all the safety requirements with regards to it would have to be entered in the chain mandatorily when this system would be acknowledged by all major brands [10]. Sensors could be fixed to track instabilities in the equipments, machineries and buildings they use and the real-time data recorded in them could be deployed to track any discrepancies. The ledger would be structured in such a way that its access is only provided to the workers and not managers or supervisors. Instead, the access could be given to worker welfare

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associations or local governing bodies supervised by the Human Rights Commission and other such organizations that solely work towards this purpose [53].

7 Blockchain Collaborates with Metaverse Metaverse is an amalgamation of advanced technologies including artificial intelligence, virtual reality, augmented reality and 3D holography that basically put forth an alternate environment devoid of the necessity of any physical presence. Metaverse is estimated to have a scope far beyond entertainment. It is anticipated to be equally significant for professional purposes too. The reason behind why Metaverse is held up as the future is because it seems to provide a solution to today’s flaws [54]. In simplicity, when the internet first debuted, it was static and it was called WEB 1.0, its successor and a more interactive version which we currently utilize is highly interactive and is community dominant, this is WEB 2.0, but the glitch here is, uniqueness and individuality of the creations and the creators are not protected, they are pirated and duplicated, deriving any value they may have. There is nothing an individual can own in WEB 2.0 except a domain name. This is exactly what WEB 3.0, a component of metaverse aims to solve, provides ownership and uniqueness to the creations and the creators. As a creator, an individual would be completely capable of generating revenue from their creations without a middleman or brokerage involved. Metaverse could potentially unlock a new realm for the fashion industry [55].

7.1 Scope of Fashion in Metaverse Metaverse is a long- term investment that the fashion industry is making to make it relatable to the future generations. Corporates like Fabricant, RTFKT and DRESSX have amplified the incorporations of digital fashion in blockchain and are bringing it to commercialization. While the development is not completely detached from the physical world, there are apps like Aglet, that aim to bridge the physical and the virtual world [18, 56]. The basic idea of the app is to bring talent from all around, no matter the age, background of the designer and popularize it, such that footwear giants like Nike and others end up manufacturing it. From being known for overproduction and non-sustainable nature, the global pandemic has pushed the fashion industry to rethink and re-imagine products in a way to sell creative designs and art rather than just clothes [19]. The future is virtual and the brands having realized this are progressing towards making a mark in metaverse, the future fashion pit stop. D2A, direct to avatar, is a business model, where digital designs and outfits are sold to avatars or digital identities only. This makes the whole complication involved in supply chain management simple. This technology is the future, mostly because of the target generation, who care about the environment, authenticity and creativity.

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The other important aspect includes the fact that metaverse has no constraints as in the physical world and so anything as a part of metaverse is constraint free [57]. Beyond pleasing the eye and elevating the look, clothes in the digital age are designed to do much more. They are structured to shape themselves in various dimensions, color and alter according to the emotion or the intention of the individual in it [58]. Every trend set was an evolution from something basic. Such is the role of gaming in the evolution of virtual fashion. Gaming has become the socializing spot for youngsters today and due to the growing number on these platforms, the need to be unique has emerged and that’s where virtual fashion comes to aid. Burberry developed a multiplayer game called B-surf, where players can get dressed in the latest Burberry Garb [59].

7.2 Luxury Brands: Investing in Metaverse Through Blockchain There are multiple brands that have already invested in metaverse including NVIDIA, Facebook and much more. At the same time, there have been Indian startups, which are also pioneering in the metaverse technology. Bolly Heros, One Rare, LOKA and few others have created virtual environments. For instance, in bolly verse one can write, act and direct film offering three types of NFT such as, Legend BFT, Hero NFT and Real NFT [60]. In case of one rare, the concept is to cultivate the right ingredients that make up a player’s favorite food, which gets unlocked as NFT’s. LOKA has real-life places created from various cities in an alternate place, where one can simulate near life experiences. Interality lets you create situations and drop them in the form of 3D holograms, combined with AR. All these platforms, devoid of what they offer, mandatorily involve an avatar, the potential of which the fashion industry could utilize. NFT’s have been in metaverse, mostly pertaining to art but has now come to the fashion arena [61].

7.3 Current Status of Metaverse in Luxury Fashion While online shopping has become the niche for many shoppers worldwide today owing to the busy lives and the pandemic, the luxury brands find e-commerce ignorant to what these brands have to offer. Luxury brands are not all about the clothes they design and want to be acknowledged for the wholesome indulgent experience they offer, which is not possible with e-commerce sites. Hence, the metaverse might be the perfect fix for this issue. The first step towards adapting metaverse has already begun for the luxury brands. Luxury brands like Louis Vuitton, Balenciaga, Gucci are optimizing gaming platforms as an alternate option for their in house fashion shows and have been receiving an arousing response with instances like Louis Vuitton

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collaborating with league of legends to launch their capsule collection, which sold out in less than two hours. The transition into the metaverse can be gradual, by experimenting with different components that will be present in the metaverse [62]. For instance, Ralph Lauren is launching several campaigns and experimenting with social media such as Snapchat, before it steps into metaverse. Levis is utilizing Squad, as a part of its experiment with AR. Squad enables a group of people to shop together. Brands could explore creating their own video gaming or partnering with ones already having a huge following, or invoking their own CGI influencer model, to prepare themselves for the Metaverse environment. Crucible has an association called ‘Blueprints’, that allows individuals to have the same digital identity across multiple platforms, and when this development is complete, this may evolve to be the one stop for all brands wanting to represent themselves in Metaverse. Metaverse is completely digital, thereby allowing a new form of expression through fashion available there. This is exactly why there could be a surging demand for fashion designers, as everyone in the metaverse would want a unique representation every time they’re involved in the environment. The most vital understanding required to be successful in the metaverse for a fashion designer is that all digital clothing should possess all physical detailing, such that it looks as convincing as garments in reality [63].

7.4 Future of Luxury Fashion with Metaverse A plethora of outfits could be created as unique assets through NFTs incorporating AI, thereby elevating the standard of fashion present in the metaverse environment. Roblox is the smaller idea, to the larger metaverse picture. With an active 46 million users per day, Roblox has emerged as an attractive platform for both buyers and sellers [64]. Designers can earn by creating outfits and looking for the avatars which the users procure. The key to evolve successfully is by co-creation. Fashion designers could collaborate with designers already familiar with Metaverse, like Gucci who collaborated with cSapphire and Rook Vanguard, creators of Roblox. The other most important thing is to ideate based on creativity and give the unimaginable experience to the user [65].

