Technology has replaced fashion as the ultimate change driver for mass consumption, it has brought about society’s most important cultural shifts since the last century. Today we share the new buzz technologies inside the new luxury industry.

During the last decade, the luxury industry has undergone substantial and profound changes that have modified its international dynamics, and how the industry relates to its clientele. 

Technology has been a revolutionary dynamo of continuous action, forcing all companies in the sector to integrate it into the core of business operations, and not just as a peripheral issue related only to digital and external communication. 

With the unprecedented development of the Internet in the last decade and the support of large technology companies, the luxury business has uplifted its position as a global player, beyond the small atelier era of novelty and scarcity goods by which it used to be identified. 

Pioneer technological advances at the service of luxury companies mean a commodification of luxury itself, since technology and forefront innovations are linked to exclusivity. Full access and benefit of that type of technology is limited, and technology allows for  the one-of-a-kind experiences in physical and virtual worlds. 

New trends in luxury are ahead of us, from the use of cryptocurrencies to pay for goods and services (which are in demand), the implementation of blockchain in companies, and the frequent use of artificial intelligence to understand customer needs and to predict their future tastes. 

The new luxury-tech paradigm is fast developing,to get ahead you will need to know the rules of the new game. 

Aura: The Blockchain of Luxury

The venture defines itself as “a blockchain-integrated solutions provider for global luxury brands”. Aura’s purpose is to enhance the luxury customer experience and to address common issues within the luxury businesses such as relationships with partners, traceability, and transparency.

The tech platform is operated by The Aura Blockchain Consortium, the first initiative led by luxury houses to become a technological hub for brands, a collaborative vision within luxury competitors for higher goals and future global challenges. 

In an unprecedented joint venture cooperation, LVMH group, Prada group, and Cartier, part of Richemont group, have shared the governance of the blockchain system in a universal project intended for the entire sector, and open to all market players. 

The main benefits for customers are to access product history, the proof of authenticity of luxury goods (bags, diamonds, clothing), and complete traceability from sourcing to sales. Several Aura’s benefits for luxury players include a detailed and controlled selling process for the second-hand markets, protection against counterfeiting, and reassurance that  products are made and handled according to the standards set out by brands.

The technological system, a multi-nodal private blockchain, is secured by ConsenSys technology and Microsoft, it will record information in a secure and non-reproducible manner, and generate a unique certificate for its owner. In June, Daniela Ott was appointed General Secretary to advance the Consortium’s mission to enhance luxury customer experience through authentication, traceability, sustainability, and personalized service. 

AI, ML and Cloud-Based Innovations

To fulfill a fuller personalization experience, LVMH and Google Cloud have announced a strategic partnership to accelerate innovation and to develop a new cloud-based artificial intelligence (AI) technology.

The main target of the collaboration will be every human talent working inside LVMH’s Maisons (the company’s luxury brands). This goal will be achieved by  providing new AI and machine learning (ML) technologies to improve business operations and enhance demand forecasting and inventory optimization. The intended result is  to elevate customer experiences through personalization that foster long-term growth.

The partnership will focus on the technological capabilities of AI touching every part of the value chain at the company, from product development to the interfaces with employees, partners, and customers, enabling the development of new business use cases at a large scale.  

In addition, both companies will explore co-innovation opportunities and launch a Data and AI Academy in Paris to accelerate their expertise and innovation in these fields.

The impact of the technological and digital transformation inside the luxury business has shaped a new market race in which collaboration, and a faster reaction to the consumer’s behavior changes are two main concerns for future developments inside the luxury industry.