“Aura”, the consortium initiated by LVMH and brings together Prada, Cartier and OTB Group, continues to put its farmers in “Web3”. This blockchain product approval solution announced late last month that the integrated solution developed by diamond company Sarine Technologies. The goal ? Guarantee authenticity and respect for ethical principles in the design of their diamonds through their traceability throughout the supply chain.
Because in April 2021, LVMH and its main competitors decided to team up to get the most out of Blockchain technologies. Since then, the Aura Consortium Blockchain has created a digital identity for nearly ten million luxury products, primarily Non-fungible token (NFT). But how to explain the reasons for this shift towards Internet 3.0 by the world leader in luxury? Why is Bernard Arnault’s group, best known for its champagnes and high-end leather goods, so interested in Blockchain and NFT?
Offer customers new guarantees for quality and new experiences
LVMH and its partners first want to take advantage of the commercial guarantees from Blockchain technologies. In a sector plagued by counterfeiting, Blockchain allows brands to increase their credibility by certifying the authenticity of their products. For example, Prada has decided to list all of its products on the Aura platform by equipping them with NFC and Radio Identification (RFID) technologies.
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The blockchain also serves the market for the resale of luxury goods – whose brands now have fully integrated virtuous logic – by giving customers access to a database with all the information regarding the maintenance of the objects they acquire. This is especially the choice Cartier has made when it comes to his watches and jewelry.
In addition, brands investing in Aura intend to attract new audiences who are sensitive to “3.0” technologies, young and connected. It is a tool that can “generates new revenue through attractiveness effect”, explained recently CEO of the Italian group OTB, owner of the brands Diesel, Maison Margiela and Marni. Aura, for example, has developed a solution that enables brands offer their customers gifts in the form of NFTs, which are perfect reproductions, in digital format, of the physical products “said Daniela Ott, general secretary of the consortium, last month.
Last but not least, the luxury giants seem to be investing, not without risk, in investing massively in a sector that is undergoing rapid industrialization. The objective being ultimately to enjoy a competitive advantage when Blockchain in the future will have reached maturity in business.
The metaverse of luxury, between promises and uncertainties
In its “Web3” strategy, LVMH also explores the opportunities that Metaverse offers. And this, “very carefully”, recently stated the CFO of the French group, Jean-Jacques Guiony.
Through investing in Metaverse, it is above all a matter for brands to improve theirs storytelling by immersing customers in a virtual experience capable of building loyalty. According to several sources, LVMH will mainly work on virtual tours in its leather goods workshops as well as on digital fashion shows, where it will be possible to acquire NFTs in preview. The French group is also planning to quickly recruit an “NFT and Metaverse manager”, who last month entrusted its director of information services to Forbes magazine, Franck Le Moal.
At the moment, however, the luxury giants are investing in Metaverset with moderation, eager both to patiently explore a world with vague contours and to guard against economic disasters associated with the bursting of a possible speculative bubble. Without denying the opportunities offered by Metaverse, the head of LVMH, Bernard Arnault, failed to emphasize the risks, recalling that the internet bubble burst in early 2000. And to emphasize that LVMH to date is above all very present … “in the real world”.