8 Fashion–Blockchain–Gaming: The Triangle Over the years, the influence pop culture has on Gen Z and their choices have increased enormously. With commercial games like PUBG and Fortnite building an enormous fan base for them, various e-commerce and local brands have created merchandise and tapped into a huge potential. The unexplored sector of this genre is the avatars that could possess a huge advertising potential [66]. A great example of this would be Puma signing a deal with League of Legends to dress the avatars

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of the game in Puma jerseys. This decision comes from the analysis where 85% of the brand’s male customers are gamers who are influenced by the attributes of the game including clothing and other merchandise. Same is the case for female gamers, which is growing dramatically and this resonated when Valentino, Anna Sui and Marc Jacobs created a highly sophisticated, game exclusive look. Luxury Fashion is also entering the realm with their innovative ideas. Gucci recently invoked a ‘Gucci Garden’ resembling their original in Firenze, Italy in the famous virtual game ‘Roblox’, with a wide range of their digital collectibles, sold using the game’s currency, Roux [67]. The best part about all of this is that this digital clothing uses 0% physical materialistic resources and is the most sustainable way to enjoy fashion. The unannounced pandemic and the grievances it brought along, indirectly forced almost all industries in the world to accept digital transformation that involves minimal to zero manual intervention. As for the fashion industry, which is known to employ 3,384.1 million people according to Fashion United, faced turbulence when it went through the digital transformation phenomena but nevertheless, emerged as a clear success. The three most indigenous components common to the whole fashion industry are runway, models and seasonal designs. While the designs did not suffer a major setback, the place and the people involved in showcasing these designs did take a major hit [68]. Nonetheless, Fashion houses and brands like Khaite adopted a rather seamless and innovative approach by presenting their collection using the augmented reality technique that incorporated a QR code for the attendees, functioning like an entry pass that gave the attendees access to the house’s new season collections in the form of 3D renderings, all while making them feel as if they were really present there, while they couched up in their living rooms and most importantly it gave every potential buyer more time with the collection contrary to the conventional runway shows [69].

9 NFTs: Digital Fashion and Luxury Brands One of its kinds, 3D printed garments were traded as NFTs by Danit Peleg. This works such that you could procure the NFT as a file, download and 3D print it, completely ensuring authenticity. These could be purchased with a lifelong access and could even be sold in secondary markets. NFTs could be created, minted and even worn these days. A fitting example would be the Indian Fashion NFTs created by Brooklyn Based creator, Ravi Guru Singh, in collaboration with DIGITALAX, and what makes it special is that he is not a fashion designer by profession and background and this proves how accessible and simplified fashion is in the metaverse [70]. NFTs are also sustainable because of the authenticity it has, which disables cheap duplicates, owing to the strong security protocols imposed in the Blockchain sector. The preference of NFTs arises from the scarcity and uniqueness that it creates for high valuables, defending the threat of duplicates and pirated copies. Non-fungible Tokens (NFT) have been modified as gift cards and authenticity certificates and

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retailers could procure a minimal transaction fee when customers use these NFTs to check authenticity [71]. Luxury fashion brands have also ventured into blockchain, primarily to stop the circulation of the counterfeits of their products. Louis Vuitton, Cartier and Prada formed a platform called ‘Aura’ through which Louis Vuitton plans to create digital codes to verify the authenticity of all products sold under their name and also give out all details about the product. The value of an NFT truly relies on proving ownership over it [72]. There are several other features why NFTs and the blockchain are a perfect upgrade for the fashion industry as well. One of which includes the NFT mystery box, where the collector is ready to pay a fixed price for the box, unaware of the contents in the box. It could be collectibles worth millions or normal ones similar to the ones hoarded by the fellow collector [73].

9.1 Tech Start-Ups into NFT Brands like Auroboros have already adapted to the genre, with Auroboros presenting their digital only, ready to wear 14 piece NFT collections at the London Fashion Week. The most interesting part about this collection is that their launch is also in a digitech manner, completely adapting the ‘Digital Fashion’ theme. A fusion of virtual reality, with the institute of digital fashion creating a billboard with an augmented reality try on experience powered by snapchat is what Auroboros presented at their launch. While 3D and virtual fashion might seem to alienate us from the real, physical and natural world, the brand has found a way to tap nature into technology, giving birth to nature tech, as part of which Auroboros has come up with a clothing line, which mimics the blossoming of a flower. As much as materialized clothes and outfits are enjoyed, the idea of clothing being completely utilized in the digital space is also becoming a huge possibility these days which sets the tone right for the procurement of NFTs. Outfits that might be difficult to wear in reality or the ones that are purely for the purpose of art and entertainment could be produced completely digital, such that it preserves time and reduces the debris generated. DRESSX is a complete virtual NFT backed fashion marketplace housing some of the best designs by acclaimed designers from all around the world [74]. Concerning the commercialization of digital clothing, brands like H&M, have been quick to adapt to the idea. The brand launched a billion dollar, virtual design line-up powered by Mackevision, an Accenture component that created a digital model with CGI character design technology [75]. The digital clothing has gained an arousing response among the consumers, with the Iridescence Digi Couture Dress by Fabricant sold for $9,500 [35]. Stretching beyond clothing, RTFKT, brand specializing in digital sneakers and other accessories is also available in the fashion market as a part of DRESSX. The designs of fabric are available in DRESSX, where the shopper uploads a picture of themselves and the digital garment is suited onto the picture, ready for them to share on social media.

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9.2 Case Studies on NFTs: Luxury Brand Edition 9.2.1

Louis Vuitton

Hailing as one of the world’s most prestigious and authentic brands primarily known for taking luxury to the next level, Louis Vuitton has always embraced timelessness by adopting new trends and technologies but in its own unique way. LVs take on blockchain and NFTs while recalling several of its integration of the above is rather fantastic. A very notable one being the amalgamation of gaming, blockchain and NFTs, making it GenZ curios. The game is a strategic orientation that reflects the brand’s heritage and journey through the years. The game is basically an exploration of the legendary journey that Louis Vuitton made as a 14-year-old boy. The game includes a character called Vivenne, designed with an LV monogram. Vivienne, the mascot, is named after the signature VVN leather, light brown-beige in color that fades dark overtime. Vivienne embarks on a journey to discover 200 collectible candles to six different locations inspired by Beijing, London, Tokyo, Paris and New York, which transforms to 200 postcards that reveal interesting stories about Louis Vuitton’s life, family mansion and so on. The players are given 30 NFTs among which 10 are designed by Beeple Winkleman who sold the most expensive digital artwork in 2021 with Everydays accounting to $69.3 million [61].

9.2.2

Gucci

Gucci has been experimenting with digital fashion and blockchain for a long time now. Be it movies or gaming or e-commerce, Gucci has tried it all. Gucci ventured into the world of Blockchain and NFTs in June 2021 with its first minted NFT, a derivation of the inspiration of its famous video, Gucci Aria. Auctioned on Christie’s platform, Gucci was hailed as the first luxury brand that made an NFT launch through Christie’s. The NFT is a 4-min-long film titled ‘PROOF OF SOVEREIGNTY: A Curated NFT Sale by Lady Phoenix’ that was directed by the filmmaker Floria Sigismondi in supervision of the creative director of Gucci, Alessandro Michele. This includes the artwork created by means of digital animation from Gucci Aria, the recent fashion presentation of the brand. Gucci Aria was launched grandly, on the eve of the 100-year anniversary celebrations of the brand, portraying the legacy of the brand in the video, laying the perfect foundation for Gucci’s first NFT. In September 2021, Gucci created an e-commerce concept store called GucciVault which houses vintage Gucci products spanning a period of ‘60s to 90s’. The store also has rejuvenated vintage products being sold as an ode to iconic collections from the past. Alongside these, it also has collections from few fresh talents that have come under recent spotlight interactions. Gucci also plans on developing the virtual real estate plans as a part of its sandbox acquisitions in metaverse of which the transactions will be powered by blockchain. Recently, Gucci collaborated with Superplastic to create SuperGucci, a three-part series of ultra-limited NFTs curated

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by Gucci’s creative director Alessandro Michele and renowned synthetic artists, Janky and Guggimon. These NFT collections are to be released in waves through SuperGucci fulfilled by Gucci Vault. The first wave will have 150 NFT collectibles exclusive through NFT Superplastic and the second wave exclusive for the Gucci discord community and the last wave drop with 200 NFTs open to the public. Each NFT includes house codes from the Gucci Aria collection along with an 8-in. tall SuperJanky and Superplastic white ceramic artifact specifically made by ceramists in Italy. Gucci also collaborated with the Tokyo-based digital artist Wagmi San to create a 10KTF virtual shop featuring distinct NFT collections like Bored Ape, World Of Women and so on called the Gucci Grail. The crux of this initiative is the reachability, the brand created by picturing the collaboration between these high-profile individuals in the form of avatars [61, 76].

