A growing number of players in the luxury industry like Vacheron Constantin, LVMH and Farfetch are embracing blockchain technology, marking a significant shift in the market towards the use of new technologies that could have far-reaching implications.
How blockchain marketing is changing the luxury game
As blockchain technology evolves, the internet of things (IoT) is playing a significant role in the use of digital data and the internet of value. Blockchain is “designed to track transactions and put every party on equal footing, allowing each individual to transact freely,” according to Roger Murphy, chief technology officer of blockchain-based software company ObjectTech. “Banks and other financial institutions [are] trying to use blockchain and blockchain-enabled ecosystems to implement real-world applications.” This could be good news for luxury brands that need to stay at the top of their game. Leading companies like LVMH, for example, are increasingly using blockchain for inventory and distribution as well as for authentication purposes.
Blockchain technology as a marketing tool
Blockchain as a concept is not new; some trace its roots back to the early 2000s. This technological platform can record transactions in a transparent and unchangeable manner, creating an immutable and permanent database of data. An open ledger, the shared ledger is usually distributed, can be monitored by a large number of users and its conditions are not controlled by any central authority. Blockchain was first introduced into the luxury industry in 2017 when fashion and art collectible firm Bulgari partnered with the software company Consensys on a number of projects. Bulgari realized that the process of releasing and managing a new collection could be streamlined using a blockchain, resulting in a more seamless collaboration between designers, marketing and production teams.
Blockchain technology and luxury goods
Initially imagined as the backbone of bitcoin and other cryptocurrencies, blockchain technology is essentially a decentralized public ledger of transactions. It uses a peer-to-peer distributed database that creates trust in the network through its use of cryptography. Blockchain technology offers numerous benefits to consumers and brands who want to build trust with their customers by creating an unchangeable record of every transaction. This kind of technology could prove instrumental in the future of luxury services such as personalization, which are being enhanced by smart contracts. Some organizations are using blockchain technology to improve their luxury brands in the following ways: 1.
How blockchain marketing is changing the luxury game
Artificial intelligence is the buzz word in marketing now and many luxury brands are already starting to experiment with it. Last year, the Swiss luxury watch brand, Vacheron Constantin collaborated with IBM and H&M to launch its first-ever luxury smartwatch that can send instructions to a smartphone from a remote server. In its most recent endeavor, a new chain of ‘store of the future’ stores will utilize blockchain technology for its buying and selling process, significantly cutting down on buying and selling time.
Conclusion
By now, consumers are acutely aware of how the proliferation of fake goods and pirated content has increasingly diluted the effectiveness of traditional marketing and advertising methods. This is perhaps not too surprising as information online today is more easily accessible than ever before. With the overwhelming amount of relevant content and products available, it becomes all the more important for luxury brands to find new ways to engage and entice consumers. Brands such as Vuitton, Louis Vuitton and Bally have been at the forefront of technological innovation for many years and many others are following suite. This leads to exciting times for all of us. “> The past decade has seen a number of interesting shifts in the market.
