The luxury goods market is on an upward trajectory of growth in general, with sales surpassing $257 billion in 2021. Figures are expected to rise further as a new customer base with different demands enters the space. Blockchain use cases in luxury goods and innovative applications of this technology are enabling luxury brands to better attract, engage and deliver on the demands of this growing audience.

Millennials and Gen Z consumers are increasingly more interested and thus targeted as the major market for luxury goods makers. This new market has new and evolving customer demands relating to sustainability and a better customer experience. Some of the leading luxury brands are already responding in order to satisfy these demands.

Innovations and new applications of technology, particularly blockchain and facets of NFTs and the metaverse, are helping to facilitate this. Brands such as Louis Vuitton, Prada, and Cartier are realising the benefits of web3 and blockchain technology that’s underpinning everything from digital product passports to NFTs.

5 Key Blockchain Use Cases in Luxury Goods


1. Transparency and Traceability in the Supply Chain

Today’s supply chains are still dogged by a myriad of issues, which greatly hinder transparency and traceability, leading to uncertainty in ethical sourcing and sustainability.

More and more retailers and producers are turning to blockchain technology to prove the provenance of goods and materials, recording the source, and therefore the ethical and sustainable status of their materials, on a transparent and immutable digital ledger in order to both deliver and prove sustainable luxury. Blockchain and sustainability go hand in hand with its distributed ledger that is secure, unalterable, and traceable.

Not only that, but supply chains, which connect consumers, distributors, manufacturers, retailers, and suppliers, can track everything that’s going on, from the picking of raw materials to the finished product.

Allowing the entire supply chain process to be recorded on immutable distributed ledgers offers all parties associated with the goods access to key information that they can trust. For luxury goods makers, this provides huge added value for their brand.

More transparent and traceable supply chains also lead to more efficiency and a reduction in silos and supplier fraud, culminating in cost savings and efficiency gains.

2. Sustainability and Ethical Sourcing

With heightened demand from millennials and Gen Z to prove the goods they are buying have been made with sustainable and ethical practices, blockchain can aid luxury goods makers in appeasing this new market.

Blockchain is ideally suited to providing evidence of sustainability and ethical sourcing given its ability to deliver complete oversight through the entire sourcing and manufacturing process. By providing access to the information stored on this distributed ledger, through the application of digital product passports, consumers can verify and prove the origin of their products.

Just as transparency and traceability can offer customers in the luxury goods space insight into where their product comes from, it can also prove manufacturing sustainability and ethical sourcing.

For a luxury goods maker, having a publicly trusted, traceable and transparent supply chain means they can offer their customers a full guarantee of ethical sourcing of materials, sustainable manufacturing processes, and ensure authentic production of goods at the time of purchasing, as well as resale.

However, it is not just the sourcing of goods and materials in the luxury goods market that fall under an ethical scope; fair labour practices can also be expedited in producing luxury goods.

For example, luxury goods such as electric vehicles, smartphones and laptops — depend on lithium-ion batteries, and thus, cobalt. However, mining for cobalt carries a high cost in human suffering as it comes from small-scale mines in the DRC, where children and adults labour under harsh and dangerous conditions to extract ore by hand.

However, with blockchain’s shared, distributed ledger, it is possible to track production from mine to battery to end product, capturing information on the degree of responsible sourcing at each supply chain tier.

Downstream companies can access the verified proof that they support and contribute to responsible sourcing practices, which they can then share with auditors, corporate governance bodies, and consumers.

New call-to-action

3. Product Authenticity and Combatting Counterfeit Goods

As the luxury goods market grows, so does the attached counterfeit market. According to figures, global trade in counterfeits, including luxury goods, will increase to $991 billion in 2022, nearly double that of 2013.

Today’s generation of luxury goods buyers demand assurances of authenticity as part of a more remarkable customer experience when buying. With the use of blockchain in luxury goods in the form of digital product passports, digital twins or NFT certificates, consumers can remain confident in knowing whether a product is authentic. Utilising these blockchain tools and attaching them to real-world items provide verifiable and unalterable proof of authenticity and add greatly to building brand trust.

For luxury brands, they are expanding their offering to include provable authenticity while the consumer trust and loyalty to the brand will also blossom. Additionally, having a provable digital product passport — which has already shown an ethical supply chain — can even bolster the resale market for a brand.

Real-time digital certificates can be issued and validated with ease, enabling customers and brands alike to be assured of a product’s authenticity. This removes the need for brands to spend time and resources on painstakingly authenticating individual products (or outsourcing this task) as they move through the resale market, and opens up opportunities for brands to participate in the resale market in a much more direct way.

Luxury watch manufacturer Breitling has, since 2020, gone forward with attaching a digital passport to each of its watches, reaping the many benefits that come with this.