9.2.3

Adidas

Apart from Gucci, Adidas also believes in creating its own universe in the digital realm with the latter acquiring 144 parcels of land in the Sandbox metaverse. Adidas originals launched its collection of NFTs in association with BAYC, G Money and Punk Comics that can be consumed both digitally and physically. As an initiative to create curiosity, Adidas dropped a special edition of NFT badges. About 8,000 of those badges were distributed and the brand later announced that the owners of these NFTs will be eligible to possess exclusive Adidas Original Designs, both digital ones for the metaverse and the physical ones to be styled in the real world [19].

9.2.4

Burberry

Burberry, the British Fashion legend is approaching fashion through blockchain in a very unique way. It has tapped into a very interesting sector of population, thereby clearly redefining the whole ‘fashion yielded through blockchain’ experience. Burberry is collaborating with Gaming platforms to advertise its collections through the avatars that appear on the games. The Brand decided to launch in-game NFT collections. Burberry’s collaboration with Blankos Block Party, a game on the block chain has proved to be a very successful collaboration. These characters on the game, called the blankos, are digital characters in the form of NFTs, which can be bought and sold over the ‘party market’ using blockchain. Burberry launched its collectibles for these digital characters, which has been going viral since it launched and the brand plans on further rolling out accessories for the same [61].

9.2.5

Karl Lagerfeld

The fashion designer who was a very prominent figure in the industry was well known for the crucial roles he played in famous luxury brands including Fendi and

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Chanel. After leading Chanel successfully for 36 years, he started his own brand. After his demise in 2019, the brand’s team decided to pay a tribute to him by minting NFTs and releasing them on his birth date. With seven being the lucky number of the brand, the NFTs were launched in three phases with the first phase being a drop of 777 collectibles priced at 177 Euros each. The second phase launched 77 collectibles with 177 Euros per NFT and the last with 300 collectibles with 77 Euros per NFT. The NFTs were inspired by Karl’s look and his predominant saying, ‘I’m like a caricature of myself, and I like that.’ The NFTs were of two types, one being the Chromatik Karl and the other being the Ikonik Karl. The customers could share them on Twitter, flaunt them through AR on snapchat and or have the masterpiece as an NFT collectible to trade over the blockchain to other art enthusiasts [19].

9.2.6

Dolce and Gabbana

The renowned Italian Fashion Luxury brand stepped into the fashion realm with an exclusive limited nine specimen NFT drop in collaboration with UNXD, a successful organization involved in the creation of digital assets. These NFTs were based on the rich culture and heritage of Venice and were named Collezione Genesi. They were unveiled at the D&G shows, Alta Moda, Alta Sartoria and Alta Gioielleria from August 28 to August 31, 2021 in Venice. Conceptualized by the founders, Domenico Dolce and Stefano Gabbana, five out of the nine pieces are iconic physical creations, virtually replicated by UNXD. The physical classics include two versions of ‘The Dress from a Dream’ in silver and gold, a stunning emerald-green men’s suit named as ‘The Glass Suit’ and a gold plated duo along with a silver crown titled as ‘The Lion Crown’ and ‘The Doge Crown’ respectively. Shashi Menon of UNXD reveals that the digital approach undertaken by D&G is not only about technological advancements but an elevation of preserving the brand’s rich heritage and grandeur through exclusivity. As anticipated, the debut D & G NFT collection was a huge success. It clocked revenue of 1885.7 ETH that approximately accounts to $5.7 million USD. Red DAO (fashion-focused decentralized autonomous organization) bagged the ‘The Doge Crown’ for $1.27 million USD and it was the highest buy at that time when auctioned in the UNXD platform. After a successful taste with digital technology and blockchain, Dolce & Gabbana now plan to unveil its own NFT community called the DGF family, where it aims to build a customer base powered by the Metaverse [19].

9.2.7

Jimmy Choo

The prestigious and well-acclaimed Asian fashion brand known for its exclusive handmade women footwear decided to make its mark in the digital space in association with New York-based artist, Eric Haze. The brand’s NFT drop was one of a kind with the NFT auction taking place in addition to 8888 mystery boxes in the Binance Market Place. The one of a kind amalgamation of art, street culture, and fashion

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with a tinge of pop reference gave rise to unique animated artwork sneakers. These sneakers with rotation along with Haze’s signature script were digitally imparted in the NFTs. The launch of the digital sneakers occurred through the procurement of the 8888 mystery boxes. The digitally animated sneaker NFTs were in random assigned to each mystery box and were signified upon four levels of rarity and exclusivity. It includes a super super-rare card, 445 super rare cards, 3109 rare cards and 5333 neutral cards. The buyers were made to do blind purchases not knowing what cards they bought. The mystery boxes were launched on October 20 on Binance marketplace for 30 Binance USD (or 13,672 USD at that time) and whoever got the SSR and SR from the mystery box were eligible to receive a super rare NFT design by Jimmy Choo random NFT of which only 100 have been minted till now. The project was perpetuated culturally to uplift the vibe of the products by means of digital art and marketing. The other agendum was to dedicate all proceeds from the auction to Jimmy Choo foundation in support of women which is a non-profit organization focused on supporting women survivors of wars, rebuilding their lives [19].

9.2.8

Krigler

Krigler, the luxurious perfume model founded by Albert Krigler in Berlin in 1904 with its popularity spanning since the 1920s is adored by the world’s famous celebrities and members from the royal houses. Krigler has to its treasured legacy of more than 600 unique perfumes, of which only a segment is available currently. With growing indulgence of luxury brands in the NFT sector, Krigler is the latest to join the queue. Krigler came up with one of a kind leasing or renting program via which the customers can procure an old signature fragrance limited for a year’s access. The brand associated its leasing/renting program alongside an NFT drop in June 2021. The NFT is a digital video that highlights the history, intricacies and minute details of the leased perfume. The head of Krigler believed that the creation of digital video as an NFT is an authentic way to describe the fragrance and the primary inspiration behind the creation of perfume and a legitimate way to give artistic ownership certificate to the consumers. The famous perfume of Krigler and the associated NFT ‘Krigler Grand Bonheur 54’ is a scent that was initially launched in 1954 for Greek banking inheritor as his wedding scent. The cost of perfume and its NFT was initially $8000 but later the valuation rose to about $150,000. The bidder got the ownership for a period of 12 months. The idea behind the brands dive into NFTs and blockchain was to preserve the legendary scents along with rich heritage and culture incorporated in them, as a memoir for the elegance that they have imparted for almost a decade now and what better way to achieve it than through digital technology [19].

