LVMH, Cartier And Prada Partner To Fight Counterfeits, Invite Other Luxury Brands To Join
Aristotle said, “A common enemy
unites the bitterest of enemies,” and that age-old maxim is once again proving
true. This week the fiercest competitors in the luxury market – LVMH, the
Richemont-owned Cartier and Prada Group – have joined forces to fight a common
enemy: counterfeiting.
Together they formed the
non-profit Aura Blockchain Consortium to put blockchain technology to work
assuring customers of the authenticity of luxury goods.
Developed by Microsoft MSFT -0.9%
and ConsenSys, the Aura blockchain system uses a similar distributed platform
that controls cryptocurrencies. Through it, consumers will be able to access a
product’s history and proof of authenticity based upona a digital certificate
they will receive electronically upon purchase. Each item will include a unique
identifier, such as an NFC chip for bags or a serial number for watches, which
will be linked to the certificate on the blockchain.
“Consumers can easily and
transparently follow a product’s lifecycle, from conception through
distribution, with trusted data throughout, and thus strengthen their
relationship with their favorite luxury brands,” Aura said in a statement.
And Cyrille Vigneron, president
of Cartier and a member of Richemont’s Board and Senior Executive Committee,
added, “We invite the entire profession to join this consortium to design a new
luxury era enabled by blockchain technology.”
The New York Times reports that
Bulgari, Cartier, Hublot, Louis Vuitton and Prada are already using the system
and the Aura release indicates “several advanced conversations” are being held
with other luxury brands to join the Consortium.
Luxury brands will pay an annual
licensing fee and a volume fee to participate in the system, which is sure to
be money well spent considering the $2.7 to $3.2 trillion dollars taken in by
luxury counterfeiters, according to Harvard Business Review.
Counterfeiter’s growing
sophistication has weakened the traditional levers of luxury brand authentication,
like logos and distinctive style. The Aura Blockchain Consortium will add an
unbreachable level of security.
Reflecting on what this
blockchain initiative means to luxury brands, Dr. Martina Olbert, founder of
Meaning.Global, says, “This alliance can be a game changer for the future of
luxury,” as she sees the future of luxury as collaborative, not competitive:
“The alliance of three big
players signals something important about the future of the luxury market
dynamic. Luxury isn’t a game of competition. Luxury is a game of value
creation. It is based on embracing the unique identity, authenticity and inner
essence of brands. To function that way again, the luxury industry needs to
become collective and tackle challenges as a whole.”
In effect, this initiative looks
back to the traditional foundation and heritage of luxury brands – the timeless
pillars of luxury, such as provenance, uniqueness, scarcity and sancity of the
brand – and brings it forward with a 21st technology-based solution.
“The move signals a greater
connection and acknowledgement of the roots of luxury – where luxury came from
and the need to protect its long-term value – as well as where it’s going,”
Olbert continues.
Not only does it protect the
brands, it also adds a layer of protection for consumers who pay a premium for
ownership.
“In a world full of
counterfeiters and poseurs, protecting clients is vital to protecting the
luxury brand,” notes Chris Ramey, founder of Affluent Insights. “Aura will
secure the traditional pillars of luxury which define luxury brands and protect
their wealthy clients.”
The Aura Blockchain Consortium
will be win-win for both luxury brands and their customers. It restores trust
in a system that desperately needs it.
“Brands can take back control
over the customer relationships and focus on creating long-term value for
themselves by putting the customers first and giving the customers transparent
access to the luxury brands for communication, traceability and purchase,”
concludes Olbert. “This is a great step in the right direction.”
* This article was originally published here
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