4. Non-Fungible Tokens (NFTs)

Another popular blockchain use case in luxury goods are NFTs. NFTs are not only in high demand these days; these blockchain luxury goods offer multiple applications and opportunities for retailers and their customers alike. From creating collectables to being used in exchange for experiences and as rewards, NFTs can form a significant addition to a luxury goods maker’s arsenal and even provide access to spaces in the metaverse. Luxury brands are increasingly trying to enhance their customer experience to attract the younger generation, and NFTs are a great tool to do this with.

Looking at recent applications, many instances of luxury brands are already rolling out NFTs as digital wearables, digital art, and even digital land.

NFT collectables, skins, and avatars are an easy way to enter the space for luxury retail brands. French premium brand Balenciaga launched a digital line of Fortnite fashion apparel, which could be purchased with in-game currency.

Prada also announced that it would team up with Adidas Originals to launch Adidas for Prada resource. This “first-of-its-kind” NFT project invites fashion, design, and crypto creators to collaborate on a large-scale digital piece inspired by its physical Re-Nylon collection.

Anyone with a digital wallet can contribute an anonymous photograph through this initiative. From there, 3,000 people are randomly selected to mint their submission as an NFT, free of cost. In this way, Prada has not only used NFTs to form a collab, but they have also provided a new way to engage with their customers, provided them with a unique experience, and created digital products that can be sold to bolster revenue.

The opportunities that NFTs can bring to a luxury goods maker continue to grow as they are explored. But the uptake already seen across widespread and established luxury brands is evident of their potential.

5. The Metaverse

As NFTs continue to take hold in the luxury goods market, their application in the metaverse adds another interesting dynamic to a space which is again ripe for opportunity. Blockchain and web3 technology again forms an essential foundation for this new digital realm and can be utilised by luxury retailers as they continue to meet the demands of consumers who want something unique.

The metaverse, where visual representation is critical, clearly aligns well with luxury retail as exclusivity, rarity, and prestige are all features of these two sectors. There is scope for luxury goods retailers to utilise the metaverse to deliver an enhanced customer experience, improve customer retention and loyalty, create new revenue streams, and be a part of the growing web3 movement.

Gucci recently took to the gaming platform Roblox to host a virtual exhibition as a new way to offer an enhanced customer experience. Players on Roblox could purchase digital models of genuine Gucci products for a small amount of in-game currency.

Heineken also took to the metaverse for a virtual, tongue-in-cheek press conference unveiling a new and entirely virtual product called Heineken Silver. The beer launched at the Decentraland-hosted press conference and, in this instance, was a media and marketing hit as the virtual beer garnered a lot of attention from various publications.

Benefits of Blockchain in Luxury Retail

Blockchain can add huge benefits throughout the manufacturing and production of luxury goods, as well as when it comes to the customer experience and added benefits of buying such goods. Even further on, blockchain can help establish and protect the future value of goods and aid in the resale of exclusive items.

By implementing innovative applications of blockchain technology and blockchain use cases in luxury goods, such as digital product passports, or NFTs, brands can benefit in a multifaceted manner. Appeasing and capturing their new Millennial and Gen Z market with a traceable supply chain, leading to ethical and sustainable sourcing, is step one.

From there, retailers can employ NFTs and the metaverse to provide unique and powerful customer experiences that can draw in an entirely new market, as well as new revenue streams. And, of course, customer loyalty and confidence also skyrockets when there are active measures to ensure authenticity via digital product passports or similar solutions.

How Protokol Can Help

At Protokol, our experts offer blockchain consulting, NFT consulting and web3 consulting services as well as our blockchain engineering services and solutions to help organisations understand where a digital passport, a flexible white label NFT platform, or any other blockchain implementation could add real value to their business, and help deliver on the promise of a new era of luxury.

As a web3 and enterprise blockchain solutions provider, we’re also helping luxury goods makers take the next step when it comes to not only proving sustainability and ethical sourcing of their products, but also utilising the innovative Protokol Digital Product Passport to enhance the customer experience and unlock new revenue streams.

We can create highly customisable digital product passports that are secure, interoperable, user-friendly, and work with your existing IT infrastructures. Our solutions contain all that’s needed to authenticate the source of a product to its transfer history and to help provide proof of provenance for luxury goods, as well as utilising blockchain technology to prove sustainable sourcing. All of which will increase consumer confidence in your brand and help drive growth.

Take the first step today and let Protokol help your organisation uncover the benefits of blockchain, digital product passports, or NFTs for your luxury brand. Book a consultation with our blockchain experts to discuss your use case, or learn more about the Protokol Digital Product Passport here.


Discover Blockchain Solutions for Your Luxury Brand

Book a consultation with our experts to understand how blockchain, NFT and web3 technology can help your brand engage new audiences, unlock new revenue streams and validate and authenticate goods.
Book Consultation