LVMH, Prada and Richemont announced the establishment of the new consortium chain Aura, once again bringing the blockchain into the spotlight. We decipher the frictions between usage, competition and transparency and brand control.
In September 2019, executives from LVMH, the Prada Group, Richemont and others met at the historic Louis Vuitton villa in Asnires-sur-Seine to finalize the creation of a new space for technology companies Consensys and Microsoft. Details of the blockchain platform. The point is that the companies, as competitors, come together to develop a blockchain platform to verify the authenticity and provenance of luxury goods.
Timothy Iwata Durie, Cartiers global innovation director under the Richemont Group, who participated in the discussion, said: We discussed many details together, such as what is the appropriate legal entity?, what are the management principles?.
the result isCreate a non-profit alliance chain called Aura, open to any luxury brand (they pay a license fee and a fixed fee per product), able to trace and track any non-fungible token (NFT) based A product of identity, all brands collectively contribute to blockchain governance and strategy.
This rare collaboration between luxury goods manufacturers is driving the development of blockchain, which is getting more and more attention in luxury goods as consumers expect transparency and fashion trends turn to pure digital products. It has had fits and starts in fashion and elsewhere. (The Facebook-led Libra consortium chain, also announced in 2019, eventually lost 25% of its inaugural members before eventually changing its name.)
Aura is a brand new fashion industry blockchain entity that has joined other networks like Arianee and VeChain. Arianee has cooperated with Bash, Audemars Piguet and Vacheron Constanti, while VeChain has cooperated with Givenchy and HM.
Aura is a private chain, which means that only companies on the network have full access and control over their data, and brand and customer data can only be accessed by that brand.While the Aura consortium chain marks a significant development in blockchain technologys relationship to the luxury industry, it also raises questions about how a private blockchain can maintain transparency without public How to join the chain project brand.
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1. Aura alliance chain plan
The Aura consortium chain verifies products by assigning each product a unique digital identity, which contains traceable information.Durie noted that other features could be added over time, and technical plans are being developed. Product information can be attached to products through QR codes or RFID tags, which Prada is already using.
Franck Le Moal, chief information officer of LVMH, said that in the past year, the sharp growth of digital products and remote sales has made the track and trace function more important, and this has been the focus of the Aura alliance chain. Brands have also begun to endorse the Aura alliance chain and participate in leasing and resale, and carry out product certification. At the same time, they have also begun to try digital clothing and NFT (unique tokens on the blockchain).
(When the watch is sold, Hublot provides an electronic warranty by visually identifying the microstructure of each part and storing it on the blockchain. At the same time, if the Hublot watch is stolen, the electronic warranty can reflect its status to prevent resale .)
Cartiers Durie noted that further conversations are currently underway with other groups and own brands. LVMH-owned Bulgari, Hublot and Louis Vuitton, as well as Prada and Richemont-owned Cartier, all already use the platform.
“Consumer needs have changed, and the focus on sustainability has accelerated the urgency. This has prompted us to reshape our beliefs and make us more open to meet consumer needs by providing tools for verifiable transparency.
LVMHs Lemoal said that the Aura alliance chain does not force brands to adopt any specific use, but provides members with an accessible platform with various functions throughout the product supply chain. Most people will use it to provide product information about the beginning of procurement, such as raw materials and factories, and extend to after-sales service and second-hand goods. At the same time, depending on the brand, it can also be used to provide NFT collections.
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2. Exclusive luxury blockchain?
Aura is an open alliance chain, but not open to everyone. Carriers can decide to hide or show the events they track within the system, meaning customers only see the parts a brand has given them access to. Interested brands submit applications to the Membership Committee, which reviews and makes recommendations to the Board of Directors. “We are not a gentlemen’s club, as long as you are a luxury brand, you can join. However, there is still a code of conduct and terms of use.” Durie said.
A notable example is,Durie believes that while the technology may enable a brand to create NFTs, the alliance will not encourage members to engage in speculation related to the hype.Luxury brands need to be built for a long time. It is important to do one thing, but we are a luxury brand, and it is more important for us to do things for a long time. Its really rooted in the values of the luxury brand.