9.2.9

Jacob & Co

Jacob & Co., a very prominent luxurious jewelry and watch brand is predominantly known as the street wear jeweler. Founded back in 1986 by diamond designer Jacob

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Arabov, Jacob & Co. has always been an innovative and explorative brand dipping its toes into advanced technology. Once the emergence of blockchain technology occurred, Jacob & Co., became the first luxury brand to transition into the NFT world in April 2021. Being the first luxury brand stepping into NFT, the brand’s founder expressed his interest saying, “My hope is for Jacob & Co. to become the first luxury brand to launch a successful NFT and pave the way for other luxury brands to start launching products & collections through NFT. It’s not a matter of ‘if’ NFT’s will have a place in the watches and luxury world, but ‘when.’ For Jacob & Co., the ‘when’ is now, and we are prepared to pioneer this shift.” The first NFT project of Jacob & Co. was a very unique digital piece named, ‘NFT SF24 Tourbillon’ in partnership with one of the trending and famous NFT platforms, ArtGrails. The NFT was launched at a 5-day auction from April 4, 2021 with an initial bid of $1000. The brand’s first digital asset is a replication of its own watch Epic SF 24 which was mind blowing and one of its kind travel watch mounted with a traditional split-flap timetable display that lists 24 cities in the globe and is often displayed at airports. But, unlike the Epic SF24, this new version of watch based on NFT includes the functioning of a tourbillon and in place of cities, the split-flap system displays the top 10 various cryptocurrencies including Bitcoin, Ethereum, Fantom and so on in form of a short animation with duration of 10 s. The highest bid recipient received physical trappings of the distinctive digital asset of the brand like the certificate of the possession and a casing. In addition to basic information such as manufacture date and time, company (parents) and product type, this identity allows the watch to be authenticated on the Internet as a ‘Trusted Object’ and shows its originality. The box of the watch also contains the hard drive with the NFT that is the digital representation of the watch. The owner will be able to re-sell the watch and NFT after the auction and can facilitate transfer of the ownership to any person he wishes. The unique and digital piece of watch by Jacob & Co. was auctioned for 24 h on the ArtGrails NFT platform and collected $100,000 at the end of the bid [19].

9.2.10

Bulgari

Bulgari, the opulent Italian luxury brand famous for its jewelry, fragrances, watches, leather goods and accessories has always stayed ahead of time and traveled with the advancements in technology. The world renowned, 137-year-old brand is venturing into the digital world to launch its first NFT art piece by replicating its famous Serpenti snake into a digital artwork powered by AI. For the brand’s first ever NFT venture, the Rome-based jeweler, Bulgari, collaborated with the award-winning artist Reflik Anadol to create an explicit piece of digital art which is anticipated to be the first ever artificial intelligence backed artwork for any luxury brand. The iconic snake design of the brand amalgamated into the virtual metaverse will be auctioned as an NFT in the near future. The purpose of the artwork is to benchmark the development of Serpenti and is also referred to as ‘Serpenti Metamorphosis’. A dynamic 3D sculpture created by media artist Anadol added 70 millions of pictures of plants and nature in order to develop the first artificial intelligence-backed artwork for Bulgari. The artist

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being very interested in AI, believed that it could blend various patterns, shapes and structures giving rise to our imaginations in a visual form. The artwork has been inducted at Piazza Duomo of Milan providing a multisensory experience, from the ceiling to the entire wall thereby presenting the AI-based digital art. Pertaining to the sculpture, the snake images breathe life in, which is an additional feature to the brand’s emblem made possible because of AI and Machine Learning. In addition to the visual treat, a holistic experience was imparted to the scenario by diffusing the brand’s famous fragrance, the scent of Rainforest Serpenti, in real time thereby complementing the NFT masterpiece. In order to celebrate the Serpenti collection, the masterpiece was rallied across several cities and the whole experience in itself has been turned into a multi-dimensional piece of NFT which will be auctioned in the days to come [19].

9.2.11

Hermes

Hermes is an eminent French luxury fashion brand established in 1837 by the great Thierry Hermes with the brand specializing in leather goods, ready-made outfits, lifestyle accessories, perfumes, jewelry and watches. The brand stepped into the NFT era, with the creation of a ‘Baby Birkin” which is an animated video of a little baby growing up in the Hermes popular and notable designer bag called Birkin. The auction of this pixelated and animated NFT was conducted on the famous platform, Basic.Space. The artistic work of NFT was created by two artists named Mason Rothschild and Eric Ramirez based in Los Angeles. These two highly skilled artists embarked on a journey to convert the iconic Hermes’ bag, Birkin, into a virtual treat as an NFT called the ‘Baby Birkin’. With their unique design, the duo expresses, ‘the NFT version of virtual bag is rarer than any physical bag’. This mind-boggling NFT of the virtual bag is a transparent 3D spectacle that features a 2000 × 2000 pixel animation of a 40 week pregnant that is a 25-cm growing fetus accompanied by a space-like themed backdrop and with an apt song. As the baby grows, it moves gracefully inside the bag, which throws out newness to the eyes that watch. The ‘Baby Birkin’ NFT was auctioned on the Basic.Space platform for a week starting from 13 May 2021. In total, about 32 bids were placed, and the Baby Birkin was sold out for $23,500 to Aki Hayashi who placed the bid four times on the virtual bag, before finally winning the bid with the amount of $ 23,500 [76].

10 Future of Blockchain and NFTs The blockchain and NFTs have surely shaken the fashion world with limitless opportunities as well as with some amount of uncertainties as well. But what is believed to be a revolutionizing technology, it is yet to be utilized to its full potential. The powerful tech is capable of constructing a whole world on its own, where people can experience fashion rather than just buying it. With several marketplaces already

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existing like the OpenSea, Foundation, Nifty getway, Basic.Space etc., primarily designed to elevate the user experience, shopping for outfits, footwear and accessories is going to be so interesting. The blockchain could enable communities where people from different parts of the world could associate based on interests, meet on the metaverse and exchange/trade using the NFTs. Since an NFT can literally be anything, it provides people with the opportunity to share inspirations, fictions and tales, visuals, music and any other form of art as long as there are audiences that are going to find those relatable. A piece of clothing or footwear can be elevated from just being a mere object of shape, design and color to things that are conduits to expressions, experiences, basically breathing life into them. For instance, the buyer of the Jack Dorsey tweet compared his purchase to that of buying the Mona Lisa painting. The blockchain and NFT-backed metaverse is about to see a rise in digital clothing up to $50 million by 2030, a study conducted by Morgan Stanley reveals. With the pandemic making the virtual world more real than ever, it is time for fashion to utilize that potential to deliver its product [59].

11 Conclusion The blockchain is a very immersive and innovative tech stream with a lot of elevating opportunities especially with all positive factors especially for the fashion industry. The security, exclusivity and authenticity that the technology offers are commendable. The NFTs as a part of the blockchain provide innumerable opportunities to the fashion industry as a segment of exclusivity, as an investment token, as a highly secure component and much more. As much as the advantages, there are also certain blind sides that may fade the good experience that the fashion industry might have with the crypto and blockchain world. With already several giants from the fashion industry making their mark in the blockchain, the industry’s use of Blockchain is set to boom now. From launching the brand’s designs to its legacy, the NFT will do it all. The various test cases discussed above are a sign of significance of the NFT’s capability to catalyze the brand’s digital growth. The part that requires grooming is the awareness, the workers and customers have towards such holdings as well as the governance and standardization required along with the regulations that are to be enforced to ensure a very fair trade.

