22622715 Decoding Blockchain Technology: Understanding the Impact for Luxury Fashion Supply Chains

Abstract

This chapter explores the transformative nature of blockchain technology (BCT) on luxury fashion supply chain operations. It maps its evolution from a niche technology underpinning the Bitcoin cryptocurrency to one now seen as a strategic imperative across many industries. The chapter provides an overview of the novel characteristics of BCT and explores its role in supporting supply chain transparency, a vital aspect of sustainable supply chain management. Recent case studies illustrate practical BCT applications and explain the present barriers to widespread adoption in luxury fashion. Looking to the future, BCT’s envisaged role in the next phase of the internet (Web3) and the metaverse is discussed, emphasising key concepts such as tokenisation. It investigates how BCT innovations, such as non-fungible tokens, are enabling the sale of phygital products, offering customers dual value propositions through the combination of physical items and their digital twins for use within virtual spaces. These developments are already revolutionising luxury fashion supply chain operations, blurring the lines between physical and digital domains. The chapter touches upon recently introduced European Union Ecodesign legislation that includes provisions for the introduction of ‘Digital Product Passports’, assessing how these regulations could increase BCT adoption and help shape sustainable value creation and redefine competitive advantage in luxury fashion.