lockchain and Web3 are hot topics in the luxury sector. The momentum and progress in this space has been driven by the acceleration of digital initiatives during the pandemic. At a pan-industry level, several key players have emerged with blockchain solutions to effect change.
One of them is Aura Blockchain Consortium, a luxury consortium which was initiated by LVMH in 2019, joined by Richemont-owned Cartier, Prada Group, Mercedes-Benz, and OTB Group. Fundamentally, Aura focuses on “certification”. But what does this mean in practical terms? Europa Star talked with Daniela Ott, General Secretary of Aura Blockchain Consortium, to try and decode the jargon, find out what problems they are tackling and determine where they bring benefits along the value chain.
To understand why platforms such as Aura Blockchain Consortium pursue their missions on a cross-industry scale, we need to begin with the basic idea of what Web3 is.
When the World Wide Web was invented in 1989 by Oxford graduate Tim Berners-Lee at CERN in Geneva, it gave us a ‘read-only’ internet. Around 2004, what became known as Web 1.0 evolved into a ‘read-write’ web, which gave users the ability to generate their own content. Web 2.0 not only gave rise to social media but also allowed platforms and companies to collect and own the data supplied by users. Blockchain technologies will enable the next generation of the internet - Web 3.0 or Web3 - to be ‘read-write-own’, allowing users to control ownership of data.
According to leading blockchain platform, Ethereum, “Web3 has become a catch-all term for the vision of a new and better internet. At its core, Web3 uses blockchains, cryptocurrencies, and NFTs to give power back to the users in the form of ownership.”
It is this promise of decentralization, ownership, and traceability that is driving the digital players to find a utility fit and envision a utopian future for the luxury sector spanning industries including watches.
Aura Blockchain Consortium operates a ‘closed permissioned’ blockchain for those signed-up to its network. Only members have permission to access or validate the blockchain. Aura Blockchain Consortium’s goal is to offer a single global standard for traceability in the luxury sector while at the same time protecting data privacy. “We are non-profit. It is an entirely different set-up from the outset,” says Daniela Ott, General Secretary of Aura Blockchain Consortium.
According to the Consortium, there are currently almost 30 brands on its platform, with over 17 million product-NFTs minted. Aura works with technology firm ConsenSys to build its proprietary protocol for an Ethereum-based enterprise blockchain platform (Quorum, the brainchild of JPMorgan Chase) hosted by Microsoft.
In essence, Aura Consortium’s blockchain uses NFTs as certification for luxury goods as proof of provenance. It covers the entire lifecycle of sourcing, production, and consumption. The platform thus offers both upstream and downstream traceability in the direct-to-consumer supply chain.
“We’re providing an anchor for luxury brands of any size, for most product categories - watches, jewellery, fashion, accessories, wine and spirits, etc. - to enter a secure and private blockchain in three ways: NFTs, a SaaS solution, and a white-label service,” says Ott.
“We’re providing an anchor for luxury brands of any size, for most product categories, to enter a secure and private blockchain in three ways: NFTs, a SaaS solution, and a white-label service.”
Aura Blockchain Consortium’s platform has been developed to work with members’ own track-and-trace, ERP, and CRM systems, for brands who have preceding data infrastructures. In addition, Aura Blockchain Consortium has launched a SaaS solution for members without technical or blockchain expertise to build on its Cloud infrastructure, where data between brands is segregated to ensure complete privacy.
“Brands all want to do things differently and some may use NFC or QR code, and some may use AI imaging recognition to capture data. We can work with their set-ups. It’s about customers at the centre, providing a standard industry solution for an easier and more fluid customer experience. We can also recommend third-party solutions that are compatible with Aura Blockchain Consortium,” says Ott. As such, Aura offers the possibility to mint NFTs on other widely used public blockchains, such as Palm, Polygon, or Ethereum mainnet.
One of the first movers in this space is Hublot, which has been certifying all its watches with e-warranty backed by the Aura Consortium’s blockchain since 2020. The LVMH-owned watch brand worked with a technology partner to develop a warranty system that captures and authenticates a watch by visual recognition, much like AI facial recognition. The technology uses a phone camera to recognise every product’s unique micro-structure of components and materials.
The data for the e-warranty is stored as NFTs on Aura Consortium’s blockchain. Customers can then verify the origin of the watch and access services with a Hublot mobile app. Chief Executive Ricardo Guadalupe wrote in an email: “There has been a clear shift towards Web3 and interest in decentralisation and blockchain. (...) The luxury market and Web3 can work hand in hand.”
“Brands all want to do things differently and some may use NFC or QR code, and some may use AI imaging recognition to capture data. We can work with their set-ups.”