In recent years, the fashion industry has embraced technology in a big way, using digital tools to improve production processes, streamline supply chains, and connect with consumers. One area that is attracting increasing attention is the use of digital IDs, and their potential to transform the industry and drive greater sustainability and transparency.

What is Digital ID?

A digital ID is a unique identifier that can be used to track and trace the origin of products and materials. This information can be stored on a blockchain, providing a secure, decentralized, and transparent record of a product's journey from the source of the raw materials to the final product. This technology has the potential to revolutionize the fashion industry, unlocking greater sustainability and transparency, and creating a more responsible supply chain.

One of the key benefits of digital IDs is that they enable companies to track and trace the origin of materials, ensuring that products are made using sustainable and ethical materials. This helps to address one of the biggest challenges facing the industry, the lack of transparency in supply chains, and provides consumers with the information they need to make informed decisions about the products they purchase.

Digital IDs also enable companies to improve their production processes, by providing a record of the entire supply chain, from raw materials to finished products. This information can be used to optimize processes, reduce waste, and improve overall efficiency. This, in turn, helps to reduce the environmental impact of fashion production, and contributes to a more sustainable industry.

Finally, digital IDs also offer a new way for companies to connect with consumers, by providing them with detailed information about the products they purchase. Consumers can learn about the origin of materials, the production processes involved, and the social and environmental impact of the product. This helps to build trust and creates a more engaging and authentic connection between consumers and companies.

The Power of Data

Technology will be critical for the development and adoption of a common data language. Given the complexity and fragmentation of value chains, brands — particularly large ones — will require tracking software for data gathering and marshalling. Brands can look to establish a decentralised ledger (a peer-to-peer shared database with no central administrator) to efficiently collect and distribute data and ensure its reliability — the data within digital ledgers is immutable. These ledgers may be open source or owned by individual brands, or third-parties and start-ups could create data interfaces for specific segments of the value chain.

Such traceability systems — whereby each entity along the value chain inputs data — are far from a reality today. However, pilots are running to test platforms that enable brands to track garments through the supply chain, alongside implementations of off-the-shelf solutions connecting suppliers and brands’ data systems.

Conclusion

In conclusion, digital IDs have the potential to transform the fashion industry, unlocking greater sustainability and transparency, and providing consumers with the information they need to make informed decisions. By embracing this technology, the fashion industry can take a critical step towards a more responsible and sustainable future.

Traceability will put the industry on track towards a more transparent, accountable future, ensuring that investors, consumers and regulators can interact with brands based on sustainability information they can trust. What’s more, traceability will be critical in establishing a competitive business model. Owing to the complex and fragmented nature of the value chain, technology is the key enabler to achieving traceability. With this, brands need to embrace a new, collaborative mindset to enable information sharing, while extending tools and providing training and support to their suppliers so that they are also able to embrace a more traceable industry.