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Why LVMH, Prada and Cartier Are Uniting Behind Blockchain

Three of the world’s top luxury brands are aligning to fight counterfeiting with the launch of a blockchain network.

LVMH, Prada and Richemont’s Cartier are officially joining forces to develop the Aura Blockchain Consortium in an effort to counter the authenticity concerns that often arise when shopping for luxury goods and increase customer trust in the brands’ sustainable practices and product sourcing.

The consortium wants to promote the use of a single global blockchain solution open to all luxury brands worldwide, and provide consumers with a high level of transparency and traceability throughout the product lifecycle.

The Aura Blockchain technology is designed to match a product ID to a client ID, providing the infrastructure, through a chain of secure, non-reproducible, digital blocks, that enables consumers to access the product’s history and proof-of-authenticity at every step of the value chain, from raw materials to the point of sale. The private blockchain will record information in a secure and non-reproducible manner and generate a unique certificate that keeps a record of every transaction. It even keeps track of product interventions such as maintenance or repairs.

With the platform in place, consumers would be able to follow the entire lifecycle of a product from conception to distribution with trusted data throughout, without the need for third-party verification. Aura represents a new way for luxury brands to communicate directly to consumers, telling a unique story around the quality of their materials, craftsmanship and creativity, while at the same time developing a way to further build the relationship with the consumer.

Counterfeiting persists as a pesky problem for luxury brands, leaving many looking for answers. Earlier in April, Homeland Security Investigations (HSI) seized more than $1.3 million in luxury designer goods at a Dallas fair, where more than 1,000 items had fake brand names knocking off Gucci, Louis Vuitton and YSL.

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Alongside Prada and Cartier, LVMH-owned Bulgari, Hublot and Louis Vuitton are already active on Aura. Hublot has launched a digital e-warranty, which is stored in the Aura infrastructure and allows customers to verify the authenticity of their watch via a photo taken with a mobile phone.

Brands using Aura can develop their experiences within the platform according to their specificities and customer expectations, so that they can ensure products are made and handled according to the standards they set, as well as have more control over products on the secondhand markets. They also maintain their own data and adhere to the strict standards of client privacy. The luxury brands say that information is stored on the blockchain in a way that cannot be changed, tampered with or hacked.

The consortium is holding “several advanced conversations” with a number of luxury groups and independent brands alike to join, the companies said in a joint statement.

Blockchain technology design studio Consensys and Microsoft Azure power the security behind the platform, which was conceived in 2019 when the three companies first collaborated. Consensys is behind the Aura blockchain infrastructure and the brand API that allows luxury brands to interface with the platform on a white-label basis.

“The Aura Blockchain Consortium is a great opportunity for our sector to strengthen our connection with customers by offering them simple solutions to get to know our products better,” said LVMH managing director Toni Belloni. “By joining forces with other luxury brands on this project, we are leading the way on transparency and traceability. I hope other prestigious players will join our alliance.”

Overall, blockchain is growing in popularity as a deterrent to counterfeiting, with brands such as Amazon, H&M’s Cos, Alexander McQueen’s MCQ, Kering and others tackling the issue in various ways, often as side projects or pilots. Additionally, fiber sourcing companies like Lenzing and Chargeurs are leveraging the technology to give clients and potential new brand partners greater assurance around where their materials are coming from.

But a commitment from three top names in a space so concerned with brand equity and high status would bring even more credibility to the potential benefits that could be harnessed via blockchain technology.

“In an incredible journey together with our luxury partners and in a trustful collaboration never seen before in our sector, we have created an exceptional and innovative project aiming to put our customers at the very center creating major values to them through a sustainable authentication system which will unlock future possibilities,” said Lorenzo Bertelli, head of marketing and head of corporate social responsibility at the Prada Group.

The companies say that the consortium is open to all luxury brands, no matter the sub-sector or geography they operate in. The consortium will support companies of varying sizes and adapt to individual needs. Future financial gains will be reinvested to ensure the platform’s technological capabilities.

“The Aura Consortium represents an unprecedented cooperation in the luxury industry. Blockchain is a key technology to enhance customer service, relationship with partners and traceability,” said Cyrille Vigneron, president and CEO of Cartier International and member of Richemont’s board and senior executive committee. “The luxury industry creates timeless pieces and must ensure that these rigorous standards will endure and remain in trustworthy hands. We therefore invite the entire profession to join this consortium to design a new luxury era enabled by blockchain technology.”