LVMH, Richemont’s Cartier and Prada SpA join forces to offer their customers a blockchain solution that seeks an additional seal of authenticity for the goods they buy.
The world’s largest luxury manufacturers’ alliance intends to make all luxury brands a blockchain-enabled solution available to reassure shoppers that what they are buying is authentic, the companies said in a statement on the joint on Tuesday. It will also make the products traceable in a transparent way.
Blockchain technology is a digital way to certify a transaction. This solution will enable consumers to know whether a product is fake or not by providing an encrypted warranty certificate, LVMH Managing Director Antonio Belloni said in an interview. Such certificates have long existed in the industry but the blockchain’s reputation as an unattainable tool means that this project, called Aura Blockchain, could work better.
At stake for luxury brands is billions of dollars worth of lost to fake revenue. The global trade in counterfeit will balloon to $ 991 billion by 2022, almost double the 2013 level, according to research firm Frontier Economics. That estimate includes luxury goods, consumer products and several other categories such as pharmaceuticals.
Aura Blockchain is likely to evolve as it is still a young technology, said Cartier CEO Cyrille Vigneron. Cartier has already tested one feature with online product returns, which allows shoppers to take a photo and upload it on the blockchain to prove that the state of the product they return has not changed between the moment received at home and the moment they shipped it back to the brand.
“It’s simple but it does improve trust between the two sides,” said Vigneron. He added that the auction houses may be interested in using such products when selling fine art.
Belloni LVMH said the consortium is a way to set an industry standard rather than having each brand develop their own solutions separately. He said Aura Blockchain is in contact with other luxury groups but declined to say which brand could join next. He added that the encrypted client data on the blockchain will not be accessible to competitors, he added. Within LVMH, Louis Vuitton, Bulgari and Hublot have already tried the technology, while Tiffany & Co. he is the next “obvious” candidate, he said.
“Trust is the one key on which our industry is based and one that we really want to protect,” Belloni said, adding that all clients, but especially younger ones, are concerned about the issue.
Such solutions can also allow people to more easily resell luxury goods on the secondary market.
Although the technology is enabled by blockchain, there are no plans to accept payments for such goods in cryptocurrencies, the two executives said. Microsoft Corp. and ConsenSys help the luxury groups develop the technological infrastructure for this solution.
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This story was published from a wire agency feed without modifications to the text. Only the heading has been changed.