LVMH, Richemont’s Cartier, and Prada SpA are joining forces to provide a blockchain solution for their customers who want an extra sign of authenticity for the goods they are buying.
The world’s largest luxury goods affiliate is planning to make the blockchain-approved solution available in all luxury products to give consumers a guarantee of what they are buying, the companies said in a joint statement on Tuesday. And it will make the products more transparent.
Blockchain technology is a digital way to verify transactions. This solution will let consumers know if the product is counterfeit or not by providing an encrypted certification, LVMH Managing Director Antonio Belloni said in an interview. Such certificates have long existed in the industry but the reputation of the blockchain as an intangible tool to date means that this project, called Aura Blockchain, could work better.
At stake for luxury products are the multibillion-dollar counterfeit lost money. Global counterfeit trade will be a balloon to $ 991 billion by 2022, almost double that of 2013, according to research firm Frontier Economics. That limitation includes luxury goods, consumer products, and several other categories such as prescription drugs.
The Aura Blockchain is likely to change because it is still a new technology, said Cartier chief executive Cyrille Vigneron. Cartier has already explored one aspect of online product retrieval, allowing consumers to take a photo and upload it to the blockchain to prove that the product status they are returning has not changed between the time they received it at home and the time they sent it back to the brand.
“It’s simple but it means that trust between the two parties is enhanced,” Vigneron said. He also added that auction houses may be interested in using those products when selling quality art.
Belloni of LVMH said the consortium is a way of setting an industry-standard rather than each product making its own solutions separately. He said Aura Blockchain is in contact with other luxury groups but declined to say what type of product it could join next. Client data embedded in the blockchain will not be accessible to competitors, he added. Within LVMH, Louis Vuitton, Bulgari, and Hublot are already experimenting with the technology, with Tiffany & Co running for the next “obvious” election, he said.
“Trust is one of the keys to our industry and we really want to keep it,” Belloni said, adding that all clients, especially small ones, are concerned about the issue.
Such solutions can allow people to resell luxury goods in the secondary market more easily.
While technology is powered by blockchain, there are no plans to accept payments for those assets in cryptocurrencies, both executives said. Microsoft Corp and ConsenSys are assisting luxury teams to develop the technical infrastructure for this solution.