Building a ‘Made in the USA’ Footwear Blockchain
ComunityMade has become the de-facto nucleus of Downtown, Los Angeles’ footwear production scene. The manufacturer has brought together a growing collective of American shoe and component makers, some based within blocks of its headquarters, to form a small but mighty supply chain.
Now, founders Sean and Shannon Scott are looking to bring this tangle of connections to the web with the creation of a traceability platform. ComunityMade has teamed with Stockholm, Sweden-based blockchain firm ChromaWay to develop the technology, with the aim of giving vendors and consumers alike access to insights about the origins of their shoes. The partners on Tuesday announced that they have signed a Memorandum of Understanding (MOU) to co-design and develop the supply chain solution, leveraging decentralized Web3 technologies and relational databases on ChromaWay’s Chromia network.
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Both footwear veterans with decades of experience at brands like Nike, Asics and Toms, the Scotts launched ComunityMade in 2017. Having experienced firsthand the hurdles of overseas supply chains, from forced labor to overproduction, they built their own development lab and manufacturing facility stateside, employing members of the L.A. community. Over the past six years, their passion for American-made footwear has extended beyond their own operations. ComunityMade has bolstered the growth of the businesses cropping up around it, from other shoemakers to producers of foam midsoles, outsoles and knit uppers.
As this synergistic network grows, so too does the need for transparency and traceability, Sean Scott believes. “The supply chain has long been a great place to apply decentralized ledger technology,” he told Sourcing Journal. “You’ve got a complicated business with a lot of stakeholders and a lot of documentation, and at the same time, you have a demand for clarity about that documentation.” With new governmental regulations coming down the pike and consumer awareness about sustainability on the rise, Scott said it’s time to get “all the stakeholders onboard” the blockchain train. “It may take some time, some cajoling, some education, but it’s doable,” he said.
In addition to producing its in-house brand, ComunityMade collaborates with artisans and creatives across the country, from design co-op Pingree Detroit to California workwear brand Devium. “We’re at that stage in the business where we’ve got people coming in who want to do private label business, and we want to expand because we see that as a really viable thing,” Shannon Scott added. The company is also fielding interest from influencers and other public personalities looking to start their own brands—a prospect that was once dependent on the backing of a power player in the space, like a Nike or Adidas.
The blockchain will “supercharge the way that we can do business,” she said, as a connected network of vetted and verified suppliers will help drive efficiency when building new product lines. “It took us a long time to figure out the steps and the pitfalls, and other brands are now going through the same thing.” The technology could help save individual creators, nascent brands, and even larger labels looking to nearshore a portion of their production, the headaches associated with building a supply chain from scratch.
What’s more, Sean Scott believes increasingly conscious consumers are ready to engage with blockchain as they research their potential purchases. “They have this ability to get educated with this computer in the palm of their hands—we all do,” he said. A decade ago, shoppers might not have had the drive to dive into the implications of their buying decisions, but today, access to information is fostering a greater degree of awareness.
It’s a dialogue that Scott believes brands and shoppers should continue. “If the only heel counters we’ve found for our shoes are from China, and we can’t vouch for the source, we want to bring the customer along and let them know that we’re working on it,” he said by way of example. “I think it shows them respect, and they’re going to hold us accountable.”
ComunityMade is currently in the fundraising stage for the blockchain venture, as well as an expansion of its Downtown operations to accommodate new business and greater production capacity. The company is looking for strategic partners, from economic development and impact investors to others with a vested interest in the footwear space. ChromaWay will spend the next year developing the platform.
As new players enter the L.A. footwear scene—and production hubs pop up across the country—Shannon Scott said the possibilities for a nationwide supply chain are just beginning to percolate. “I felt like we were on this island alone for the longest time,” she said of being an American shoemaker. “Now, it kind of feels like it’s grown into a resort.”
“This nearshoring shift—it’s not a sea-change just yet, but we’re moving the needle,” Sean Scott added. “The momentum now is much greater than I ever thought it could be.”
