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Posts tagged as Josh Luber

What LVMH’s blockchain foray means for luxury fashion

The time for luxury goods to get serious about authenticity and accountability could finally be here. Earlier this week, bitcoin and digital currency news site CoinDesk reported luxury group LVMH plans to launch a blockchain in May or June of this year, beginning with just two of the groups 70 brands: Louis Vuitton and Dior.
While a representative for LVMH stated the group has no comment, a source familiar with the project told CoinDesk that LVMH hired a full team of blockchain experts to work on the project, alongside ConsenSys and Microsoft Azure. The blockchain, code-named AURA, is designed to provide proof of authenticity of luxury items, and trace their origins from raw materials to point of sale and beyond to used-goods markets.The next phase of the platform will explore protection of creative intellectual property, exclusive offers and events for each brands’ customers, as well as anti-ad fraud.”Getting into blockchain for a luxury group like LVMH gives the brand a chance to stamp out fake goods in an increasing global counterfeit market — a $450 billion-plus industry as of 2016, per the Organization for Economic Co-operation and Development.
Experts believe it could also have major impacts on the luxury resale market.It helps LVMH better fight fraud, which is so massively valuable for a brand like Louis Vuitton that is trying to uphold standards, pricing and quality, said Vic Drabicky, January Digital founder and CEO.Things that arent authentic begin to massively drop in price or disappear, and for those that do have authentic pieces, it allows customers to experience the product in the proper way, which should bring more people into the brand.By creating a blockchain, or a decentralized database where users can add information about a product as it makes its way from where the materials are being sourced to the creation of the finished product (like, say, a Louis Vuitton bag), LVMH would be opening a window into the companys supply chain.
The nature of a blockchain would mean that no one can change any information added to the ledger.Youll be able to run an authentication along the journey of that product from alligator to register, said Israel Mirsky, executive director, global technology and emerging platforms at OMD Worldwide.
While LVMH would be the first major luxury fashion group to break into blockchain, other luxury segments have already caught on to the trend. The diamond industry, for one, has been active in the world of blockchain in the past few years. Experts believe that by being the first major luxury fashion group in blockchain, LVMH would further cement itself as the leader in the space and force competitors to play catch-up.The risk is relatively low, said Drabicky.Last year, LVMH reported roughly $53 billion in revenue, so unless this is a billion dollar enterprise, were talking about something that is a very low risk monetarily.Some initial reports suggest LVMH plans to whitelist the solution so that other luxury brands can use the technology to assess their own supply chains and authenticate the products consumers are purchasing.
Like most technology systems, the more users contributing to a blockchain, the more valuable they tend to be, said Mirsky. Its definitely in LVMHs interest to include as many of their competitors within the same system as possible.Whether that white-labeling is happening by LVMH or it’s actually ConsenSys or JPMorgan, it isn’t quite clear at this point. Should an outside source be responsible for the white-labeling, and not LVMH, Mirsky believes more brands would benefit from the technology.Plus, if competitors start to see real benefits to AURA, and LVMH isnt directly profiting from it, Mirsky said he thinks its increasingly likely that more brands will join the ecosystem.

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‘The hardest thing is trust’: Inside luxury fashion’s new demand for skilled authenticators

There are two kinds of fake watches, according to Charlie Emslie, a watchmaker and authenticator at watch resale platform Crown & Caliber.There are watches that incorporate cutting-edge 3D printing and laser technology that are nearly indistinguishable from the real thing, and there are watches that “look like they wrote ‘Rolex’ in Sharpie on the face.” While the second category may not be worth much more than a laugh, the former has made the watch resale world treacherous for consumers looking to buy. Its a similar situation across luxury fashion categories.

Because of modern technology, the fraudsters out there have gotten really good, said Emslie. Some of the exterior faking the dials and cases is so good, even veterans cant tell whether a watch is authentic looking at the outside alone.As resale platforms for luxury goods, watches, sneakers and more have proliferated, the need to ensure customers that theyre getting what they pay for has increased. Enter the authenticator.Having founded this company, the hardest thing to create is trust, said Hamilton Powell, CEO of Crown Caliber. There’s an estimated $100 billion in pre-owned watches sitting in closets and dressers in the U.S. But historically, people have not wanted to buy used through eBay or places like that because of a lack of trust.The No. 1 most important thing we wanted to be known for was trust.We went to great lengths: finding the best of the best in terms of talent, no-questions-asked returns, a full-year warranty. Those kinds of things matter in the resale space.

