Blockchain at the service of luxury brands
The fight against counterfeiting is more than ever a topical issue in the luxury sector. Indeed, over the last few years, the phenomenon has developed strongly and the sale of fraudulent products causes several billion euros in losses to the luxury industry. As a result, the fight against counterfeit products requires an ever stronger commitment from brands that must protect their turnover, but also their image which is fundamental in this sector. Thus, to counter parallel trade, Luxury Houses are implementing dissuasive strategies and developing new innovative technologies like blockchain.
"Blockchain", behind this word is a technology for storing and transmitting information, transparent, secure and operating without a control body. The data stored inside is unforgeable, unchangeable and non-erasable. Thanks to all these characteristics, it is now possible to create digital certificates of authenticity for luxury goods. Blockchain technology works in a simple way: it stores all the exchanges that have taken place since the creation of a product on a database. These records constitute a "block". With each new record, a block is added to the previous one, thus forming a chain of blocks when the information is modified several times. This block chain represents the authentic history of all changes.
The database is shared by all its users, without any intermediary. Only identified and authorized actors can modify it. It is possible to add content, but it is impossible to delete or destroy the chain. Thanks to this, everyone can check the validity of the chain.
In order to deal with the counterfeiting that has been rampant for decades in the luxury goods industry and more recently in the second-hand market, this technology offers many advantages for luxury brands wishing to protect their products and their customers.
The blockchain makes it possible to give a unique identifier to each product and to keep a history of the product's life. This history takes the form of a digital authentication certificate for the product, transmitted to the customer at the time of sale. The information is accessible to the customer by using an application or a QR code.
Moreover, these certificates of authenticity are transmissible. Thus, throughout the life of the product, the brands and the successive owners transmit to each other a real digital identity card which makes it possible to prove its authenticity but also its ownership, in the event of a resale of the product for example. The digital certificate will also serve as a guarantee in case of loss or theft of the product.
Blockchain also enables luxury brands to strengthen their trust with customers. Customers will be able to access all the information about the product, as they are concerned about the ethics of the products and their manufacturing process, and they will be in favor of transparency.
Thus, blockchain technology secures the product while providing transparency about it.
Faced with the new challenges posed by the traceability and authenticity of materials, know-how and products, luxury brands are looking into this innovative solution. Recently, the LVMH group joined forces with Prada and Cartier within the Richemont group to design Aura Blockchain Consortium, the first international luxury blockchain, open to all luxury brands.
Non-duplicable, unforgeable, this digital solution secured by ConsenSys and Microsoft technology gives the customer, thanks to a digital certificate, direct access to the history of the product he is buying, from its conception to its distribution, and to its certificates of authenticity.
Toni Belloni, Chief Executive Officer of LVMH, said: "For our industry, the Aura Blockchain Consortium represents an unprecedented opportunity to strengthen the bond between us and our customers by offering them simple solutions to better understand our products. By joining forces with other luxury brands on this project, we are leading the way in transparency and traceability. I hope that other prestigious players will join this consortium.
This collaboration between competitors represents a unique and innovative solution. By enabling the communication of authenticity, responsible sourcing and sustainability information in a secure digital format, consumers will benefit from transparency and traceability throughout a product's life cycle.
Security, transparency, authentication... Blockchain presents itself as an opportunity for the luxury sector to respond to large-scale issues and open up new avenues.
The M.P. Berthoud Agency supports this innovation and is always on hand to help brands improve their visibility.
