LL Bean Brings The Blockchain Into Outdoor Apparel

One of the newest technologies in FinTech is coming to one of the oldest American outdoor gear brands. Now arriving at L.L. Bean? The blockchain.

Through a pilot this year, the retailer plans to design coats and boots with sensors which will interface with an ethereum-based platform. A New York company, Loomia, will make the circuits for the items — and hardware that utilizes near-field communication (NFC) technology to collect data. To store and make sense of the information, the retailer is creating a new analytics and data tracking system, The Wall Street Journal reported.

While L.L. Bean has collected feedback from customers for years, the blockchain-embedded clothing will open new doors for the retailer. “Digital, quantifiable data about how customers are actually using a product — we’ve never had that data before,” Chad Leeder, an innovation specialist at the company, told WSJ.

The information will most likely include quantifiable data such as the frequency of wear and the number of washes. With the information, the retailer could ascertain whether customers are using their products as they were designed — and if new products are working as expected.

The program is voluntary, as the WSJ reported that customers would have to download an app and opt-in to having their demographic data shared with Mesh01, a customer intelligence firm based in New Hampshire. To perhaps induce people to join the test, L.L. Bean might offer them discounts. After all, their data might be very valuable to the company.

“If we can see that the customer really is utilizing [a product] in the way we intended, if they’re wearing it in the right climate or on a daily basis, that helps us decide whether it’s still viable in a market,” Leeder told WSJ. “If we see a high return rate, we’ll analyze why.”

A high return rate could be caused by a design defect. Around 1912, customers returned the company’s leather and rubber bottomed shoes en masse due to a quality control issue. Since then, the retailer has offered a generous return policy — one with an unlimited window of return — until it recently ended the policy due to customer misuse. Now, customers will be limited to a one-year return window.

Prior to the change in policy, L.L. Bean had believed that it would gain more in brand reputation and customer relationships than it would lose on the cost of the returns. But customers have been abusing the policy, making it hard for the retailer to continue offering a lifetime return window.

As a result of the new policy, though, one customer has sued the retailer, saying the warranty was the “basis of the bargain” of his purchases from L.L. Bean.

The Technology

The world of blockchain technology has certainly seen some major changes over the course of the past decade. Although there were early inklings of the technology dating back to 1991, it wasn’t until 2008 when Satoshi Nakamoto implemented it as the base component of bitcoin currency that it really took off.

While traditionally the blockchain has been instrumental in the financial arena, 2016 and early 2017 saw other industries dipping their toes into the technology’s shallow end. Blockchain technology has moved into industries like supply chain, digital advertising, election voting, governments, insurance and even the sharing economy.

Apparel seems to be a new category, and privacy concerns will come with this new use. With embedded blockchain technology, retailers such as L.L. Bean are not simply tracking web browsing habits, for example — they’re tracking consumers as they walk and put their clothing in the washing machine.

In a perhaps less creepy twist, consumers would have to opt in and download an app. But, still, the company may not offer its products without the technology someday. And possibly some unscrupulous people could take information from L.L. Bean’s customers and sell it — or figure out another use for the information.

But the technology could benefit consumers in addition to L.L. Bean. With the system, the retailer could provide information in real-time such as how often items should be cleaned or other factors consumers should take into account when they use their products or store them.

But, at the very least, if all works as intended, L.L Bean can find out ways to make its products better — and perhaps last longer, if not forever — so that generous return policy is truly not needed.