Luxury brand conglomerate, Louis Vuitton and Moët Hennessy otherwise known as LVMH, has stepped into the blockchain space as it announced to launch a blockchain-powered platform, Aura, for authenticating high-end luxury goods.
LVMH, the owner of the iconic Louis Vuitton label, controls over 60 luxury brands across various categories like watches, jewelry, perfumes and cosmetics, fashion and leather goods, selective retailers, even wines and spirits.
The group reported revenues of $53 billion in 2018 only, in addition to Louis Vuitton, another LVMH brand Parfums Christian Dior, has struck a partnership with the blockchain software technology company, ConsenSys and Microsoft for their blockchain endeavor. LVMH recruited a full-time blockchain team, which purportedly has been operating in secrecy for over a year now, working in alliance with ConsenSys and Microsoft Azure.
The partnership resulted in the platform named, AURA, a cryptographic provenance platform specifically designed to serve the entire luxury industry with powerful product tracking and tracing services. According to the press release:
AURA makes it possible for consumers to access the product history and proof of authenticity of luxury goods — from raw materials to the point of sale, all the way to second-hand markets.
AURA is a new blockchain, based off of the permissioned version of the Ethereum blockchain, called Quorum. Designed through JP Morgan’s partnership with the Ethereum Enterprise Alliance, Quorum specifically focuses on data privacy as well as transparency.
The technology can store unique information about every product stored on a shared ledger and customers are then able to use the brand’s official application to obtain a certificate, offering details about its background. According to reports, AURA will also offer ethical and environmental information, instructions for product care and warranty services. It is expected to go live later in May or June with Louis Vuitton and Christian Dior initially, however, it will be extended to LVMH’s other 60-plus luxury brands and eventually those of its competitors.
The team behind AURA hopes that in the near future it will be used by rival luxury brands as well, which will enable them to offer tailor-made services and strengthen customer loyalty. According to Ken Timsit, managing director of ConsenSys Solutions:
AURA is a groundbreaking innovation for the luxury industry. ConsenSys is proud to contribute and to work with LVMH on an initiative that will serve the entire luxury industry, protecting the interests, integrity, and privacy of each brand.
Although not much was revealed regarding the platform but it is expected that AURA will be used to prove the authenticity of LVMH’s luxury products, allowing for the tracking of origins to the point of sale. The second stage of the project, according to reports, will explore the protection of creative intellectual property, in addition to exclusive offers, events for customers and anti-advertising fraud.
However it is not the first to propose the idea of an authenticity-tracking blockchain, there are other luxury brands provenance platforms out there. The French startup Arianee claims to be building perpetual relationships between brands and owners made of trust, respect and transparency. The startup boasts former employees and advisors from luxury brands such as Tiffany’s, Omega, Balenciaga and the Richemont group.
The team behind Arianee created a new blockchain, which was a copy of Ethereum, thus combining both permissioned and permission-less elements through its use of a consensus mechanism, it’s calling “proof-of-authority.” It is permissionless in the sense that users who are interested in selling their products to one another can interact with the blockchain, but the verification of the ledger and issuance of new tokens is controlled by the participating businesses.
Furthermore there have been other high-end brands that are turning to blockchain technology for the reason of provenance. Recently, the premium scotch whiskey brand Ailsa Bay, which is owned by William Grant & Sons (WG&S) and has yearly revenue of about $80 million, was in the news for releasing world’s first scotch whisky tracked with a blockchain-based system.