Luxury brands looking to combat counterfeits have a new tool for authentication and certification — the blockchain.
The technology relies on a decentralized data structure that works like a ledger, one that experts consider practically unhackable and highly trustworthy. Tech companies like IBM have been deeply interested in blockchain and see the benefits for high-end retailers, so much so that it helped create Trustchain for the diamond industry. Now tech firm Arianee aims to do something similar for luxury brands of all stripes.
Where Trustchain and other blockchain solutions step in to track and verify details on the backend, Arianee focuses more on what happens once the products reach the shelves.
“Most of the projects we see are dedicated to supply chain,” said Frédéric Montagnon, chairman of the board at Arianee. “I think it’s important to know where the products are coming from, but at the end of the day, we [believe] this is something that the brands need to do by themselves…We’re more focused on what happens after a product is sold on the market.”
Arianee’s use of the high-tech ledger is to hold product information and authentication documents so that consumers need not rely on such fleeting materials as printed certificates. And because the information is decentralized — in other words, the data is stored across Arianee’s network with only the owner holding the access key — those verifications can’t be lost or forged.
With Arianee’s approach, companies not only have a way to prove the authenticity of that designer bag or high-end timepiece, but can also give their clientele the peace of mind that those verifications can’t be faked, misplaced or stolen.
For Montagnon — an engineer, 20-year media ad tech veteran and investor in early stage technologies who has sold companies for a total of $400 million — this approach is “very rare.” Others seem to think so as well: The company has no fewer than three pilot programs in the works with luxury brands.
One of them is Swiss luxury goods company Richemont, which will begin tests for its premium watch brand Vacheron Constantin. This pilot, as Arianee’s first, will go live before the end of the year.
“Luxury watches are probably the most relevant use case, because we are talking about products that have a serial number attached to it,” Montagnon added. “There is no way you can put [in] direct RFID or any kind of technology to identify the product. So the only way is to attach to a style number that is written onto the frame of the watch and attach it to the blockchain. So it’s where I think the value is the most obvious.”
The product is one facet of the system. The other is the network of trusted participants, i.e. the “chain” in blockchain.
Arianee’s vision for this technology is not to give one company a leg up over another, but rather, to form a standard of sorts. The concept is to join forces to address the common issue of authentication — and the common battle against illegal counterfeits. Fakes have been a massive problem for the luxury market for many years, and in 2017, their value amounted to $1.2 trillion, according to Research and Markets.
The question is, can luxury goods companies put rivalries aside for a common goal? Montagnon thinks they can. Or rather, he believes they must, and he’s betting that Arianee can be the linchpin.
“As the market is really fragmented with many, many different manufacturers, [Arianee] is even more valuable,” he said. “Because all of these brands don’t have, actually, the ability to develop [such solutions] internally. Having a common platform is the way to go.”