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” is a technology for storing and transmitting information that is transparent, secure, and operates without a central authority. The data stored within it is tamper-proof, unalterable, and indelible. Thanks to all these features, it is now possible to create digital certificates of authenticity for luxury goods. The way blockchain technology works is simple: it involves storing in a database all transactions that have taken place since a product’s creation. These records constitute a “block.” With each new record, a block is added to the previous one, thus forming a chain of blocks as the information is modified multiple times. This chain of blocks represents the authentic history of all modifications.

The database is shared by all its users, with no intermediaries whatsoever. Only identified and authorized users can modify it. Users can add content, but they cannot delete it or alter the blockchain. This allows anyone to verify the integrity of the blockchain.

What are the benefits for luxury homes?

To combat the counterfeiting that has plagued the luxury sector for decades and, more recently, the secondhand market, this technology offers numerous benefits to luxury brands seeking to protect their products and customers.

Blockchain technology makes it possible to assign a unique identifier to each product and maintain a record of the product’s entire lifecycle. This record takes the form of a digital certificate of authenticity for the product, which is provided to the customer at the time of sale. Customers can access this information using an app or a QR code.

Furthermore, these certificates of authenticity are transferable. Thus, throughout the product’s lifespan, brands and successive owners pass on a true digital identity card that serves to prove not only the product’s authenticity but also its ownership—for example, in the event of a resale. The digital certificate will also serve as a guarantee in the event of loss or theft of the product.

Blockchain also enables luxury brands to build stronger trust with their customers. Indeed, as customers are increasingly concerned about product ethics and manufacturing processes and value transparency, they will be able to access all information related to the product.

In this way, blockchain technology secures the product while providing transparency regarding it.

New Challenges for Luxury Brands

Faced with the new challenges posed by the need for traceability and authenticity of materials, craftsmanship, and products, luxury houses are turning to this innovative solution. Recently, the LVMH Group joined forces with Prada and Cartier, part of the Richemont Group, to create the Aura Blockchain Consortium, the first international luxury blockchain, open to all luxury brands.

Non-duplicable and tamper-proof, this digital solution—secured by ConsenSys and Microsoft technology—provides customers with direct access, via a digital certificate, to the history of the product they are purchasing, from its design to its distribution, as well as to its certificates of authenticity.

Toni Belloni, CEO of LVMH, said: "For our industry, the Aura Blockchain Consortium represents an unprecedented opportunity to strengthen the bond we share with 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 facilitating the sharing of information regarding authenticity, responsible sourcing, and sustainability through a secure digital platform, consumers will benefit from transparency and traceability throughout a product’s lifecycle.

Security, transparency, authentication… Blockchain offers the luxury sector an opportunity to address major challenges and break new ground.

Agence M.P. Berthoud this innovation and remains committed to helping brands increase their visibility.