(The RFID (radio frequency identification) tags in Prada handbags could eventually be scanned to reveal product information and any other features or details added later. The Prada Group is a founding member of the Aura consortium chain.)
For this alliance chain, a noteworthy outlier is Kering, the owner of Gucci. Chief customer and digital officer Grégory Boutté mentioned in the 2019 Global Vogue that he is open to cooperation with LVMH and Kering, and uses a third party to test the authenticity of Ulysse Nardin watches and Kering glasses.
Both Kering and LVMH have confirmed they are in talks for Kering to join Aura. “The group has not identified a use case that cannot be done with existing blockchain solutions and has already launched several initiatives in this area,” said a spokesperson for Kering.
Others operate slightly differently, with fashion blockchain startups such as Lukso and Arianee operating public, decentralized blockchain open-source protocols, meaning anyone can join and customers can see the product Every dynamic in the life cycle.
LVMHs Le Moal said creating a private bespoke platform in-house was important for controlling processes and data without third-party intervention, compared with existing options.
Through our collaboration and scaling, we have the ability to set standards, Durie said, We need to make sure that we dont put important customer data in the hands of third parties, or expose it on open source platforms, we have been around for hundreds of years. , instead of 5 years,Protecting the integrity of our customers information is important.”
(Since February 2021, all Breitling watches have had digital passports using blockchain. Customers can generate digital certificates for both new and vintage watches, and simply scan the back of the watch to download their unique digital passport.)
At the same time, Arianees public blockchain and open-source solution means that the code is already public, people can contribute and build infrastructure on top of it, and brands can build their own interfaces.
CEO and co-founder Pierre Nicolas Hurstel said the Paris-based company, which offers digital passports for luxury goods, focuses less on supply chain information and more on attracting customers after a sale or resale.
Breitling, for example, attaches digital IDs to its watches and uses them to offer some promotions to owners, while allowing customers identities to remain anonymous. Arianee also has a not-for-profit association, the Richemont Group, one of its 35 members, just raised $9.5 million from French government funds.
Arianees Hurstel said open source allows for completely transparent oversight by the public. Antonio Carriero, chief digital technology officer at Breitling, added that open source and decentralized infrastructure is the best way to build trust. Currently, he sees Aura and Arianee as compatible and complementary rather than competitive, using one or both depends on the priorities as a brand.
Hernandez of Lukso said,While a private blockchain for track and trace is a great idea, the power of blockchain technology ultimately lies in decentralization, meaning there is no central authority, which raises some questions about Auras control.“In order for users and third-party companies to verify product ownership and true transparency, product identities need to exist on a distributed, permissionless public blockchain,” she said.
Auras Le Moal and Durie said they were open to an eventual partnership. We cant say it will always be like this, but for the time being, we need to develop ourselves. We want to make sure we focus on the luxury industry, after all not every other company is focused on luxury, Le Moal said.
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3. Whats next?
As more and more luxury brands consider adding blockchain strategies, people are starting to question how different blockchain networks can interact. In theory, a product can be added to multiple chains. According to Megan Kaspar, managing director and co-founder of investment incubator Magnetic,This so-called interoperability is critical to the technologys success.
Natasha Franck, Eon’s founder and CEO, recently partnered with Gabriela Hearst and Yoox Net-a-Porter to provide digital IDs for products worldwide, “We create these products, but they can’t be shared with resellers. Interconnection is the foundation for building a stronger digital ecosystem, and as long as things can interact, more value can be added to the entire network.
At the same time, Aura welcomes others to join, and Cartiers Durie said that it is also open to individual brands and brands that are not part of fashion. The harder we work, the better it will be for our industry.
Original report from www.voguebusiness.com by Maghan McDowell, innovation editor at voguebusiness. The Chinese version is compiled and organized by the Chain Market team, and the English copyright belongs to the original author. Please contact the editor for Chinese reprint.