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60. Khan SR (2022) Transforming through blockchain apparel [Online]. Available from https:// www.textiletoday.com.bd/transforming-blockchain-apparel/. Accessed on 20 April 2022 61. Dawda J (2022) Gamers in the virtual fashion space [Online]. Available from https://timesofin dia.indiatimes.com/life-style/fashion/buzz/gamers-in-the-virtual-fashion-space/articleshow/ 90209844.cms. Accessed on 20 April 2022 62. Segura A (2018) The fashion retailer blockchain in fashion retail [Online]. Available from https://fashionretail.blog/2018/06/04/blockchain-in-fashion/. Accessed on 20 April 2022 63. Fashenterprises (2021) Digital fashion, a solution or a distraction? [Online]. Available from https://fashenterprises.blogspot.com/2021/12/digital-fashion-solution-or-distraction.html. Accessed on 20 April 2022 64. Rodgers D (2022) What to look out for at the first ever Metaverse Fashion Week [Online]. Available from https://www.dazeddigital.com/fashion/article/55742/1/first-metave rse-fashion-week-decentraland-crypto-grimes-auroboros-hugo-boss. Accessed on 20 April 2022 65. Stockhax n.d. Fashion designers are bringing crypto currency to the masses—Stock Hax [Online]. Available from https://stockhax.com/blog/fashion-designers/. Accessed 20 April 2022 66. NFTee (2021) Is blockchain technology set to revolutionize the fashion industry? [Online]. Available from https://nftee.ai/2021/10/20/is-blockchain-technology-set-to-revolutionize-thefashion-industry/. Accessed 20 April 2022 67. Birch K (2022) Top 10 NFT marketing initiatives by leading brands in 2021 [Online]. Available from https://businesschief.com/digital-strategy/top-10-nft-marketing-initiatives-leadingbrands-2021. Accessed 20 April 2022 68. Lee A (2022) A preview of brands’ offerings for Decentraland’s metaverse fashion week [Online]. Available from https://wwd.com/business-news/technology/exclusive-preview-dec entralands-metaverse-fashion-week-1235139111/. Accessed 20 April 2022 69. Meyers T (2021) REKA talks metaverse apps, future of fashion selling NFTs [Online]. Available from https://wwd.com/business-news/business-features/reka-metaverse-future-fas hion-selling-nfts-1235019390/. Accessed 20 April 2022 70. Lee A (2021) What are NFTs, why should fashion care and will this bubble burst? [Online]. Available from https://finance.yahoo.com/news/nfts-why-fashion-care-bubble-110 013429.html. Accessed 20 April 2022 71. PVH, Tommy Hilfiger joins the first-ever decentraland metaverse fashion week [Online]. Available from https://www.pvh.com/news/tommy-hilfiger-metaverse-fashion-week-2022. Accessed 20 April 2022 72. Kelly D (2022) Decentraland to host first-ever metaverse FashionWeek [Online]. Available from https://hypebeast.com/2022/2/decentraland-first-metaverse-fashion-week-info. Accessed on 20 April 2022 73. Lou X, Little TJ (2021) New thinking about blockchain in the fashion industry. J Textile Apparel Technol Manage (JTATM) 12 74. Varshney N (2022) Six traceability solution providers that are making fashion supply chain a better place to operate [Online]. Available from https://in.apparelresources.com/businessnews/sustainability/six-traceability-solution-providers-making-fashion-supply-chain-betterplace-operate/. Accessed on 20 April 2022 75. Andrew F (2021) Smart collectibles: unlocking the value of non-fungible tokens [Online]. Available from shorturl.at/hrP16. Accessed 20 April 2022 76. Bakshi S (2022) Fashion in metaverse—Fibre2Fashion [Online]. Available from https://www. fibre2fashion.com/industry-article/9352/fashion-in-metaverse. Accessed on 20 April 2022

The Future of Blockchain for Wastewater Treatment in the Textiles Industry B. Senthil Rathi and P. Senthil Kumar

Abstract Industries and domestic use a majority of water on a daily basis, causing water scarcity. Water consumption by industry is increasing every day. Recyclable wastewater can minimize water demands from local water bodies, improve availability of water, reduce waste disposal and pollutant loads, cut thermal energy usage, and perhaps reduce overhead expenses. The produced effluent has been recycled in a variety of methods. Because textiles poorly absorb dyes; the textile industry utilizes synthetic dyes that are available in a wide range and produces vast volumes of highly colored effluent. This brightly colored textile wastewater has a considerable negative impact on plant photosynthesis. It also has an influence on aquatic life due to lower penetration of light and oxygen consumption. Blockchain is a breakthrough innovation that started with cryptocurrencies such as bitcoin and has subsequently extended outside banking and finance. Blockchain technology is an Internet database technology used to record information and contracts across a timeline. Distributed ledger, often known as blockchain technology, is distinguished by its decentralization, transparency, and openness, permitting anybody to maintain information in the database. Smart wastewater treatment plant has long been a prominent topic. It is often deployed as part of a data-scheduling platform that includes sophisticated algorithms. The aim of this chapter is to examine the various treatment options for textile wastewater, as well as blockchain technology in the treatment process. It also addressed the application of blockchain in different sectors, recent advances, and future perspective of blockchain in wastewater treatment. Keywords Blockchain · Textile industry · Smart wastewater treatment · Dyes · Distributed ledger B. Senthil Rathi Department of Chemical Engineering, St. Joseph’s College of Engineering, Chennai 600119, India P. Senthil Kumar (B) Department of Chemical Engineering, Sri Sivasubramaniya Nadar College of Engineering, Chennai 603110, India e-mail: [email protected] Centre of Excellence in Water Research (CEWAR), Sri Sivasubramaniya Nadar College of Engineering, Chennai 603110, India © The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd. 2022 S. S. Muthu (ed.), Blockchain Technologies in the Textile and Fashion Industry, Textile Science and Clothing Technology, https://doi.org/10.1007/978-981-19-6569-2_5

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1 Introduction Textile effluent is a rich source of colored contaminants, which increases the environmental risk. As a result, the presence of color in textile effluent is a key problem for researchers today [28]. The textile sector is among the world’s major consumers of freshwater [15] and its effluent comprises a variety of contaminants such as heavy metals, desizers, dyes, degradable organics, detergents, stabilizing agents, and inorganic salts [10, 64]. Effluent is a significant ecological barrier to the growth of the clothing industry, in addition to other minor issues like disposal of solid waste and resource waste. Because fibers poorly absorb synthetic dyes, the textile industry utilizes a wide range of synthetic dyes and generates vast volumes of brightly colored effluent [31]. The textile sector is noted for discharging massive volumes of wastewater tainted by a wide range of chemicals. A dye factory contains multiple units that create various types of industrial effluent, some of which operate in batch process. As an outcome, the intensity and timing of the effluent composition vary greatly. As a result, textile wastewater treatment can be quite complex [55]. An electrochemical approach is being researched for the treatment of textile wastewater from various dyeing process factories [46]. Textile effluents are believed to be extremely non-biodegradable in both natural and wastewater treatment plant environments. Ozonation, on the other hand, can be employed to improve the biodegradability of bio-resistant substances. In laboratory-scale experiments, the hybrid model of ozonation and, subsequently, microbial degradation of both synthetic and actual textile wastes were investigated [25, 57]. Textile wastewater treatment method that uses coagulation/flocculation procedures with ferrous sulfate and/or lime to destroy the color of the effluent [26]. The decentralized big data and transaction concept designed as “blockchain” was primarily developed for the bitcoin cryptocurrency. There has been an increase in interest in blockchain technologies since it has been initially introduced in 2008. Blockchain’s central characteristics, which improve security, anonymity, and integrity of data without allowing a third-party institution to regulate transfers of money, account for its significance. As a result, it produces interesting research fields, especially in terms of technological challenges and limitations [83]. Many view blockchain to be a disrupting core component. Despite the fact that many scholars have recognized the significance of blockchain, research is still very much in infancy [80]. A blockchain is an organized collection of nodes and connections, with the nodes storing data and being connected via chains. This technology, which originally gained popularity with cryptocurrencies, enables the availability of a publicly recorded transaction ledger [27]. The benefits of blockchain include continuous authenticating, data protection, privacy, resistance to assaults, ease of implementation, and self-maintenance [22]. Blockchain technology has the potential to automated bitcoin payments and gives decentralized, safe, and trustworthy accessibility to a public ledger of information, activities, and documents [63, 68]. Blockchains offer open, tamper-proof, and safe platforms that, when paired with smart transactions, can allow revolutionary business solutions [5]. Furthermore, most current security

