Blockchain Industry Observation Column · Part 9
Picture丨From the Internet
Picture丨From the Internet
Traditionally, the luxury industry has been associated with the upper class. Competitive price points will return to pre-pandemic conditions, driven by limited distribution and celebrity endorsements. Overall, the luxury apparel and accessories market seems to have carved out a niche for itself focusing on luxury-loving consumers, and has segmented the market around them.
According to Statista data, in 2021, the global luxury industry is expected to be valued at approximately US$107.9 billion. Its strong market segmentation makes it possible for the global luxury goods industry to achieve this goal during the epidemic. More importantly, this market segment is expected to grow at an annual rate of 4.8% (CAGR 2021-2025).
While it sounds positive for the luxury industry, the industry actually faces significant policy challenges. A particularly prominent challenge is to forge, there are a large number of brands of multinational companies specializing in luxury goods such as Louisdon and Kering, whose goal is to maintain (product) availability and (product) exclusivity in a highly competitive market. In 2020, Francois-Henri Pinault, President and CEO of Kering, stated that the revenue of his group has reached 13.1 billion euros, which is about 15.49 billion US dollars.
In fact, major brands are sparing no effort to maintain exclusivity and combat counterfeiting. They even burned products worth billions of dollars. However,Destruction of overproduced products to preserve exclusivity is repulsed by consumers. Consumers boycotted the brand after news broke that London-based Burberry had burned the companys overproduced merchandise.
In short, contemporary is a discreet business world. In other words, the relevance between brands and consumers today enhances consumers voice. While the boycott has forced Burberry to stop burning its surplus, sadly, consumer backlash has taken its toll on the brands image.
Brian Foote, founder and CEO of HUMBL, uses blockchain technology to develop a new product line called Origin Guarantee through NFT (Non-Fungible Token), while also targeting some Challenges of the expected growth of the fashion industry.
HUMBL Marketplace recently partnered with Hollywood celebrity photographers Smallz + Raskind to tokenize and register luxury prints on the blockchain, ensuring customers receive a certificate of authenticity and a digital signature with a QR code to track the life of the product cycle.
Ensuring the availability of luxury goods via blockchain is becoming increasingly important for both retailers and consumers. more importantly,Blockchain can not only track the production procurement process, but also the supply chain of fashion brands。
When it comes to millennials and Gen Z, they often feel excluded from the luxury shopping experience. On this point, most marketers are well aware that this age group will always favor experiences over purchases. I think what Im saying now is a bit preachy, but what I have to emphasize is that technology is an effective way to seize this emerging market.
“Tokenization of luxury goods on the blockchain will create exciting opportunities for the high-end fashion industry and appeal to a young market.” Brian pointed out that “luxury goods, NFTs, physical objects and only insiders can understand the circulation of assets on the blockchain.” Demonstration is going to happen at HUMBL.
Customers of luxury and consumer fashion find what they want on one platform, and making the shopping experience seamless is key to market growth.
“In the fashion industry, smooth shopping is key for luxury brands to remain relevant. Smart luxury brand products based on blockchain-powered Web3.0, which can be accessed in the primary and secondary resale markets are very important, especially Among the luxury brands that have longer life cycles,” Ford noted.
In the post-pandemic period, many long-standing traditions have been abandoned, and more and more fashion brands have begun to abandon standard business practices and have a clear understanding of the advantages of blockchain technology. Recently, I participated in a remote forum hosted by experts discussing the opportunities New Yorks fashion tech agency may offer luxury fashion and beauty brands. At this time, the brand clarified its market strategy and put forward its appeal for the adoption of blockchain technology.
“Blockchain technology provides full transparency of the product from its inception to its final use. The technology allows users to track and trace the legitimacy of any product from luxury fashion to basic necessities.In this way, blockchain can encompass a variety of companies, consumers, and social groups, including sustainable sourcing, identifying the provenance of all goods along the supply chain, and further increasing trust between brands and numerous stakeholders.” NYU Fashion Technology Vincent Quan, an associate professor in the Facultys Department of Fashion Business Management, pointed out.
Unlike in the past, when consumers of high-end luxury fashion were no longer confined to the in-store shopping experience, technology now provides busy high-net-worth individuals with the experience they want in their homes and offices, and even on their mobile phones. Virtual reality technology can accurately capture the consumers body shape and measure the size, while the blockchain keeps a record of its repeated shopping experience.
This is even more common today, with brick-and-mortar stores closed due to the pandemic. Max Krupyshev, CEO of crypto payment processing gateway CoinsPaid, shares the same sentiment. Since the start of the pandemic, his company has seen the consolidation of luxury brands. Max Krupyshev pointed out that with the development of blockchain technology and the acceptance of cryptocurrencies as a means of payment, more luxury brands can reach a wider customer base, especially millennials who are the biggest fans of digital assets.
The report of Harvard Business Review pointed out that the total global counterfeit trade is 4.5 trillion US dollars, of which 60% to 70% are aimed at the luxury goods market. Another World Trademark Search report pointed out that 18 states in the United States lose as much as $12 billion a year due to counterfeit luxury goods.
When asked about the importance of implementing blockchain technology in today’s luxury industry, Luca Spano, Director of Luxury Industry IFG, believes, “For many companies, it is a very important part and should be implemented as early as possible. The pandemic has pushed our industry forward by a decade, forcing us to understand all that technology can do for a prosperous and strong economy. Marketing must pre-think and clearly make blockchain implementation one of their top priorities.”
Tokenizing on the blockchain allows valuable luxury goods such as bags, shoes or luxury watches to be given a unique identity that cannot be tampered with. The identity of the product is recorded in the blockchain ledger and tracked all the way to the final consumer. at the same time,Consumers can become more and more aware of their brand culture by understanding the production route of products. Using this technology eliminates the wasteful and environmentally harmful process that the luxury industry employs to combat counterfeiting.
At the same time, Rafael Papismedov, Managing Partner and Director of Strategy at HB Antwerp mentioned that Innovative blockchain technology enables HB Antwerp to track the entire process of products from mine to hand. This is crucial for todays luxury consumers. The average age of HB Antwerp consumers is much younger than it was five years ago, and more of them are women.
Millennials, Gen Z are more confident and know the world better than previous generations. They demand that brands respond to their demands and value fair trade. They pay more attention to the conditions under which the product is produced, what is the impact on the ecology, what are the working conditions for the production of the product, and they want to know all about the product, whether the company produces chocolate or diamonds.
We use blockchain technology and data visualization technology to monitor and record all steps in the process from mine to jewelry, building an ecosystem called Signum. In this ecosystem, participating partners can exchange information with each other. Thanks to the Signum ecosystem, jewelers working with HB Antwerp are now able to tell their consumers where their diamonds come from, how they were mined and when they were discovered.
I dont think the luxury fashion industry should be limited to its traditional problem solving. By maintaining exclusivity and ensuring anti-counterfeiting, blockchain technology can bring more opportunities to the current challenges facing the luxury fashion industry.
——This article comes from www.forbes.com, by Joseph DeAcetis, American luxury fashion industry reporter and international editor.
