Blockchain and high-end fashion

You’re a customer looking to add that piece of high-end clothing or accessory to complete your look. You want to know that the item you’re purchasing such as Louis Vuitton bag or Prada belt is the authentic item and not an imitation, but how do you know?

When purchasing the product from a company’s store or online you can be certain it’s the real thing, but when buying from a third-party seller can you be sure that what you are buying is not a fake?

Knock off products de-value the brands and cost luxury companies an estimated $30.3 billion in lost revenue. High-end fashion businesses have tried to fight back with measures such as unique serial numbers and holograms for their products, but these efforts have not been able to stop the growth in counterfeit goods over the last few years. One solution that could solve this problem is blockchain.

The transparency that blockchain can provide is unparalleled to the other tools and techniques that have been used by fashion brands so far. For example, it could provide transparency in the supply chain from the moment a piece of silk is spun to its dying and purchase. In fact, the whole journey of a product can be traced on the blockchain, enabling luxury brands to tell a compelling story to their customer exactly about the creation of every item.

A key part of enabling this transparency is that the data collected on each item is digitally recorded in a decentralised ledger of records. Items are methodologically tracked through each stage of the process and all suppliers are connected to the blockchain network to agree proceedings. When these factors are met, then brands can provide that visibility of the supply chain, enabling them to tell consumers that the clothing or accessory they are purchasing is truly authentic.

One luxury brand – LVMH (the group that owns Dior, Louis Vuitton and others) has seen the value in blockchain to provide this visibility and is developing their own platform ‘Aura’. They believe that the platform “…will provide proof of authenticity of luxury items and trace their origins from raw materials to point of sale and beyond to used-goods markets.” (CoinDesk, 2019)

The ‘Aura’ platform is built on the Ethereum blockchain (explanation of the technology here) and is a permissioned consortium network whereby other luxury brands can join the network if they believe it provides the transparency that consumers are looking for. Initially the platform is only being used by the Louis Vuitton and Dior perfume brands of LVMH but if successful, it will certainly be rolled out to other brands. Customers of these brands will soon be able to receive an Aura certificate on purchase of their product to confirm details on the item’s origin and components.

With one of the most well-known luxury brands realising the potential blockchain to enhance authenticity and dampen the effects of counterfeit items it will not be long before other luxury companies are joining the ‘Aura’ platform or developing their own blockchain solution.

However, we are still at the starting point for these luxury brands using blockchain to tackle counterfeiting and as pointed out in one of our previous blogs , there is still considerable effort required to see blockchain used and scaled across industries.

Overall, it’s clear to see the potential that blockchain can have for luxury brands and that some companies are now developing their own platforms to take advantage of this opportunity. At Capgemini Invent, we have worked with selected luxury brands to develop their blockchain use cases and are excited to understand and explore opportunities with other brands to see how we can support their journey onto the blockchain. If you would like to have a more in-depth view of how Blockchain can revolutionise the supply chain, take a look at our research on the topic.

Author

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Jonathan Chappell

Jonathan joined Capgemini in September 2015 after studying Economics and Geography at UCL. During his tenure he has worked on two large regulatory programmes at Lloyds Banking Group. He is currently delivering technology transformation for a major fast moving consumer goods organisation in their accounting and finance division.