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Luxury fashion brands are known for cut-throat competition. Can looming legislation around digital product passports get them to collaborate?
The Aura Blockchain Consortium’s future depends on it. More than 40 brands, including Dior, Prada, Tod’s, Maison Margiela, Marni, Miu Miu, Bulgari and Cartier, are working together through the Geneva-based non-profit to adopt a standardised framework for digital identities for luxury goods, driven by the urgent reality that tech and sustainability initiatives require consensus to scale.
Since its founding three years ago, Aura says it has recorded at least 40 million luxury goods on its private blockchain, helping brands authenticate and trace physical products through digital identities. It now employs a total of 40 people, and counts senior execs from major brands on its board, including LVMH CIO Franck Le Moal and Cartier international innovation director Angela Au-Yeung, among others from OTB Group, Prada Group, Van Cleef Arpels and Make Up For Ever. Its technology has powered projects like OTB Group’s NFC chips, Loro Piana’s QR codes and Prada’s ‘Timecapsule’ NFT drops.
These initiatives, largely experimental, are the foreground to more urgent technological overhaul. In 2022 — a year after the Consortium was formed — European legislators announced the Ecodesign for Sustainable Products Regulation (ESPR), which will require all fashion products sold in the EU to have digital product passports (DPPs). It isn’t necessary that the information is stored on a blockchain, though it can offer an additional layer of security. While the European Union hasn’t formally announced what specifically will be required on the DPPs, Aura is “very close to” the EU, says Aura Blockchain Consortium CEO and general secretary Romain Carrere, and serves as a conduit between luxury brands and the trade bloc, both sharing information with brands on what is likely to be included, and advising the EU on the types of information that can be standardised and possible to implement.
There are other companies angling to be the DPP of choice for fashion, including Arianee (used by Breitling, Lacoste and Moncler) and Eon (which is not blockchain-based, and could be linked with other blockchain-based solutions). Aura is gunning after grouping luxury brands together: its founding members include LVMH, Prada Group and Richemont-owned Cartier, with OTB Group joining soon after. Daniela Ott, who previously served as a Kering exec, was Aura’s founding general secretary; Carrere took over the role last year.
Aura’s original pitch was to develop a blockchain platform to verify the authenticity and provenance of luxury goods, with all participating brands contributing to the blockchain governance and strategy. “We were talking about every point together, such as, ‘What is the appropriate legal entity? What are the governing principles?’,” Timothy Iwata Durie, Cartier’s global innovation director, told Vogue Business at the time. This was before the NFT craze and before the EU’s DPP regulation. Now, on the other side of those developments, the Aura Blockchain Consortium is well placed to offer a more practical value of the Web3 technology; naturally, more flashy NFT perks can be eventually layered onto any resulting DPP efforts.
When it comes to technology and sustainability efforts, brands must override the impetus to isolate, says Lorenzo Bertelli, who is head of marketing and corporate social responsibility for Prada Group and the chairperson of the Aura Blockchain Consortium. “At the heart of the whole idea of the consortium and blockchain technology is the idea of sharing knowledge, opportunities and crossing boundaries or barriers, which otherwise, with traditional systems, would be shouldered by each brand alone,” Bertelli says. “The development of Aura Blockchain Consortium will never eliminate the competition between brands, but on the technology front — particularly when it comes to the capabilities of blockchain technology in the luxury sector — joining forces is the best way to harness creative energies.”
“It’s not something that’s common in our sector,” says Marni CEO Stefano Rosso, who is on the board for the Aura Blockchain Consortium. Marni parent company OTB Group just announced plans to provide authenticity certificates through NFC chips for all products from Jil Sander, Maison Margiela and Marni brands going forward, totalling more than 1.5 million products a year. “Everybody tends to compete with each other — in a very discreet and nice and moderate way, but in the end, it’s competition. But the fact that we come together and work together on solutions and options to utilise a technology that can elevate our sector? It’s huge. We see how our problems are common and we try to find solutions, and you have very interesting minds and intelligent people that you share information and solutions with.”
