How blockchain is revolutionising the way luxury brands do business
Luxury brands are turning to cutting-edge tech to ensure their customers are getting true authenticity, so where does blockchain fit in?
Luxury can be an abstract concept. Marc Jacobs categorised it as “anything you don’t need”, while Coco Chanel held it to be “the opposite of vulgarity”.
Perhaps ruling these definitions too nebulous to take to the bank, brands have tried – with some success – to conflate the concept of luxury with that of exclusivity: consider the caché attached to a limited-edition Birkin bag, or a Patek Philippe tourbillon. But no matter the rarity of the product, 21st century mass production techniques and globalisation threaten to make even the exclusive commonplace.
How are brands to maintain that luxury allure when it has never been easier to get your hands on that which was once unattainable?
To recapture the magic, marques from Louis Vuitton to Cartier, and De Beers to Porsche, are investing heavily in technology that they are hoping will take them beyond simply producing products. And right now, the buzz is all about blockchain.
Just a few years ago, the term “blockchain” was restricted mainly to tech circles – usually in relation to bitcoin, the “cryptocurrency” that was built upon it, and which proponents say could mean the end of money as we know it.
Cryptocurrencies have not gone away, but in the luxury market the hype has moved on to the system that underpins them – because it turns out that blockchain can be used for much more than transactions.
“For example, it will guarantee to an owner that a product has indeed been manufactured by the brand and that it is not fake,” says Pierre-Nicolas Hurstel, CEO of Paris-based tech firm Arianee, which has developed an open-source, blockchain-based system on which Swiss luxury corporation Richemont was the first user. Richemont owns brands including Cartier, Van Cleef & Arpels and Vacheron Constantin.
“Say, for example, I send you a picture using email. I keep the picture, and you get a copy of the picture,” Hurstel says. “Blockchain is not like that: it allows you to create a completely unique digital object: it cannot be copied; it cannot be changed.”