Luxury fashion brands are looking beyond the trauma that the crypto industry is currently facing to create “digital twins” for their designer products.
Luxury giants LVMH, Prada, and Cartier joined forces to launch the Aura Blockchain Consortium, a non-profit platform to create a digital twin for their fashion items. The platform leverages blockchain technology, which has the features of transparency and immutability to ensure that consumers of the brands are buying original copies.
Through blockchain, Aura creates unique digital identifiers of luxury products and so far, 20 brands have signed up on the platform with over 17 million products listed. Daniella Ott, general secretary of the platform, noted that although the brands are competitors, “they are collaborating on this technology to move this ahead faster, in the most secure way.”
The need for collaboration amongst luxury fashion houses is not far-fetched. The industry lost nearly $100 million to counterfeits in 2021 with the figure projected to be higher by the end of the year. Aside from the loss of revenue, brands face the risk of damaged reputations from the activities of counterfeiters.
Energy-efficient but watch out for the downsides
Aura works by creating a compendium of information about the listed items, including the date of manufacture, type of material, and the number manufactured in the particular lot. According to Ott, Aura’s creation of a digital twin for physical items offers military-grade encryption and can be accessed through the platform’s mobile app or via a web app.
While blockchain technology has been criticized for its environmental sustainability and energy efficiency, Aura claims to be bucking the trend. Ott revealed that as a private blockchain, it uses a fraction of the energy consumed by public blockchains like Bitcoin and Ethereum. Aura comes fitted with the additional functionality of allowing brands to filter the type of information listed, and the ease-of-use means brands can get started with “zero blockchain knowledge.”
In terms of governance, the founding firms that contributed the lion’s share of Aura’s development play a larger role in the decision-making process. Other firms joining the platform are required to pay a licensing fee, but Ott warns firms to keep an eye out for the limitation of blockchain tech. She warns that brands should have good relationships with their suppliers or else, “blockchain will not help” because of potential errors in inputting information.
Other uses of blockchain in luxury
Last week, Balmain announced a partnership with Jeff Cole to drive awareness for the brand’s new Unicorn sneakers collection using NFTs. Audemars Piguet and Vacheron Constantin joined Paris-based open-source blockchain platform Arianee to leverage the offerings of NFTs.
Karl Lagerfeld’s photographic collection also uses blockchain to verify their originality, while Mercedes-Benz has joined Aura to create NFTs for owners of the brand’s automobiles. Ott hopes to “onboard every luxury brand” including cosmetics, furniture, and even perfumes on Aura.
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Source: https://beincrypto.com/crypto-can-save-the-fashion-industry-despite/