MILAN — The Aura Blockchain Consortium is ready to make its next big leap — from fashiontech start-up to full-fledged responsibility enabler — mindful of the incoming regulatory frameworks and digital product passport, AI takeover, as well as the ongoing trust issue luxury and fashion brands must navigate.
Although sustainability has somewhat slipped out of the fashion conversation — if only due to a shift in the global political agenda, geopolitical turmoil and macroeconomic challenges — the consortium’s recently appointed chief executive officer Marcel Härtlein, a former Lalique executive, is plotting Aura’s scale up.
He is set to work in tandem with the newly minted chairman, OTB’s Stefano Rosso, who succeeded Prada’s Lorenzo Bertelli in the role.
“Sustainability is going through a moment of tension, in a way, [but] I would say that structurally, the direction has not really changed,” Härtlein said, in his first interview since taking on the job. He succeeded Romain Carrere as CEO of the nonprofit blockchain organization, which was established in 2021.
“I believe that Aura’s technology in the area of traceability [and] transparency can still somehow be part of the solution…and play a crucial part in helping the whole industry to become better, to build up the trust based on data. Because I think today, trust is not automatically there with the brand. It needs to be earned. And increasingly, what we see on the market is that it also needs to be verified. And that’s our sweet spot,” he said.
“Supply chains remain global. Consumers still expect this level of transparency, I think they are interested in better understanding what is the ecological impact of the products, and this kind of information has more and more impact on the buying decision…and generally speaking, also for many luxury brands and their customers, topics like circularity and resale are becoming more and more relevant,” Härtlein explained.
The Aura tag on a Marni leather goods piece.
Courtesy of Aura Blockchain Consortium
The next phase of growth for the consortium entails scaling up adoption, offering more services, readying the digital product passports, or DPP, on a broader scale and overall generating added value for the sector in the long term — beyond the initial blockchain frenzy.
“What I now would like to achieve in the next phase is to move a bit away from being seen as a pure software company and into a value-creating industry orchestrator,” Härtlein said.
“I think the time of experimentation is somehow over. The next phase is about helping our members to drive the adoption within their companies,” he said, touting the work done over the past five years.
Aura today includes more than 50 luxury brands and has registered more than 80 million products on its blockchain.
“I’m coming from a member brand [Lalique]…[so] I stepped into this role with a very clear perspective…on the power, but also the complexity of the whole setup….I think that is also one of the reasons why our board has chosen me as someone coming from a brand [who can] understand a bit the complexity in implementing these kind of projects, and then also [how to] tackle the right things to create value in the company,” Härtlein said.
Aura promotes the use of a single blockchain solution open to all luxury brands worldwide to help consumers trace the provenance and authenticity of goods. It offers a range of solutions to its member brands, including NFTs and a Multi-Token Minter.
The blockchain can include both upstream, meaning production and sourcing info, and downstream, meaning loyalty programs or insurance tied to an object, as well as repair and resale.
The digital product passport for a Prada jewelry piece.
Courtesy of Aura Blockchain Consortium
Härtlein’s goal is to provide more than a technological infrastructure.
“We want to initiate now the next step into becoming a scale up…what we want to do is really shift from a blockchain platform into an ecosystem orchestrator and maybe from an IT-driven approach to a more business-driven, value-led approach in the future. Now we are in the middle of this transition,” Härtlein said.
“As usual for a start-up company, I would say that the past couple of years have been a lot about finding the sweet spot. It initially started as a project, which also tried to be in line with all the technological trends on the market. And I think there has been a tremendous up and down of trends in the past couple of years, with all the buzz around the blockchain, NFTs, the metaverse….But I think now the focus of the consortium is really on the digital product passport, in the context of traceability, transparency and digital identity in general,” he said.
AI is already factoring in across the entire organization, Härtlein said, and not just because Aura fears it could be replaced by cognitive computing.
“There’s a lot of discussion around whether AI makes blockchain solutions less relevant in the future. We actually believe that the opposite is true. AI makes data intelligent, and blockchain makes the data trustworthy. And I think that the luxury industry somehow needs both,” the CEO said.
“We see AI as a powerful accelerator for our solution, because we can analyze data, we can drive performance and we believe, when all the data is connected, AI is an additional tool on top of that that improves all areas, all functionalities, with forecasting and personalization.…They are very complementary with one another. AI is not going to replace blockchain, but [will help us] to build a more intelligent ecosystem,” he said.
The digital product passport for a Tod’s leather piece.
Courtesy of Aura Blockchain Consortium
Established by founding members LVMH Moët Hennessy Louis Vuitton, Prada Group, Compagnie Financière Richemont’s Cartier brand, Diesel parent OTB Group and Mercedes-Benz Group, the Aura Blockchain Consortium is arguably the leading player in the luxury sector. In 2022, it joined the Sustainable Markets Initiative Fashion Task Force launched by the-then Prince of Wales, now King Charles III, during the World Economic Forum at Davos, Switzerland, in 2020.
Aura’s nonprofit status is an added value, Härtlein contended.
“Our positioning, being a neutral, member-governed consortium, has become somehow a very powerful positioning. Because we are living amid geopolitical tensions…we see increasing power and dependency on all the North American technology giants and I believe that Aura has an opportunity to carve out its sweet spot, or right spot, where its neutrality and nonprofit approach is actually an advantage,” Härtlein said.
“I can imagine maybe four or five years ago, that was not such a powerful argument. Back then it was most probably about the technology. But I think right now, in these times and as we move toward [new] regulations in the upcoming years, this organizational setup is a very powerful statement and more and more relevant for our members,” he said.
Marcel Härtlein, CEO of Aura Blockchain Consortium.
Roman Beer/Courtesy of Aura Blockchain Consortium
From that vantage point, Aura engages in ongoing talks with policymakers to better serve its members, not only with the most updated technological backbone but also consulting them on the best roadmap to meet upcoming requirements.
The European Union’s Ecodesign for Sustainable Products Regulation, or ESPR, was finally passed in mid-2024 and is seen driving the larger scale adoption of the digital product passports.
Moving forward, the EU Commission will propose a delegated act — to be adopted in 2027 — detailing all requirements companies are expected to meet. The policy expects companies to be in compliance with the requirements by the end of 2027 and mandates to be enforced in 2028.
Härtlein sees regulations as opportunities to advance fashion and luxury’s business models.
“We see it not necessarily as an obstacle, but rather as an opportunity…[helping] to accelerate the business transformation for our members,” he said. “I truly believe that the ones that tackle the challenges and these current requirements as early adapters will then have a competitive advantage at a later stage.”
The digital product passport for a Bulgari Serpenti Tubogas watch.
Courtesy of Aura Blockchain Consortium
“The whole industry is at a strategic inflection point right now. We believe that all the brands should now start with their DPP projects to build up the technology but also build up their skillset internally….A DPP project is not only a software implementation, but it’s really also an initiative that triggers a digital transformation and business transformation…it’s a super good initiative to make your organization fit for the future,” Härtlein concluded. “The best projects, the best digital projects, are the ones that have an effect on non-digital processes.”
