Retracing the Fashion Supply Chain

At THE RELEVANCE HOUSE, we love chatting to exciting new brands and hearing their stories. We recently met Philipp Mayer and Lukas Pünder from CANO, a young shoe brand based in Germany, but producing in Mexico. Philipp and Lukas founded the brand in 2016 with the aim of creating unique leather shoes inspired by the traditional Mexican Huarache shoes. And they wanted their products to be produced in a fair and sustainable manner for both manufacturers and consumers. In order to do this, they had to know every single step of their supply chain. You might think that this is an obvious statement for a brand whose main USP is sustainability, but the reality is different. Philipp and Lukas went to different trade fairs and, while talking to other small fashion brands, they found that:

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“Many brands might be doing good, but a lot of them don’t really know what they’re doing. […] Only because they have a GOT certificate (Global Organic Textile) or a Fair Wear Foundation certificate they say we are fair fashion, but talking to them we realized that they actually don’t really know their supply chain at all. They know their tier-one manufacturer, which is already good, but not enough, and then when we asked where they get their raw material, they say that their manufacturer orders it for them. As fashion brand, you should be knowing more.”

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This situation clearly bothered both founders. They needed to find a system that would allow that, but sadly they couldn’t find a ready-made solution on the market. In 2018, they decided to create their own solution; Retraced. The initial version of their tool used an SQL database and NFC technology, as they were only using it for CANO. This was meant to show consumers the whole journey of the shoes from the very start. From sourcing materials to the names of the artisans who cut, weaved and finished the product, they wanted absolute transparency.

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Every shoe contained an NFC tag, and each artisan scanned the shoe when they were finished with their work. This not only recorded the name of the artisans, but it showed the overall journey that each shoe had undergone. “It’s about fairness to consumers, but also fairness towards our artisans,’’ says Philipp. It was important to them that “the people who created our products were put into the spotlight more than the brand itself because they are the ones who put heart and soul into the products, it’s not us.”

Once other fashion brands heard about the tool and wanted it for their own business, a problem soon came to light. The underlying technology that powered Retraced was vulnerable to manipulation because the information could potentially be altered by unscrupulous users once it was uploaded.

Philipp and Lukas realised they needed something that could prevent this and really instil trust in the brand for their consumers. As luck would have it, they met an old friend, Peter Merkert, a blockchain expert, who later became a co-founder of Retraced. After talking with him they decided to opt for this emerging technology. The perfect solution for Philipp’s and Lukas’s dream was finally available, and they could confidently share it with other like-minded brands. So how does it work?

Retraced uses permission based Hyperledger since it’s more environmentally friendly, but also because it allows small brands’ to veil their business secrets from competitors such as where exactly they order raw materials and who’s their manufacturer. This is why Hyperledger worked better for them than a public blockchain. These are just two of the many advantages blockchain technology offers businesses.

We then moved on to ask Philipp and Lukas about the future of supply chain traceability and the challenges for big brands, who, compared to smaller brands, need to produce their items faster and in large quantities. Would such brands really agree to share their supply chain information with consumers?

“It all comes down to what the consumer demands. The demand for sustainability is rising incredibly, and a lot is already happening also for those fast-fashion brands. It’s not perfect, but it’s a start. […] Their supply chains are so complex, they can’t change it in a year or two, also, they have so many employees, and if they want to become fully sustainable and transparent that would mean that all their products become 30–40% more expensive, then the consumers who don’t care much about sustainability would probably go to less expensive brands. […] This would mean for these big brands to put many jobs in jeopardy.”

Both co-founders acknowledge that this is a delicate topic, and there are many aspects to take into account. So, for now, their goal is to raise awareness about the opacity of supply chains and educate consumers about the topic. They hope that one day even the biggest brands will see the benefits, in particular, if it is driven by consumer pressure.

At THE RELEVANCE HOUSE we love cutting-edge companies like Retraced and Cano. We believe in the power of people to change old systems that are harming not only the environment but also us as human beings. And we, like an increasing number of people, recognise that emerging technologies such as DLT are powerful tools to achieve far greater efficiency, transparency and fairness in many industries. Retraced is one of the many brave companies that rose to the challenge, and for that, they should be congratulated and awarded. Which they were by winning Deutscher Nachaltigkeitspreis 2020 (The German Sustainability Award).

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Photo credits:

Photo 1 by Freepik
Photo 2 Philipp Mayer und Lukas Pünder at the Deutscher Nachaltigkeitspreis.