Luxury and Fashion Companies Turn to Blockchain To Protect Brand
Blockchain technology is finding its way away from the confines of agriculture, and one of the industries that have begun to leverage the technology big time is the fashion industry, specifically the luxury goods sector.
Here, the supply chain market is seeing significant uptake, one being a recently launched platform from ConsenSys that has brought on board French luxury goods multinational LMVH and the tech giant Microsoft.
The deal is to use the blockchain-based platform in verifying the authenticity of major luxury goods.
Luxury brands trial blockchain
Consumers all over the world are increasingly becoming aware and concerned about the origin and authenticity of the goods sold in local stores, with the major concern being the potential for unethical practices along the supply chain.
Companies, on the other hand, want to establish sustainable and profitable businesses and have thus begun turning to blockchain technology as a solution to global supply chain management.
Thus, LMVH and Microsoft developed the new Ethereum-based platform called Aura. ConsenSys helped design the Traceability Smart Contracts and the overall blockchain infrastructure for the platform that will also use Microsoft’s Azure.
A press release described Aura as a Quorum-based “permissioned consortium network” that incorporates privacy.
According to the press release, the project has already attracted several top brands under the LMVH conglomerate, including Louis Vuitton and Parfums Christian Dior.
In its May statement, ConsenSys noted that AURA would make it possible for luxury goods clients and consumers to access such information as “product history and proof of authenticity.” The details will include the origin of raw materials; the point of sale, and even up to second-hand markets.
The luxury fashion world is a very competitive industry, just like the rest of global markets. However, in creating the Aura platform, the team is optimistic there will be more cooperation among various players.
The desire is to see the “groundbreaking innovation” help protect the interests of the entire industry, but all the while safeguarding the “integrity and privacy of each brand.”
Another blockchain tech initiative is being driven by Alyx, a luxury brand that has teamed up with German-based blockchain foundation IOTA and global manufacturing company Avery Dennison.
Apart from using the Iota technology to improve its supply chain, Alyx wants to use the platform to allow its customers access to details from the first stitch on the products to their point of sale.
Avery Dennison’s director of sustainability Debbie Shakespeare reportedly noted of the initiative:
“Brands and consumers can know that the information they are being shown about the garment’s creation process is 100% accurate and can be trusted implicitly.”
In an interview with GQ, Creative Director Matthew Williams said that Alyx “[was] doing a blockchain prototype that shows the raw material to the finished garment.”
So why blockchain
Companies across the globe, right from agriculture all the way to high-end luxury and fashion, have been looking into blockchain as a solution.
Blockchain and DLT lead at the nonprofit World Economic Forum Nadia Hewett, recently said that blockchain brings more than just “standardization and transparency” to a supply chain market that is often fragmented.
Other than being deployed to provide for product provenance, blockchain boasts “features that can help trace a product’s digital footprint.” And because the data is tamper-proof, users can easily retrieve a product’s “full history of activities.”
Additionally, large, multinational companies will also benefit from the use of blockchain and DLT to not only streamline their structures, but also tighten security.
Large companies can exploit secure data-sharing via smart contracts and accelerate transaction execution all the while having a reduced margin for errors or other related misunderstandings.
The unique environment that blockchain provides is already seeing a fiercely competitive international business market seek various collaborations to benefit even more.
Last year saw global food giants like Nestle, Walmart, Unilever, and Dole partner IBM on the blockchain initiative Food Trust. The system is designed to help partners, as well as competitors, further their collaboration via a single record system.
According to Sumedha Deshmukh, a blockchain and DLT specialist at the World Economic Forum, large multinationals are building these partnerships with an eye for “interoperability, inclusivity, and integrity.”
He adds that these companies also understand that collective deployment could be huge in terms of reducing the impact of any inadvertent consequences and risks.
But despite the wave that has seen several major companies turn to the blockchain, a recent survey by Gartner found that just 19% of businesses rate blockchain technology as important. Only 9% of these companies have gone on to invest in the technology, while 90% will suffer “blockchain fatigue” by 2023.
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