While cryptocurrencies are currently being battered on the market, the tech upon which they are based is finding new uses in the luxury brand segment. Players in this space have turned to blockchain as a way to fight back against counterfeiting, which costs different luxury brands billions in lost revenue as well as legal costs.
The losses suffered by luxury brands are astronomical. For example, in 2017 alone, these brands reported a total of $98 billion in lost sales. The cost of counterfeits isn’t just restricted to the monetary aspect — even the reputation of the brand suffers when a customer who thought they had bought the genuine item is disappointed by not receiving value from the product.
To counter this threat to sales and reputation, luxury brands are banding together and creating blockchain systems on which they create digital twins of each product that they make so that customers can verify that what they are about to purchase is an authentic product that will address their needs as expected. An example of luxury brands teaming up in this way is the conglomerate LVMH, which teamed up with Cartier and Prada in 2021. They jointly created the ABC (Aura Blockchain Consortium) in order to make “digital twins” of each designer item that these brands made.
The blockchain ledger stores product records that can’t be altered or tampered with in any way. This allows buyers to check product authenticity any time they wish, and it reduces the likelihood that look-alikes will dent the market for the luxury product maker. At the moment, more than 17 million different products made by the 20 brands deploying the Aura software have been entered onto the blockchain.
It is interesting to note that all those brands on the platform compete with each other on the market, but because of the common threat posed by counterfeiters, these companies have elected to work together to deal with this problem and then compete for sales.
The digital versions or twins of the products can be accessed through a webpage or app by customers, and these records are, to all intents and purposes, a trustworthy certificate that authenticates the product.
The membership of the consortium is growing day by day, and other industries are beginning to take notice. For example, luxury carmaker Mercedes-Benz also joined Aura.
The data captured by platforms such as Aura will be extremely useful in the used products’ market since players are obliged to authenticate the used luxury products that they source before putting them on the market. The blockchain trail helps in this exercise.
In short, while cryptocurrencies are currently going through a rough patch, blockchain technology is alive and well. Entities such as GreenBox POS (NASDAQ: GBOX) will keep pushing the envelope of their usefulness until this technology penetrates every aspect of human endeavor.
NOTE TO INVESTORS: The latest news and updates relating to GreenBox POS (NASDAQ: GBOX) are available in the company’s newsroom at http://ibn.fm/GBOX
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