Crown Caliber recruits most of its authentication talent from the brands it is seeking to authenticate. Emslie and his team have a combined 40 years of experience working at brands like Cartier, Rolex, Omega and Breitling.In addition, the company has a rigorous in-house training program to ensure that authenticators are constantly learning and staying ahead of counterfeiters.The demand for authentication has coincided with a boom in the luxury resale market.The fashion resale market is expected to hit $41 billion by 2022 and resellers like Rebag and The Real have opened multiple physical locations around the country.Creating a career pathWatches are not the only area where authenticators have become essential.The combined rise of resale and sneaker culture has made sneaker resellers major players in the fashion space.Part of the difficulty for sneakers in particular is that, unlike watches where most watchmakers could be tapped for their expertise, there arent the same type of craftsman behind sneakers.For Josh Luber, CEO of StockX, that position had to be created from scratch.We couldnt just go find sneaker authenticators and hire them, Luber said.There werent any. We had to create that job.

Like Crown Caliber, Luber said StockX’s authenticators undergo a rigorous educational program in-house to improve their sneaker knowledge.We rip apart sneakers to find out everything about them, he said.There are training, classes; it’s a process. Shoes that are super rare get seen by multiple people, and one sneaker authenticator can see 500 or 600 sneakers per day.For resale companies that sell a large variety of products, like The RealReal, the logistics of authentication and educating a team of authenticators become even more complicated. The Real’s chief authenticator, Graham Wetzbarger, oversees a team of more than 100 authentication experts in categories like handbags, sneakers, watches, jewelry and ready-to-wear.

Wetzbarger, whose personal expertise is in ready-to-wear, said hes supervising people who are far more knowledgeable in different aspects of authentication than he is.I need to be able to speak the language, said Wetzbarger.I took a three-day class with a watch authenticator because I need to be able to know what our watch authenticators are talking about. Its good to hire people who know a lot more than you about these things.

The depth of knowledge required for each category it would be impossible for one person to know it all.Wetzbarger said authentication is fascinating because, outside of fine art and watches, it is a “career path that didn’t really exist a few years ago.” The Real recruits people from a wide variety of sources, depending on the category. Wetzbarger said the majority of the company’s authenticators are either recent graduates from schools like the Fashion Institute of Technology and Parsons School of Design, or have experience working at a brand The Real sells.The four pillars of authentication Wetzbarger said the four pillars of his authentication process, which make up a universal approach that almost any authenticator will follow, are: quality of the materials, construction of the piece, hardware components and brand-specific identifiers. The weight given to each pillar changes based on the category.

For example, authenticating jewelry is about 90 percent focused on the quality of the materials, since the most common way to fake jewelry is for the stone itself to be something other than what it claims to be. For something like a $600 cotton Gucci T-shirt, the brand-specific identifiers will be the most important, since a cotton T-shirt is simple to make and simple to fake.The more desirable something is, the more it will be counterfeited, said Wetzbarger. Sneakers are at the top of the hype spectrum, and those can be very difficult [to authenticate] if its not your area of expertise.

At the high end, watches and jewelry counterfeits can be really high-quality. Ready-to-wear is the most obvious.If its supposed to be a $2,000 Chloe dress and it feels fake, it probably is.The common theme among resellers is the importance of trust.Before the existence of any of these platforms, people wanting to buy or sell pre-owned fashion had no choice but to brave unregulated sites like Craigslist or eBay (although eBay has since introduced limited efforts toward authentication). But the entire premise of the new resale platforms is that they are the safer, more reliable alternatives to unregulated marketplaces and that means they need to build trust.

This trust is essential for resellers to survive. Recently, The Real and Chanel have been in a major legal battle over whether the reseller or anyone other than Chanel is qualified to say what is and is not a Chanel bag.If resellers gain a reputation for selling fakes, their whole business could fall through. Building, and more importantly maintaining, that trust is essential for resellers to survive.If someones new to resale, there’s some hesitation that what they might be buying is not real, said Wetzbarger. Seeing the expertise behind it and seeing how seriously we take it makes them comfortable and removes some of that hesitation.Building trust is the only way to win. For luxury in particular, you have a lot of money on the plate.

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