The millennial generation is promising to continue growing the trend of the growth of this market. However, some challenges need to be addressed if this is to be achieved.
The luxury products market has tripled in size over the last 20 years and as of 2018 was 254 billion euros. The US remains to be the biggest market for luxury products at a growth of about 60% per year while the global rate is at 57%.
Challenges facing the luxury products industry
Counterfeits. Luxury brands lose sales up to $30.3 billion every year to counterfeits.
Lack of luxury experience. An image of a luxury product on the internet does not give potential customers what they need to make a decision.
Producing customized product. Luxury brands watch out the trends and build products that they ‘think’ will fit the customers.
What is VeChain and how it can solve problems in the Luxury Goods market?
Quoting the official website, VeChain is a public platform that aims at connecting blockchain technology to the real world. VeChain achieves this by providing a robust economic model, a comprehensive governance structure and IoT integration at an advanced level.
Application on the luxury market
Fight counterfeits. VeChain has smart chips that luxury brands can embed on their products. A potential buyer can thus use a mobile phone application to determine the authenticity of the product. All the information of the product will be displayed on the blockchain and therefore no room for counterfeits.
Capture customer behaviour
Those who can afford luxury products may want to customize such products. VeChain has some in-built tools that can analyze the behavior of customers and send offers based on the gathered information. It also creates room for user-generated content where customers post their experience with the luxury products on the blockchain.
Track information within the supply chain
VeChain puts control back into the hands of luxury brands. The current supply chain is so disorganized which makes it vulnerable to counterfeits. It is effortless to insert fake products on the supply chain because it is not transparent and fool-proof. It thus means that brands will know the number of orders placed, products released and their state while on transit. The supply chain will thus become data-driven, transparent and seamless.
Quality assurance
Most customers cannot tell if the luxury product is compromised in any way during its lifecycle. The blockchain can show all the information from the raw materials, manufacturing process up to the distribution. The customer can thus pinpoint if there are any mistakes that will affect the quality of the final product.
Who controls the nodes on the VeChain?
By now you already know that most transactions on the blockchain network are validated through consensus. VeChain uses Proof-of-Authority to verify transactions on the blockchain.
Let us take for instance if Rolex decides to use VeChain. Rolex can become the exclusive validator on the network, and thus customers will be able to confirm the authenticity of the products. Proof-of-Authority puts back the power in the hands of Rolex and any other luxury brands that use VeChain.
This article by Nica Tudor was originally published at BlockchainFlashNews.com: