Luxury brands have been incurring huge losses worldwide in terms of sales and brand reputation due to fake copies of their products. Annual sales loss due to counterfeit goods in the clothing sector was 26.3 billion euros and in the cosmetics and personal care sector was 4.7 billion euros in 2020.
Smartlabs is committed to the fight against counterfeit industry through the use of its proprietary Blockchain technology that provides a safe and reliable tracking system from one end of the supply chain (the creation or mining of raw materials) all the way to the other end. We help Luxury brands identify provenance (i.e., proof-of-origin) of a product (where the end user enjoys the finished product) that will take their customers through the entire product journey by manufacturing transparency and the supply chain traceability. As a result, luxury brands could look at better prospects of invigorating trust of customers and strengthening their brand image.
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Luxury brands have been the slowest in embracing online sales channels, fearing they would dilute the brand’s image and reduce its sense of exclusivity. However, the two years of pandemic have brought some clear trends. Firstly, markets and consumers are demanding sustainability, diversity and inclusion from companies, as well as increasingly shifting towards transactions through digital channels. Secondly, distribution is playing a central role in catering to these consumer demands. Traditional luxury brands are now exploring technologies like Blockchain, IoT, Cloud, AI, RFID enabled Track & Trace, GSM, etc. to catch up to affluent consumers’ evolving digital habits without losing the sense of personalization and brand feel.
With rapidly evolving technologies and the race to deliver goods instantly at consumer's door-step, buying behaviours have changed significantly over the last few years and this shift is expected to be seen even in the luxury segment. A study by Bain & Co showed that the share of online sales of "Personal Luxury Goods" worldwide increased from 11.7% in 2019 to 22.6% in 2020. E-commerce share in Luxury retail is expected to reach 50% by 2025.
This shift in consumer behavior will drive the focus of these companies away from physical retail stores and to the distribution centers and warehouses. Luxury goods companies are investing heavily in disruptive technologies such as AI, Big Data, AR/VR, Cloud and Blockchain in their Supply Chains to drive maximum efficiency and productivity and meet customer expectations.
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Digitalisation will be an imperative for Global Supply Chains and AI will become the backbone of this technological transformation. Use of AI in procurement, storage, manufacturing and distribution will enhance efficiency and drive greater value for enterprises.
Customers of today are more aware and demanding towards not just a better shopping experience, but also sustainability practices. They are increasingly supporting and identifying themselves with businesses that adhere to ESG norms, driving a change towards trust and transparency in Global Supply Chains. Blockchain based supply chain solutions are evolving for enterprises to reap the benefits of blockchain’s transparency and trust with their customers.
Businesses that will invest in capabilities to collect, analyse and use data will surely have an edge. Use of advanced predictive models for supply and demand forecasting, changing trends and anticipating disruptions will pave the way for enterprises to become global leaders.
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