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technologies have concentrated on a few characteristics while failing to acknowledge resilience, data integrity, scalability, traceability, network latency, auditability, and storage systems. Blockchain technology would be one of the answers to the mentioned challenges [13]. One field where blockchain is predicted to have a large influence is health care [3, 35]. For industrial effluent control and reporting, a blockchain-based approach is developed. Utilization of blockchain technique for industrial effluent management helps multiple parties, like governmental institutions, international protection of the environment groups, and industries, supervise industrial waste and even environmental protection from the hazards caused by industrial waste [30, 76]. Blockchain technique is used for data storage and the development of an economic scheme to promote wastewater reuse. Tokens are distributed to enterprises based on the amount and quality of reclaimed wastewater [34]. These token rewards are issued and earned based on cumulative hazardous waste emitted into groundwater as a by-product and rigorous surveillance of water quality standards (after cleanup) using smart sensors. The creation of this token currency is accomplished by swapping ether [36]. This chapter’s objective is to investigate several alternative treatments for textile effluents, as well as the blockchain methodology for textile wastewater treatment plants. It also discussed the implementation of blockchain in various industries, as well as current advancements and the future prospects of blockchain in wastewater treatment.

2 Wastewater Treatment in the Textiles Industry The textile sector is among the quickest growing sectors and contributes significantly to economic progress [1]. Unfortunately, this company relies on water, which resulted in a lot of dirty wastewater being produced. A significant environmental issue is the release of dyes into the atmosphere during the dyeing and finishing of textile fibers [84]. Chemicals released into the atmosphere are inhaled by us or deposited via our skin, causing allergic responses and potentially harming infants before childbirth. The regular operation of cells is affected because of this contamination, which may induce changes in the physiological and biochemical pathways of animals, results in the degradation of essential activities such as breathing, osmoregulation, fertilization, and even death [74]. Heavy metals included in dyeing industry wastewater are non-renewable; thus, they get collected in major parts of our human bodies and begin to develop over time, causing a variety of illness symptoms. Because of this, contaminated or insufficiently treated textile effluent poses a risk to both land and aquatic life, upsetting the atmosphere and posing health risks [38, 40]. Physical, biological, or chemical processes used for specific treating wastewater are typically extremely expensive and result in large amounts of sediment. Finding alternative methods of treatment that encompass the full water treatment process, from pre-treatment to post-treatment, is therefore necessary [54]. Due to increased water shortages and ecological regulations, the textile industry is looking for feasible wastewater treatment methods that will help them decrease their water

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usage and operational expenses. As a result, in light of the present difficulties, efficient wastewater treatment could be the best solution for the textile industry. As a result, it is critical to discuss and argue for awareness techniques that aid in reducing the present challenges associated with textile wastewater. Granular activated carbon, ultrasonic treatment, membrane biological reactors, electrocoagulation, ozonation, an enhanced oxidation process, and other sustainable wastewater treatments [56]. Coagulation mixed with flotation/filtration, flocculation mixed with flotation/filtration, precipitation–flocculation, irradiation, electrokinetic coagulation, traditional oxidation procedures by oxidizing agents (ozone), electroflotation, or electrochemical processes are some of the chemical approaches [70]. These chemical procedures are frequently costly, and while coolers are removed, the development of excessive sludge causes a cleanup issue. Then there is the danger of secondary contamination because of increased chemical consumption [61]. Dyes and other dissolved organic contaminants are removed from effluent using the adsorption technique. The technique also eliminates harmful substances that conventional treatment methods cannot eliminate, like phenols, pesticides, organic colors, and cyanides. As wastewater, which contains organics, is forced through an adsorbent, dissolved organics are adsorbed on the surface. Activated charcoal is the often utilized adsorbent for remediation [73]. It has composed of carbon-containing materials like charcoal, wood, petroleum products, and so on. When activated carbon becomes overloaded, it must be replaced or regenerated. Renewal can take place either chemically or thermally [50]. Electrocoagulation combined with three different types of electro-oxidation processes such as peroxide coagulation, electro-Fenton, and anodic oxidation were the principal methods used in electrochemical oxidation. The study describe treatment efficacy and determined that the combined electrocoagulation and electroFenton treatment technique is the most effective [41]. This refined procedure removed 100% of the color, 100% of the turbidity, and 97% of the TOC [2, 18]. Electrochemical methods have been demonstrated to be beneficial in different oxidation or reduction stages of textile techniques, like lightening linen textiles or lowering sulfur and reactive dyes, with usage available in both natural and synthetic fibers. It is a far less harmful alternative to standard protocol. They were also studied in modern textile fields, like the production of thin films utilized as fibers in smart textiles in order to generate materials with innovative functionality [62]. Among the several wastewater treatment procedures, ozonation has certain unique benefits for dyeing and finishing treatment. Ozonation may be used to decompose the organic molecules, surfactants, and phenolic compounds into smaller molecules using available commercial oxidizers such as sodium hypochlorite. Ozone interacts with organic molecules in two ways during the Ozonation process: (i) directly as a chemical reaction, and (ii) indirectly as a free radical-type reaction. Furthermore, ozone may readily disrupt double bonds in dye [42]. The high-quality two-stage membrane technology ultrafiltration and reverse osmosis or membrane filtration and nanofiltration could be utilized as treated wastewater in the textile sector [37, 82]. Approximately 60–65% of mill effluents may be reclaimed using this type of additional treatment technology [9, 47]. Plants that utilize biological treatment instead

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of conventional procedures indicate that they prefer biological treatment because it produces less residual sludge, has lower overhead costs, and removes more COD [14, 72]. After-dyeing discharged treatment using ozone-based advanced oxidation processes could be a preliminary step in the textile effluent treatment system, such as before biological treatment, or it could be the only operation whenever the pretreated after-dyeing effluent is utilized as a source of brine solution [11]. Furthermore, treating the specified textile wastewater stream, in this example, after-dyeing discharge, using a targeted approach might be cost-effective for the industry [12].

