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Blockchain in Luxury Retail: A Pathway to Transparency, Sustainability and Customer Engagement

The luxury retail industry has always been synonymous with exclusivity, craftsmanship, and exceptional quality. Ten years ago, consumers were concerned about where the finished product was created, but there was little knowledge of and interest in the origins of upstream components. Today's narrative is demanding and unique, the new-age consumers of fashion are more conscious and seek assurances of moral behaviour along with showy consumption. The socially conscious, tech-savvy consumer needs provenance information at each stage of the production chain.

Blockchain is a revolutionary technology today and holds great potential in supply chain management. It can improve transparency in the traceability of products in the supply chain. By utilising blockchain, businesses can track the path of their products from the start of manufacture to the finished product, improving accountability, and efficiency, and lowering the likelihood of mistakes or fraud.

The need for traceability has become more and more critical in the Luxury Retail Industry due to rise in counterfeit issues. A majority of brands around the globe are already being affected by it. Companies are spending enormous amounts of money, tracing their products to prevent counterfeiting and find sustainable ways to improve them.

An example of how counterfeiting can impact luxury brands is demonstrated by Gucci's statement in 2020, where it announced the seizure of over 4.1 million counterfeit goods valued at around 157 million euros. This highlights the scale of counterfeiting operations and the financial losses that luxury brands can incur due to fraudulent products.

The fight against counterfeiting is a never-ending struggle that highlights the value of authenticity and traceability in the supply chain,  which can be improved through blockchain technology.

The top 200 most notable fashion brands and shops have an average transparency score of only 21%. For nearly two out of every three (62%) consumers worldwide, brand trust is at the top of the list of sustainability considerations influencing purchasing. Increased consumer trust scores as a result of supply chain transparency improve customer satisfaction and strengthen brand recognition. A higher customer trust score translates to more loyal customers and higher lifetime value. In 2020, LVMH was accused of purchasing crocodile skins from an animal abuse farm. This sparked concerns regarding the brand's supply chain practices as well as the ethics of the materials used. Due to the lack of traceability in its supply chain, the company was unable to defend itself against these charges, causing damage to its reputation.

Fashion traceability is still in its development, especially outside of tier 1 suppliers. Only 12% of the 250 largest fashion brands and retailers in the world identify specific raw material suppliers, compared to 50% of tier 1 suppliers and 30% of tier 2 suppliers. Customers in this new market have different and evolving expectations when it comes to sustainability and a better customer experience. Some of the top luxury brands have already reacted to meet these expectations.

  1. In the luxury watch industry, Rolex has investigated the use of blockchain to authenticate its watches.
  2. Cartier, a luxury jewellery brand, has created a blockchain-based network to certify the authenticity of its gems.
  3. Louis Vuitton is using blockchain technology to track the authenticity of luxury items where Customers can get information on the product's whole lifecycle, including the origin of raw ingredients and the manufacturing process.
  4. Prada is using blockchain to verify the origin and authenticity of its leather.

By leveraging blockchain, these luxury brands are enhancing their customers' experience, trust and loyalty, and are able to maintain their reputation for quality, exclusivity and promote greater sustainability and responsibility in their operations.

Trag is a blockchain-based platform provided by Vlinder Labs that enables supply chain transparency, traceability, and authentication for goods. In order to guarantee clean production, provenance, and fair trade practises, it aids businesses in tracking the path of their products from the point of origin to the final consumer. By ensuring authenticity for all significant participants in the value chain, Trag also improves consumer experience, brand trust, and revenue leakage. To learn about Vlinder’s Trag platform contact at:

Trag - Blockchain-enabled Authenticity & Provenance Platform
Blockchain-enabled Authenticity & Provenance Platform


  1. https://www.cnbc.com/2021/04/27/gucci-and-facebook-file-joint-lawsuit-against-alleged-counterfeiter.html
  2. https://web-assets.bcg.com/e4/c4/5b3786d44055aa2b31749e98bd9e/bcg-and-comite-colbert-luxury-outlook-2022-final.pdf
  3. https://www.bcg.com/press/30june2022-luxury-industry-accelerating-corporate-responsibility-to-meet-consumer-demands
  4. The Future Of Luxury: 7 Trends To Stay Ahead In 2023 (luxe.digital)
  5. https://www.mckinsey.com/industries/retail/our-insights/state-of-fashion
  6. https://www.deloitte.com/global/en/Industries/consumer/analysis/gx-cb-global-powers-of-luxury-goods.html

This article is written by Priyanka Kadalage [ https://www.linkedin.com/in/priyanka-kadalage-892727b8 ]