The National Retail Federation estimated last year that consumers planned to spend $4.3 billion on jewelry for Valentine’s Day. But before they swipe their credit cards, shoppers almost always care more about the authenticity and value of a product over price alone.
Tracking the provenance and origins of valuable goods, like jewelry, is not only integral to maintaining customer’s trust but it’s also good for business.
According to a paper by the Consumer Goods Forum, some estimates say counterfeit products may cost the global economy up to $250 billion a year. The same study found in the jewelry market alone, the cost of fraud to insurers tops $2.5 billion a year—that’s a lot of fake jewelry.
Which is why diamond and jewelry business leaders are finding new ways to track these materials from at all stages of the global supply chain, from the mine to the retailer.
Currently, diamonds, jewels, and gold move through a complicated supply chain and originating each of their sources is difficult. A more transparent supply chain could ensure all parties—including consumers—intimately understand the movement and provenance of jewelry for quality assurance and authenticity.
An easier, more secure solution for retailers to effectively manage these transactions is to put them on a blockchain. Blockchain’s a trusted and shared system of record that creates a permanent digitized chain of transactions, and provides all parties with the ability to accurately and quickly trace products throughout the world.
And a blockchain is increasingly becoming a good way to track a product’s authenticity. A new IBV study released this January surveyed 203 organizations in the consumer goods industry and found that 18 percent of the total of consumer industry organizations are currently using blockchain. The top consumer area which those surveyed see blockchain having the most transformative effects are product safety and authenticity.
For example, a consortium of gold and diamond industry leaders recently announced he first cross-industry initiative to use blockchain to trace the provenance of finished pieces of jewelry. Asahi Refining (precious metals refiner), Helzberg Diamonds (U.S. jewelry retailer), LeachGarner (precious metals supplier), The Richline Group (global jewelry manufacturer) and UL (independent, third party verification) are launching the TrustChain Initiative, powered by the IBM Blockchain Platform, delivered via the IBM Cloud.
The TrustChain Initiative tracks and authenticates diamonds and precious metals through every stage of the supply chain as they become a piece of finished jewelry. It provides digital verification, physical product and process verification, and third-party oversight on one platform. The Initiative has already full tracked six styles of diamond and gold engagement rings on the blockchain network.
The goal is to instill trust in the origin and ethical sourcing of jewelry by bringing together a community of responsible and ethical organizations across the complex and multi-tiered jewelry supply chain. With the entire jewelry ecosystem –from miners, manufacturers, wholesale suppliers and retailers –on a single digital platform there is better quality assurance and authenticity.
Increased level of transparency with customers about where their products come from will offer reassurance that deepens their brand trust. And this is at the heart of why all businesses across industries are transforming: to maintain trust with their consumers.
By tracking the movement and provenance of jewelry, supply chain members to retailers can help customers go beyond the 4Cs – color, carat, clarity and cut –and start to realize even more value from increased traceability, transparency, and unquestionable truth.