The blockchain technology has various use cases. Some of the largest fashion brands such as Louis Vuitton, Cartier and Prada are now implementing blockchain solutions to authenticate their products in a more transparent way and prevent counterfeiting.
The consortium plans to make their blockchain tool available to other luxury brands. The solution will provide their customers greater assurance that their products are authentic by providing an encrypted certificate of guarantee. It will also make the products more traceable, facilitating the resale of luxury goods on the secondary market.
Utilizing blockchain to combat counterfeiting
Fashion brands are utilizing blockchain technology primarily to combat counterfeit markets, to which they lose billions each year. Research firm Frontier Economics expects the global trade in counterfeits to balloon to $991 billion by 2022. This is almost double the amount in 2013. The estimate includes not only luxury goods but also consumer products and several other categories like pharmaceuticals.
Consortium member Cartier has already tested one feature of the Aura Blockchain with online product returns. So far, shoppers have been able to take a photo of a good they wish to return before returning it. This way, customers can reliably prove the product hasn’t been damaged or altered since they first received it.
According to Cartier CEO Cyrille Vigneron, the blockchain solution is likely to evolve since it’s still an emerging technology. He also recommended that auction houses utilize blockchain technology to authenticate the sale of fine art.
Expansion of the blockchain solution
Rather than each brand developing its own solution separately, LVMH Managing Director Antonio Belloni said the partnership is a way to set an industry standard. Belloni said the consortium is in contact with other luxury groups to expand the use of the Aura Blockchain. However, he declined to disclose which. He added that the client data encrypted onto the blockchain wouldn’t be accessible to rivals.
LMVH is a fashion brand conglomerate with many notable names under its management. Within LVMH, Louis Vuitton, Bulgari, and Hublot are just a few that have already tried the technology. Belloni mentioned that Tiffany & Co. is the next “obvious” candidate.
Although utilizing blockchain technology in an authenticating capacity, none of the brands have plans to accept payments in cryptocurrencies. Microsoft and ConsenSys are developing the infrastructure.
Other fashion brand’s uses of blockchain technology
The estate of fashion icon Karl Lagerfeld recently uploaded his photography catalog to a blockchain for a similar purpose of retaining authenticity. However, the collection has been uploaded as NFTs, which will enable them to be sold for cryptocurrency.
Meanwhile, other fashion brands have taken a variety of approaches to engage with blockchain technology. While major luxury brands are mulling over the prospect of releasing NFTs, other smaller brands are diving in.
As we move into a more immersive web, every fashion brand will need to have a virtual strategy. Selling virtual dresses and assets will be a significant revenue stream for brands. For my children, the way their avatar looks in games is equally as important as how they look when they go to school. My daughter said to me the other day about her avatar, Yeah mom, I paid a lot for that face.Cathy Hackl, Futures Intelligence Group
Sydney-based Neuno for example wants to provide a 3D wardrobe across multiple online platforms, such as social media and video games. Another smaller brand, Clothia, is offering clothing NFTs that come with physical copies as well.
*Originally posted at CVJ.CH