3 Blockchain The globalization of distribution network complicates their administration and monitoring. Blockchain technology, as a distributed digital ledger system that offers openness, authenticity, and privacy, is showing promise in alleviating several international logistics management issues [8, 60]. Blockchain has a variety of uses, from cryptocurrency to the finance sector, hazard identification, the Internet of Things (IoT), and public and social services. Despite the fact that a number of academics have concentrated on using blockchain platforms in various application areas, there seems to be no comprehensive review of blockchain systems from both a technological and an operational perspective [86]. The finance sector, on the other hand, is considered as the principal user of the blockchain idea. This is due not only to the fact that a well use of this breakthrough is the crypto-currency Bitcoin but also to considerable process inefficiency and a considerable cost base problem that are specific to this industry. Furthermore, the economic crisis highlighted that it is not always feasible to identify the right owner of a commodity, even in financial services [52]. The phrase blockchain relates to the system’s technological structure, which is a sequence of blocks. Each block is linked to the previous block via a crypto hash. A block is a data structure that allows for the storage of a list of money transfers. Peers of the blockchain network originate and trade transactions, which change the outcome of the blockchain. As such, transactions can transfer monetary quantities but are not limited to monetary exchanges alone, allowing for the execution of arbitrary code within so-called contracts. Before entering into the precise distinctions between permissioned and permissionless blockchains, first, we need to discuss the various network members [4, 79]. In traditional centralized transaction processing systems, a trusted central authority, which results in cost and performance shortcomings at the centralized servers, must confirm every transaction. In contradiction to the centralized option, blockchain does not require an additional party [17]. Consensus algorithms are employed in blockchain to preserve the consistency of data in a distributed system. Transfers could be verified fast, and ethical miners will not accept fraudulent payments. Once a payment is incorporated into the blockchain, it is virtually hard to erase or rewind. Blocks containing incorrect transactions might be found right away [85]. It can be used to develop smart contracts to monitor banking fraud or to

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securely share medical records between healthcare specialists. Indirect tax systems based on blockchain could be developed, that would record tax receipts at enhancing openness at each stage of the supply chain and authenticity of the whole taxation system [20]. Although blockchain technology is widely seen as potentially damaging in a variety of ways, there is indeed a low level of awareness about how and where blockchain network can be properly applied, as well as which has notable practical impacts [51, 65]. This problem has drawn attention to those who believe the technology has been over. In front of this, this research adopted an established research methodology to organize the findings of the present amount of scientific on blockchain technology, describe the current scope of research as well as ignored subjects, and layout interdisciplinary research methods. At four levels of analysis, the framework identifies three kinds of operations: designing and characteristics, assessment and value, and management and performance [59]. Transactions in the decentralized blockchain technology are maintained in a distributed network and confirmed by all fellow employees, making it practically difficult to edit in the blockchain network. The consortia and private blockchain ledger, on the other hand, may be modified by the dominant authority’s wish. The public blockchain technology allows readers to access the distributed ledger, while the private and consortium blockchains allow for controlled access to the public ledger. As a result, the organization or consortia can determine whether private data should be made available to everybody or not. The public blockchain technology allows any nodes to join or leave the network, making it very scalable [49]. Blockchain technology is evolving through two phases since the inception of the first blockchain network, Bitcoin: blockchain 1.0 and blockchain 2.0. In the blockchain 1.0 phase, blockchain technology is mostly applied to cryptocurrencies. In addition to Bitcoins, there are numerous other forms of currencies, such as Litecoin, Dogecoin, and others. There are presently over 700 different types of digital currencies, with a total market cap of more than 26 billion dollars. In the blockchain 2.0 era, blockchain technology is mostly employed to construct numerous applications. Ethereum is an example of a blockchain 2.0 technology. Each node in Ethereum runs an Ethereum Virtual Network. Customers can create smart contracts, which will run on the Ethereum Platform [45]. Blockchain technique is considered as an innovative technology for enterprises with several possible applications for safe transfers without any use of an intermediary. Blockchain has been utilized in both financial and non-financial businesses for a wide range of applications, such as production, health, and supply chain management. Blockchain provides fundamentally secure contracts and agreements, as well as direct consumer relationships using IoT and cloud technology. It is capable of resolving industrial issues, and a trustworthy third party is there to advertise services. It proposes a new online business strategy as well as healthcare initiatives. It establishes a standard platform for gadgets to safely connect in a dispersed environment. Blockchain has a cheap trade cost, allows for safe information exchange, and provides great agility value [75].

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4 Application of Blockchain Blockchain technology includes decentralized storage capacity, peer-to-peer communication, a facilitator, data encryption, and smart contracts. Employing the blockchain’s technical benefits to the Energy Internet can alleviate many of the issues that are impeding its growth [78]. Blockchain technology has the ability to improve the following critical components of public services: (1) the quantity and quality of public services, (2) the openness and ease of access to government data, (3) the advancement of knowledge across various organizations, and (4) guidance in the progress of an individual lending structure of the country. Nevertheless, data protection, affordability, and dependability continue to be key issues in application. As a result, building quality management and developing a generic application system for blockchain technology are essential in promoting and utilizing blockchain in e-government. Blockchain is a technology to maximize the productivity of public services, but standardizing the monitoring system, protocols, and accountability for the application is required before it can be widely adopted [33]. With the advancement of Internet technologies, virtual classrooms, a revolutionary educational modality, has grown in popularity. Nevertheless, this style of education continues to encounter several challenges in terms of course authenticity, credit and credential verification, student privacy, and course exchange. Blockchain technology may be used to store learning records in a trustworthy, distributed way, give authentic digital certificates, enable learning sharing of resources via smart contracts, and safeguard copyrights through encrypting data. The usage of blockchain technology, according to the research, is a possible trend in the growth of online learning [66]. Quite commonly, technical advancements and solutions in this subject serve as a foundation and impetus for academic study. If study several decades previously recommended some specific, areas of application of blockchain technology in education. Today there is a trend to generate the entire range of university features in blockchain solutions which are management of the learning system, collection of data relating to degree courses, fellowships, etc., establishment and development of students and graduates’ portfolio management, a large-scale implementation of bitcoin processes (up to invective). The most significant benefits of educational blockchain technologies are the construction of a unified learning setting, the creation of network communities, the interchange of science and innovative knowledge, and the security of networking members’ intellectual property [19, 21]. The extent toward which organizations involved in global trade—policy decisions, multilateral institutions, and enterprises—adopt blockchain-based innovations will culminate in a paradigm shift in how commerce is corporatized. The use of this breakthrough will increase the quantity of trades by one trillion dollars by 2025, boosting the rise of global trade [6, 53]. IoT helps to communicate between patients and doctors in smart healthcare by allowing it to be treated virtually in emergency cases via body sensor networks and wearables. Furthermore, utilizing IoT in health systems may result in patient invasions of privacy. As a result, safety should be considered. Blockchain is a popular study subject these days, and it can be applied

