The growing problem of factories around the world bypassing auditing or not following ethical production standards: Pierre-Nicolas Hurstel is at the forefront of digital passports
Issuing physical certificates of authenticity has been the standard practice for luxury goods, however these can easily get lost or damaged. Some companies have moved their records online and keep databases of their products along with customer details. They would still be left vulnerable to hacking – blockchain avoids this by making sure that authentication and accountability are the priority. Blockchain technology has been hailed as a solution for tackling the ever-confusing rabbit hole of fashion production and life cycle tracking. The business of counterfeit goods has become a serious issue for luxury brands that rely on their authenticity and dedication to quality to attract discerning customers. As social media has made these brands all the more desirable, so too did the counterfeit market ramp up its production to deliver luxury good lookalikes at a steep discount. According to the 2018 Global Brand Counterfeiting Report, luxury brands lost $30.3 billion worth of sales to counterfeits online alone.
Arianee has used blockchain, a way of failsafe tracking through distributed ledgers to help tackle the issue by giving brands the option of creating a ‘digital passport’ that tracks the lifecycle of their item from material all the way through to the customer, even after resale. To use the Arianee technology, brands apply to become a member and have the option of using software to create a tailored solution or can develop on the open source. Pierre-Nicolas Hurstel, CEO of Arianee describes it as the foundation of the company. «We come from an open-source vision and we’ve created an open-source technology within a non-profit consortium. For a while, we thought that this would be enough to kickstart the project and that brands and integrators and developers would just embrace that and build on the open source. We found that in 2020, that was not enough. So, we built a software as a service for for-profit business. On top of this, we’ve developed and edited software that brands can now use to use our technology at scale. The moment we did that, we saw a huge increase in traction from the brands. We’ve been able through 2020 to sign major contracts at scale that are going to be announced in the next couple of weeks» Costs are varied – Arianee offers packages for small brands with the price of an individual certificate standing at 10 cents (USD), while customer messages are 15 cents. For small businesses worried about other companies appropriating their designs, blockchain digital passports offer a way of legitimizing their unique identity.
The software also comes with benefits – tracking a products lifecycle is one way to make sure that companies are building up good practices and expanding on them. The growing problem of factories around the world bypassing auditing or not following ethical production standards shows that technologies like digital passports accompanying the physical product could help in good company practices becoming the key point of concern for consumers who prioritize sustainability. Hurstel came onto the program after his friend Frederick Montagnon started working on blockchain. He had previously worked on sustainability event REMODE in LA, focusing on innovation and disruption in the fashion field. «During my whole career, I have always worked for luxury and fashion companies in different capacities – as a consultant, then as a B2B event producer. One of the last events that I was producing was a major conference in Los Angeles, focused on how innovation can transform the fashion and luxury industries into growing companies and industries. Trying to address the issues of performance, growth and sustainability through innovation for fashion and luxury. I jumped onto the Arianne project and brought my experience and vision about circularity and the new challenges facing the fashion and luxury businesses». Technology, sustainability and fashion have had a long journey coming to the point of collaborating together.
Luxury purchases are frequently now seen as investments with increasing and depreciating value over time, making authenticity a key benchmark for assessing that value, especially for Gen Z consumers who would easily access apps to validate their purchases and prove their value. «Once you receive the garment or valuable object that comes with a digital passport, the digital passport is transferred to you from the brand, so you receive it in many different ways as there are many options in terms of interface. The brand can decide to send it to you in a brand app or on a generic wallet or on a web app or on your account on the brand’s website. All of these options are ones that brands are still exploring, which is going to be the best and each brand is working on a different scenario. I’d say that the first thing to do is to make sure that all of the first owners get their digital passport and they know where to find it». Arianee works with luxury watchmakers like Breitling and Vacheron Constantin as well as Audemars Piguet, MB&F, Roger Dubuis and Manufacture Royale who have built up records of their timepieces and for whom the shift the blockchain is focused on the change to technology, rather than the problematic aspect of tracing their supply chain. Both LVMH and Kering are working on blockchain technology to track their luxury goods, but are both focusing primarily on luxury watches, whereas Arianee is also aiming to work with fashion brands and digital fashion goods. «Digital imagery and digital design is getting everywhere. The fact that for each garment, there is now a digital version of it that has been produced along the way, or that has helped in producing it opens an opportunity to enhance the customer experience through augmented reality. Virtual reality also creates the possibility for this digital version of the government to have a life of its own».
Hurstel has said that working with resale sites is a way that Arianee can approach that market which has grown in recent years. «We would love all these platforms to just build on the open-source protocol and create the bridges they need. We have got to ignite that, so we’re discussing it with players and trying to show them how they can benefit from the technology and try to explain to brands how they can benefit from this kind of partnership». Resale is part of the circular economy. Hurstel wants the products tracked using Arianee blockchain technology to also have the option of being linked to repair services that would extend the lifecycle of the product. «The circular economy for valuable goods is embedded within the product. A Hermes bag is going to go from generations to generations. Even if it was not organized as a business, you don’t throw away a valuable piece of luxury, you don’t throw it out for it to end up in landfill. As much as there is a challenge for fast fashion to avoid having garments thrown out and not recycled, this is not the major issue for luxury. It’s not an issue, but it’s an opportunity to organize this for the brands so they can also get back to the center of this emerging, growing economy. The circular economy is more of a business opportunity than an environmental challenge for luxury brands. When you buy a $50,000 Vacheron Constantin watch, it’s never going to go to the trash. That is one side, but then we work also with affordable luxury and brands that are not in the luxury sector. There is an opportunity to increase the life-span of the garments, to make sure that it’s going to have a second or a third of life, to make that easy and to offer options for smart recycling for when the residual value of the garment gets to a point where recovers is not an option anymore».IMAGE GALLERY
The Arianee project is an independent, participative – organization whose mission is to build a global standard for the digital certification of valuable objects by promoting and supporting the adoption of the Arianee protocol.