Aura: When the luxury industry bets on blockchain to improve the sector

According to the Ministry of Public Accounts, almost 5.64 million counterfeit luxury goods were intercepted at French customs in 2021. This is equivalent to a 20% increase compared to the previous year and the numbers continue to climb. A consortium of luxury brands wants to leverage blockchain to protect markets against this scourge plaguing the industry. This technology allows them, among other things, to ensure the traceability of products and guarantee their authenticity, but also to control second-hand markets.

Aura: Guarding against rampant counterfeits

The luxury industry has always suffered from counterfeits. LVMH, which owns more than 70 luxury brands, is betting on the blockchain to fight against this scourge. The group has developed Aura Blockchain Consortium, a private blockchain whose main objective is to guarantee the traceability and authenticity of luxury products.

Aura: Brief Historical Overview

After having matured the idea of ​​exploiting the blockchain to eliminate the problems specific to the luxury industry, mainly counterfeiting, LVMH developed Aura in collaboration with Microsoft and ConsenSys, a provider of blockchain solutions. The group officially presented the project in March 2019 as part of the VivaTech trade show.

LVMH group brands, including Hublot, Bulgari and Louis Vuitton, are the first to join the platform. In April 2021, the Richemont group (known for its luxury watchmakers, including Cartier) and Prada join the adventure and expand the consortium.

A private blockchain

Aura is a private blockchain, which assumes that its members have full control of their data and can manage it with the highest possible privacy standards.

“Aura Network is a sovereign blockchain. This means having its own decentralized infrastructure that can be independently governed by Aura Community rather than depending on other Layer 1 chains.”

Team in the project whitepaper

This year, LVMH introduced a new feature called Multi-Token Minter (MTM) on its network. This feature allows consortium members to create smart contracts that can be deployed on Aura and any other public blockchain, including Ethereum, Solana, and Cosmos.

Aura: Guarantee the traceability and authenticity of products

To fight against counterfeits, Aura wants to give customers the possibility to verify the authenticity of a product throughout its entire life cycle. In this perspective, the consortium relies on the blockchain to ensure traceability at all levels.

Production

A unique digital identifier (ID) is created during the production phase of a product. The identifier contains all the information relating to the product: materials, places of manufacture, etc. All this information is entered into the blockchain and remains immutable. The ID is used by the buyer to verify authenticity upon purchase.

Marketing

During distribution, each transaction is recorded in the certificate of authenticity. The registration is made from the first sale and for all subsequent resales. Buyer may transfer ownership by giving away or reselling the item. All this information is recorded in the item’s certificate.

Purchase

Upon purchase, the customer receives a Certificate of Authenticity with the Aura logo and product ID. It is impossible to modify the information entered on the blockchain. The identifier is therefore tamper-proof and guarantees the originality of the product to the buyer. The certificate also provides him with all the information on the production, circuit and condition of the item purchased.

Maintenance and after-sales service

All product maintenance steps will also be recorded in the certificate. This information will give the buyer clear indications of the condition of the item. In short, with Aura, customers can find out the history of a purchased product, obtain a certificate of authenticity and proof of ownership, and then access warranty and maintenance/servicing information.

Aura, for a reliable and ethical second-hand market

Aura also allows luxury brands to master the second-hand markets. According to a study conducted by Fevad, (Federation of e-commerce and distance selling) and KPMG (a network of audit firms), the French second-hand market weighed 7 billion euros in 2022. worldwide, this market in the fashion and luxury sector is estimated at 34 billion euros in 2021. The market continues to climb. On the other hand, 23% of buyers admit that they do not buy luxury products online on this market because there are no guarantees.

The Aura blockchain precisely rectifies this lack of guarantee by ensuring the traceability of products in complete transparency. When a luxury item changes hands, the manufacturer effectively loses traceability. But with Aura, the entire product history is logged on the blockchain. The manufacturer knows who the new owner is and can even communicate with them directly.

Create a privileged relationship with customers

Thanks to Aura, customers will be able to communicate directly with brands. This means, for example, the possibility of participating in community discussions and activities, receiving personalized invitations to events and after-sales services, etc.

Any brand can join the project, even if they have never worked with blockchain technology before. By joining Aura, luxury brands can take advantage of innovative technologies and benefit from full process transparency that enhances the customer experience.

Conclusion

The project Will have is fully open to all industry stakeholders who want to improve the processes of buying, owning, reselling, etc. Large and small brands, technical partners, supply chain and sales experts, industry and government organizations, trade associations and partners in building financial, technology and infrastructure ecosystems can all join. the consortium.