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to the overwhelming bulk of IoT applications. The blockchain’s main properties, including decentralized, data integrity, privacy and security, and openness, are only a few of the main reasons for its use in medical systems. Following that, the healthcare sector’s use of IoT and blockchain is investigated in three important areas: medication provenance, patient monitoring, and health record maintenance [7, 58]. Industry 4.0 is a paradigm that is revolutionizing the way industries work by utilizing cutting-edge technology. Blockchain that has been used effectively for cryptocurrencies is such a technology that can boost Industry 4.0 innovations by ensuring protection, trustworthiness, data integrity, decentralization, transparency, and a higher degree of automation via smart contracts [23, 32]. The potential of employing blockchain systems to develop the energy sustainability of the maritime sector is of particular interest to professionals in the marine industry. The technology has a lot of applications, including more effectively linking the distribution network, offering the interchange and transparency of time-stamped proofed information, lowering industry operational expenses with intermediates, and boosting security. It also provides complete transparency for all involved parties with evidence of work, simplifying Port State Control, Class Societies inspections, and auditing conformity [16]. The construction business is often regarded as having immense opportunities for blockchain technology use, owing to the enormous amount of transactions between numerous organizations. Despite the apparent benefits, there have been few instances of blockchain use in the building business. All of the recognized individual construction jobs with broad applicability and influence are associated with “Purchasing”, “Agreement”, and “Budget”. As a result, it makes sense to begin concentrating on blockchain convergence attempts in these regions and then broaden them as the technology improves [39, 77]. Food safety has received more interest in recent times as the economy has grown. The promise of blockchain technology is to assist solve the difficulties of food safety hazards; however, accomplishing this aim in practice would need overcoming some significant barriers and challenges. However, using blockchain techniques to control food safety appears promising [71, 81]. Among the most successful options is smart urban architecture, which blends IoT, Big Data, and Energy Internet. It is confronted with numerous issues, such as inadequate security measures, equipment maintenance and update difficulties, higher working charges of large data center building projects, poor resistance to potentially harmful events, the complexity of creating the energy Online consumers’ trust, user privacy is easily compromised, the economic model is inapplicable, and so on. A P2P light–heavy backup system will be devised to mitigate the high cost of blockchain data storage [44]. On the one side, the financial system is struggling with the consequences of interest rate deregulation, with profit margins declining as the interest–rate gap narrows. On the other hand, the emerging economy, the growth of the Internet, and economic advancements all have an influence. As a result, the financial sector requires quick transformation and is searching for new prospects for growth. As a result, blockchain networks have the ability to alter the technology of banks’ payment clearing and credit history services, modernizing and reinventing them. Blockchain applications

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also foster the emergence of “multi-center, weakly mediated” scenarios, which will boost the performance of the banking organization. Despite the fact that blockchains are permissionless and self-governing, the legislation and practical implementation of a decentralized system are challenges that must be addressed [29]. When blockchain technique is implemented to the agriculture products traceability, the implementation is not only to convert the traditional product tracking system into a server platform based on the blockchain’s underlying protocol but also to provide an interactive network of data and information with an inadequate centralization of the stakeholders. Retailers, merchants, agriculture products quality checks agencies, seed merchants, landowners, and financial organizations that would provide finance credit may all communicate actual information on chains through this network. People can benefit from the ease, efficiency, and confidence provided by Blockchain and chain ledgers due to their stringent encryption properties. In order to increase their enjoyment of these rights, these nodes must also bear the responsibility of cooperatively maintaining the data’s dependability [43]. The blockchain technology is suited for many tracing classes, such as vehicle parts tracking, drug record keeping, and so on, due to the properties of the data that cannot be interfered with and the information could be synchronized in timely manner.

5 Blockchain for Wastewater Treatment In India, poorly treated wastewater is among the most significant contributors of water contamination. Quality of water and contamination are often quantified in terms of intensity. As a result, waste disposal is primarily concerned with the nonbiodegradable components that must be treated. Biochemical oxygen demand, chemical oxygen demand, and total dissolved solids are three primary types of wastewater environmental contaminants. Water quality is affected using parameters such as PH reaching 7, turbidity size more than >1000 nm, biological oxygen demand of 3– 5 ppm, and total dissolved solids of 300–500 ppm. Hardness and oil/grease content normal water has a lower concentration of 45–46 ppm and a higher concentration of 5–6 ppm [36]. Indeed, deep learning management for wastewater treatment plants based on blockchain abatement has gotten a lot of academic interest recently, and certain management techniques have been presented. Despite significant advances, practically all approaches rely substantially on economic data. The wastewater treatment plant, in particular, is a complicated system comprised of several parts. Because economic data is only one component, it cannot be evaluated thoroughly [76]. Blockchain, which is completely compliant with Industrial 4.0, adds decentralization, openness, automated, and data integrity to the suggested framework [24, 48]. The term “smart city” refers to a combined mode of communication using information systems in which a lot of devices are linked via the IoT. It is in need of water management protection because of the issues posed by expanding population, industrial expansion, and urbanization. As a result, a blockchain-based system is established, which aids in the appropriate management of water usage as well as

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the correct processing of wastewater by offering an effective solid waste management system [67]. Detectors or IoT-based flow meters equipped at water treatment plants continuously notify information to the cloud system. The data from IoT meters may be interfered with in a variety of ways, affecting the water recycling process. The information should be maintained in immutable distributed systems such as blockchain. The data includes characteristics such as mean pH, mean suspended solids, mean hardness, mean oils and fats, BOD, quantity of water of IoT meters, and so on. These characteristics are crucial in understanding the status of IoT meters. The MQTT protocol is used by the IoT meter to send data to the cloud. The distributed control system (DCS) is in charge of collecting data from meters [34]. The four stages of the blockchain-based industrial wastewater model systems include data gathering, edge computing devices, a cloud computing platform, and an application server. In Layer-1 data processing, numerous industry equipment is outfitted with IoT smart edge devices capable of detecting, tracking, handling, gathering, and interacting information about the water storage level, quantity of water consumed, volume of wastewater generated, and industrial effluent handled by WWTPs. The collected information is moved to Layer-2 edge computing systems via readily accessible telecommunications for real-time handling, major decision, aggregation of data, and temporary storage of data blocks for a predetermined period. The edge nodes send validated data blocks to the effluent blockchain, which is hosted on cloud-based servers Layer-3, that are able to process information, storing, handling, investigating, and ability to handle blockchain-related activities with such a wide range of data created by various internet of things based industry sectors related to water utilization, industrial effluent production, and sewage treatment. Applications for measuring and managing wastewater-related tasks run on application Layer-4. Smart agreements will allow all parties, such as smart industries, governmental organizations, pollution monitoring organizations, and non-governmental organizations, to access/query the recorded data on the blockchain, that is, they would be able to view and display data for that they have authorization [30, 35]. A blockchain-enabled, incentive-based solution for sustainable water conservation and delivery. Because the homes are nodes in the blockchain network, the processing occurs at the network’s edge, providing a speedy incentive method of conserving water. Among the stages required is the accurate forecast of normal water needs using a feed forward neural network, which takes into account a variety of criteria to estimate water use. The FNN is taught using a computational intelligence technique known as Symbiotic Organism Search [69].

6 Conclusion and Future Perspective The Bitcoin cryptocurrency is powered by blockchain technology. All payments are logged on a public ledger that is available to everyone in a decentralized transaction system. Blockchain’s purpose is to give confidentiality, safety, privacy, and openness to all of its customers. However, these characteristics create a slew of technological

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hurdles and constraints that must be addressed. Blockchain technology is now in its early stages, and a huge proportion of apps must be developed and implemented in order to protect the nature of communication. This chapter identifies and discusses the major criteria for distributed ledger technology in commercial wastewater disposal. A blockchain-based framework is proposed for controlling and measuring industrial wastewater in the textile industry. Blockchain technology is being used to regulate industrial effluent would allow many stakeholders, such as government agencies, global protection of the environment agencies, and industries; monitor industrial waste; and safeguard the environment from the adverse consequences of industrial waste. Acknowledgements The authors express their gratitude to the Management of Sri Sivasubramaniya Nadar College of Engineering and St Joseph’s College of Engineering, Chennai, India.

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