Three European rivals are joining forces in an “unprecedented collaboration” to help consumers trace the provenance and authenticity of luxury goods.
LVMH Moët Hennessy Louis Vuitton, which in 2019 initiated the Aura platform, will be joined by Prada Group and Compagnie Financière Richemont in the Aura Blockchain Consortium, which will promote the use of a single blockchain solution open to all luxury brands worldwide.
Bulgari, Cartier, Hublot, Louis Vuitton and Prada are already keyed into the platform, which will give consumers direct access to a product’s history, proof of ownership, warranty and maintenance record.
According to a joint release revealing the creation of the consortium, it is in “advanced” discussions with several independent brands, and “brands within founder groups” to join soon since the blockchain “offers flexibility to support companies of various sizes and to adapt to individual needs.”
LVMH, Prada and Richemont worked together to create a “single solution to address the shared challenges of communicating authenticity, responsible sourcing and sustainability in a secure digital format.”
Known as a “multinodal private blockchain,” the platform records information in a secure and non-reproducible manner and generates a certificate for its owner, “enhancing the desire for beautiful objects made with savoir-faire and high-quality sustainable materials,” the consortium said.
It stressed that “luxury brands have a unique story to tell on the quality of their materials, craftsmanship and creativity” and that the blockchain would “increase customer trust in the brands’ sustainable practices and product sourcing.”
The Aura platform was developed in partnership with Microsoft and New York-based blockchain software technology company ConsenSys, and the consortium will operate out of Geneva.
In an interview, Toni Belloni, group managing director of LVMH, said consumer demand to know more about what they buy — from authenticity to traceability along the supply chain — is growing and has not been fully satisfied, until now. The blockchain will allow a jewelry purchaser to have information on ethical sources of diamonds, for example.
What’s more, luxury clients will be better served by “an industry standard rather than having to deal with the complexity of each brand having its own approach. The customer will have one known and trusted platform,” Belloni said.
Lorenzo Bertelli, head of marketing and corporate social responsibility at Prada Group, agreed, mentioning the confusion engendered by having various operating systems for mobile telephones.
“It was a common-sense decision,” he said when asked about joining forces with rivals. “It’s easier for everyone to build something together, instead of everybody investing by himself only to find out that is better to find a common platform, a common language.”
He noted Prada has yet to launch its consumer-facing app and online “environment,” but has been readying for the Aura blockchain by embedding radio-frequency identification chips, or RFID, into “millions” of products, which began reaching stores in the second half of 2020. Consumers can register their products retroactively as soon as its app goes live.
“In our eyes, it’s a service,” he said, speaking over Zoom, noting that the “hardest part” is deciding how to best leverage the blockchain as another differentiator for makers of luxury goods. “Every brand will have his own strategy.”
Louis Vuitton was the first to leverage the Aura platform and has already issued a “very significant” number of certificates, Belloni said, characterizing the blockchain as a tech-enhanced update on guarantee certificates sold with products such as high-end watches. “This is another way of protecting the brand and the purchaser.”
For brand marketers, the blockchain also offers a weapon against counterfeiters and gray-market distribution, he added.
Belloni said LVMH invested “a few millions” to establish the initial Aura blockchain, and there is a mechanism so the shared investments of the consortium founders are refunded over time, while ensuring that monies be invested to continue improving the…