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Blockchain, Featured, Technology

How Are Luxury Brands Using Blockchain Innovations For Generating Revenues And Marketing Sustainability?

Luxury products with a glamorous look and a status-boosting brand name are not enough to attract the new generation. Customers are looking for ethical and environmentally sustainable practices as an essential element in choosing a brand. As such, top brands like Gucci, Prada, McLaren, Luis Vuitton, Bvlgari, Givenchy, and others are using blockchain not only to assure ethical provenance and traceability but also as a marketing tool, guaranteeing the authenticity of the products to the high-end consumer.

Also Read: Blockchain Is Revolutionizing The Government Processes Around The Globe

Blockchain Marketing in Fashion

43% of generation Z customers give more importance to brands with sustainable practices. The fashion industry is the focal area where customers look for such trends, and luxury brands are trying to build more brand value by using blockchain management. Let us look forward to some of the ways luxury brands are using blockchain. 

  • Digital Tracking

One of the advantages of using blockchain is that the company can digitize and automate its value chain. Thus, a brand can track, track, verify, and even prove that its luxury product is environmentally sustainable. Pretending to be sustainable while you are not would lead to even more backlash. 18% of the consumers expect the public bodies to check these green claims, and 14% of the customers hope some private organization to take over these verifications. Instead, using blockchain marketing, it is easier for the brands to showcase that their products align with these values.

Blockchain can help brands to improve transparency. They can show the entire history of product manufacturing, starting from buying raw materials. Thus, the brands can showcase that they use ethical sourcing, greener methods, and environmentally-sustainable products during their entire value chain.

Also Read: Lessons Investors Should Learn From FTX Crypto Exchange Collapse

  • Digital Passport – Marketing Transparency Using Blockchain

Brands are using blockchain marketing to create digital product passports. Customers can check these trackable certificates via their mobile devices to learn about the brand’s history and all data records. Customers can use this passport and back-track the entire lifecycle from creation to sale.

Beyond transparency, this method also gives customers a personalized online experience. The new generation of customers would take time to learn the integrity and authenticity of the brands before buying them, and transparency would increase brand value.

So, one luxury branded handbag can have a digital passport showcasing how each raw material was obtained from local producers and the location where it was produced with fair practices, stored, and how it was delivered. It can even create a story of how an artisan learned the skill for his ancestor or how the crafting method is indigenous to a native community. It helps create a digital identity for each product, differentiating between brands. It is easier to create a reputation based on native crafts, the quality of raw materials, the origin of the culture, and more.

  • Combating Counterfeiting

Luxury brands are relatively costlier, and obviously, there would be a lot of counterfeit products for the customers who wish to own the products but do not want to burn through their college funds. Counterfeit products also make customers question the product quality they are about to buy. Thus, luxury brands are using blockchain technology to create confidence that the product is genuine. Each product will come with registered ownership on a private blockchain. Each transaction would be securely recorded for the customers to review. If a customer can see the entire history of a garment or accessory, they can quickly verify its authenticity.

  • Blockchain Against Unethical Trading

Luxury brands have, for a long time, valued their secrecy. However, this would not fly with today’s customers. For instance, 80% of products in the gemstone market come from small-scale miners where working conditions are pretty grey. Moreover, there are also artificial/synthetic gems that can destroy the value of the product. It is crucial to prove that the specific product does not come from such sources, or there would be immediate backlashes. 

Another advantage of blockchain marketing is using the technology to prove the store’s birthplace, crafting reports, clarity, carat, and more. Since no middleman can alter the information on the chain, it increases transparency and reputation. So, a customer can be sure that the product they own comes from places where there is fair working condition and are crafted by genuine artisans.

  • Avoiding Shrapnel From Industry Backlash

When a brand involves a lot of geographical locations for its value chain, there will be a complex and untraceable mess of a supply chain. Thus, a brand, although not directly involved, would get a load of shrapnel when an associated industry gets backlashed. For instance, let’s take a restaurant using French wine. When a report about some French vineyards using illegal practices surfaces on social media, every restaurant using French wine can feel the backlash, even if it is not from that vineyard.

Blockchain marketing allows increased traceability and transparency. Thus, customers can learn about the origin, attributes, crafting history, and more for each bottle of wine. You can easily create a personalized customer experience and reduce buyers’ decision-making friction.

  • Metaverse Applications

Luxury brands are starting metaverse partnerships with blockchain companies to improve customer experience and luxury-level exclusivity. Brands can showcase their community involvement, support projects, improve transparency, and more. Moreover, brands can also create a metaverse-styled treasure hunt to increase brand awareness. It is also possible to use the technology to award customers for positive word of mouth on social media pages.

Wrapping Up

FOMO (Fear of Missing Out) is a significant element when it comes to fashion products. Thus, customers are more likely to get on board with the new trend of ethical buying. Brands need to get hold of blockchain marketing before their competitors do. Brands look forward to collaborating with blockchain companies to help create solutions for authentication products, increasing transparency, building a digital passport for products, and so on.

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