Challenges ahead
To join Aura, brands must be approved by the board and then pay licensing fees and a transaction fee per product; in return, they can use Aura’s private blockchain, a public blockchain or a multi-blockchain approach. They also have access to Aura’s education and standards, and can contribute input to further developments.
Brands still face numerous challenges in adopting digital product IDs — and there’s power in numbers as deadlines approach. This month, the ESPR is expected to be published in the EU’s official journal, according to Aura, with the implementation period starting as early as 2026. Then, brands will have 18 months to comply. Fashion, textiles and footwear are expected to be considered priority product categories. The DPP will need to provide product-specific information related to sustainability, circularity and legal compliance — such as technical performance, environmental-sustainability performance, durability and repairability — and product-related information.
DPPs require brands to collect all details on suppliers involved in the making of each product, and to navigate the logistics of physically attaching the identity to the product — a time-consuming task that can reveal opacity in supply chains. Then, there’s the education process, both for store associates and customers. The journey is challenging because it “structurally impacts core business processes, information systems and many of our internal and external stakeholders, particularly our production chains”, says Tod’s general brand manager Carlo Alberto Beretta. After the early success of its DPP pilot with the custom Di bag, Tod’s plans to expand the tech to other products, such as the custom Gommino style.
In other words, the process is “not simple”, Rosso concedes, and he is somewhat concerned at the lack of urgency that he observes among the wider industry. “It took us two years to go from a few items to the entire population of our products.”
Web3 isn’t dead
Those who have onboarded the tech can add features over time — the adopting brand can update the information that pops up every time an owner scans one of its NFC chips or QR codes. So while the DPP might provide a deadline, the uses are open-ended. This could include discounts, promotions or styling suggestions; invitations to events; digital wearables; repair records; or the option to transfer ownership — and distribute revenue — on the secondhand market. Once ownership is transferred, brands can continue to engage with the new owner — assuming that they are incentivised to continue scanning.
Carrere recommends testing uses with small pilots to gauge how customers respond and to encourage engagement. This can be a key way for competitors to differentiate, he adds. While Aura is creating a standard framework for a traceability token, the plan is not for branded DPPs to look the same. “We are making a luxury standard, but all the luxury brands are doing something different from the others because of the storytelling, because of the design, because of the features that you can add, depending on your strategy,” he says.
Bertelli is convinced of the usefulness of this technology beyond the DPP. “I believe we will see the results: as an additional lever for the storytelling of our products, as an amazing conversation starter for the sales assistants in our boutiques, and to strengthen the dialogue with customers in the field of sustainability.” Bertelli adds that transparency across product information is particularly appealing to younger customers, with millennials and Gen Z remaining core customers of Prada Group’s brands in terms of “digital touchpoints”.
Rosso says that, while the DPP is the core focus for now, OTB Group is interested in a range of future uses, ranging from resale to NFTs. Already, it has sold a Margiela Tabi shoe connected to a digital twin. “Tokenisation will be the future for anything we do, because it gives a certain level of guarantee that you didn’t have before,” he says. “Once you get a certificate of ownership, it could become a great tool for CRM3.0 and secondhand, which for me is very interesting. I think it will become more and more normal for customers to use it with time when we add more options linked to the NFC chip.” Already, the new tech has seen especially high engagement among customers in South Korea and Japan, he adds.
It’s worth noting that a product’s Aura-provided digital ID can also be linked to a public-facing NFT provided through other blockchains on Ethereum or Polygon. While brands have shied away from shilling NFTs recently, Carrere is convinced that future Web3 utilities still hold water. “I am a Web3 believer,” he says.
Going forward, Carrere is looking forward to announcing new members who have not yet made their uses public, and hoping to continue education on the brand side, particularly for retail staff. He also anticipates that brands that have already implemented the tech will now start diversifying their utilities. “I have some good ideas on how we can make it a recurring thing; that is the next step… There are many things that we’re working on with many brands that are different than the others — but I wouldn’t want to spoil that.”
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