What is Blockchain doing in my Miu Miu Ballerinas?
In the words of paul simon, “she’s got blockchain on the soles of her shoes.”
TL;DR Blockchain technology is reshaping how luxury brands offer transparency in their supply chains.
So what? Bought anything from LVMH, Prada Group, Richemont or Mercedes-Benz? It’s probably on the blockchain (specifically Aura.)
Blockchain technology is revolutionizing authentication, distribution, and tracking of high-end goods. But if you just want the Miu Miu ballerinas (because yes, they are chic AF) why should you care? As an open, secure and unchangeable record, blockchain is the foundation of cryptocurrencies and a fundamental part of Web3. It's these qualities - transparency, security, and immutability - that make it central to how brands from Louis Vuitton, Cartier, Prada and it-girl little sister Miu Miu are using it to elevate their customer experience.From the start of the manufacturing process in ateliers and workshops, right through to the resale market these are the different ways the luxury industry is innovating with blockchain.Enhanced authentication and anti-counterfeiting measures
Counterfeit luxury goods have long plagued the industry, causing financial losses and damaging brand reputation. It’s a $3 trillion industry, one that LVMH reportedly employs 60 lawyers to combat.
Blockchain offers a powerful solution to authenticate goods from high end retailers by providing a permanent record of each product's origin, manufacturing process, and ownership history. By digitally encoding this information on the blockchain, customers can easily verify the authenticity of luxury items, ensuring they are purchasing genuine products.Transparent supply chain management
Blockchain enables a transparent and traceable supply chain, which is crucial for luxury brands that prioritise ethical sourcing and sustainability.
In 2021 LVMH, Mercedes-Benz, OTB Group, Prada Group and Richemont founded the Aura Blockchain Consortium. The consortium promotes the use of a single global blockchain solution open to all luxury brands of all industry sectors worldwide,” accelerating “the transition to a circular business model, trust and transparency for customers, innovation and sustainability.”
Through blockchain, every step of the design and manufacturing process, from raw material procurement to creation and distribution, can be documented and verified. This ensures that luxury goods are produced in compliance with ethical standards, such as fair labor practices and environmentally sound processes.
Credit: Aura Blockchain Consortium
Provenance, ownership and the second-hand luxury market
Every time a luxury item is sold or exchanged, a record can be created on the blockchain.
This builds a reliable history of ownership and makes verifying the background and legitimacy of second-hand luxury items on platforms like Vestiaire, The Real Real and Depop easier for customers through the reduced risk of fake or stolen goods and brand assurance that follows for both luxury brands and secondary marketplaces alike in the circular economy.Tokenisation of luxury assets
Blockchain enables the tokenization of luxury assets unlocking new possibilities for fractional ownership and investment opportunities.
Watchmakers like Rolex, have already lodged trademark applications for NFTs and cryptocurrency and a new Takashi Murakami x Hublot collaboration has released 13 NFTs linked to physical watches.
Through tokenization, high-value luxury items, such as rare artwork or limited edition watches, or handbags can be divided into digital tokens. Investors are given the chance to possess a partial stake in certain assets and can exchange these tokens through blockchain-enabled platforms, thereby increasing the level of liquidity and availability in the luxury sector.Personalised customer experiences
Blockchain technology can empower luxury brands to create personalised customer experiences and loyalty programs. Brands can securely and discreetly store customer data on the blockchain, ensuring their access to accurate customer information to inform tailored customer experiences.
With this information, businesses can give personalised recommendations, special offers, and rewards based on individual tastes and past purchases. This strengthens the bond between customers and the company, and improves luxury or high-end shopping experiences.Transparency, security, and the permanency of quality have long been values luxury shoppers seek from brands. It’s these exact qualities that give blockchain technology great potential to revolutionize the luxury market. It can prevent fraud, make supply chains more transparent, allow fractional ownership, and provide customers with a more personal experience. As the technology advances and adoption and popularity increasy, the trend is likely to continue leading to innovative methods of producing, selling, and enjoying luxury goods.
Oh and yeah, if you bought the ballerinas - they’re on the blockchain too.