In 2019, French luxury conglomerate Moët Hennessy Louis Vuitton (LVMH) awarded the LVMH Innovation Award to 3DLook, a smartphone body-scanning app. The app used artificial intelligence (AI) and augmented reality (AR) to take body measurements from photographs. The startup received a one-year membership to LVMH’s accelerator program, an incubator at a Paris startup campus. Such advancements from the luxury giant reveal an essential fact: the future of luxury retail is here, and it involves the usage of modern technologies.

While digitisation was the way forward for almost every industry, the pandemic has further accelerated the process. The luxury brands industry has been riding this digital wave in full swing while embracing digital strategies. A novel development in this sphere has been LVMH’s strategic partnership with Google Cloud, to accelerate innovation and develop new cloud-based AI solutions.

According to a statement released by LVMH, the partnership aims to ’empower LVMH’s Maisons,’ its luxury brands, ‘to create new, personalised customer experiences that foster long-term growth.’

Digitalising the lux
The primary determinant of sales for luxury retailers such as LVMH and Gucci is the exclusivity of these brands. Many economists call these Veblen Goods— products that see an increase in demand as their price increases due to exclusivity or perhaps because of its appeal as a status symbol.

A vital shift in consumer patterns is taking place among the wealthy—more of them are doing their shopping online. McKinsey and Company reported in 2018 that 80 percent of all luxury sales were digitally influenced in some way. It further added that nearly one-fifth of luxury sales would be done online by 2026.

The pandemic has further accelerated the shift in purchasing patterns for luxury brands. As per Antonio Belloni, LVMH’s Group Managing Director, “The last 18-months have been transformational” and have intensified the need to leverage data and make client experiences “More fluid.” A Bain & Company report stated last month that the luxury products market’s return to revenue growth in the first quarter of 2021 was partially powered by a boost in online demand. Such developments thus require these retailers to shun the in-store exclusivity concept and bring forth new digital innovations.

Given this, Google Cloud will work with LVMH’s brands to boost demand forecasting and inventory management and help better target customers’ target product recommendations. As mentioned earlier, the pandemic has clarified the importance of delivering a smooth online shopping experience whilst maintaining inventory levels digitally. This partnership with the Alphabet Inc. unit will thus help LVMH, as per Google Cloud’s CEO Thomas Kurian, “Understand the consumer better.”

The two companies have also said that the partnership aims to integrate AI and ML technologies into Maisons’ human talent whilst maintaining LVMH’s strict privacy and security conditions. The focus here will initially be on the luxury goods giant’s top fifteen brands before spreading further.

LVMH has further stated that it will leverage Google Cloud’s technology and AI/ML tools to improve new business use-cases at scale. Additionally, LVMH will also use Google Cloud to modernise its IT infrastructure and build the agility, security, cost-efficiency, and performance required to perform its business operations at scale.

Belloni also announced that this significant partnership reflects the conglomerate’s “High ambitions in this area.” LVMH created the incubator and accelerator programme to encourage new business and innovation in the luxury market– highlighting raw material durability, reinvention of stores, and supply chain management.

In 2019, LVMH announced a new tool called Aura, created with New York-based blockchain software company ConsenSys and Microsoft technology. The instrument used blockchain technology to track goods in the supply chain to prove their authenticity.

Summing up
The new opportunities that would arise out of Google Cloud and LVMH combining their industry expertise will, as Antonio Belloni has remarked, create “A unique and unforgettable experience.” Both sides have declined to unveil any additional elements of their deal. It is, however, made known that the partnership will run for at least five years and will include training for LVMH’s staff by Google Cloud.

Earlier last year, Google Cloud partnered with French car manufacturer Groupe Renault to store the company’s manufacturing data. The Louis Vuitton contract will also benefit Google, which is in serious competition with cloud rivals Amazon Web Services (AWS) and Microsoft Corp. In France, Google Cloud ranks behind the French OVHCloud—which has an 11 per cent market share in the country.

In another step towards integrating these technologies, both companies will launch a Data and AI Academy in Paris to accelerate development and innovation further. Thomas Kurian has said that Google Cloud is proud to enter “Such an innovative and extensive partnership with LVMH to power its innovation through cloud technology and AI capacities.” The two companies appear to have a clear sight of the future of luxury retail and customer service—and they hope to be the ones driving it.

Although most developers use GitHub to organize and share open-source code, funds like Coinbase Ventures, Distributed Global and Digital Currency Group are betting on a crypto-native alternative.

Former ConsenSys token guru Harrison Hines is now CEO of his own startup, Terminal, which closed a $3.7 million seed round in late 2018 for a developer hub specifically built for decentralized apps (dapps). The hub quietly went live over the summer and is undergoing a soft launch this week.

Unlike the Microsoft-owned GitHub, which requires a quick workaround in order to use smart contracts, Hines told CoinDesk Web3 developers will be able to deploy software directly from the Terminal platform. Projects like MakerDAO stablecoin loans rely on smart contracts (software that automatically executes business logic) to safeguard hundreds of millions of dollars worth of cryptocurrency.

“For a large ecosystem like MakerDAO with tons of smart contracts live, Terminal allows us to curate starting points for developers tailored exactly for their needs,” MakerDAO engineer Vamsi Alluri told CoinDesk.

Terminal CTO Janison Sivarajah told CoinDesk this platform was designed for Web3, the shorthand for an internet populated by applications that aren’t hosted or controlled by a single entity.

“Once that smart contract is actually deployed on the blockchain, it is a live object that lives on one of these decentralized protocols,” Sivarajah said. “People need an interface to surface them, view data about them and interact with them. You can’t do that on GitHub.”

Terminal also offers limited node services, for free, and direct conduits to external infrastructure providers like Infura or BlockCypher.

Stepping back, ethereum fans generally use “infrastructure” to mean an external party running nodes and offering blockchain data as a service. Unlike bitcoin, which has plug-and-play hardware node options, most experts agree it is cumbersome to run an ethereum node with full archives. In order for dapps to take off and hit the mainstream, token connoisseurs say, the industry requires more independent node operators and easier access to node data.

“You have to run nodes across all those [testing, production, etc.] environments,”  Sivarajah said. “Someone could use the hosted nodes that we provide … because that’s a lot cheaper and easier to get off the ground. But then you can point the production environment to your own infrastructure.”

To be clear, Terminal isn’t looking to compete with ConsenSys-owned API provider INFURA, which served 5,000 daily users as of July 2019, according to INFURA product manager Michael Godsey. Hines told CoinDesk his legal complaint against ConsenSys founder Joseph Lubin, alleging the former employer owed Hines $13 million in unpaid profits and benefits, was resolved amicably out of court.

“We are planning to, hopefully, get every ConsenSys project onto Terminal and using Terminal,” Hines said. “I do think there are opportunities for us to work with several of them in the future.”

Growth plans

Terminal’s freemium business model is predicated on the hope that, like GitHub, some developers will eventually pay for premium support services.

“Alerting and notifications are just one feature in Terminal, but it is a feature we have been exploring the most to assist 0x developers,” engineer Jacob Evans, of the exchange startup 0x, told CoinDesk. “Terminal also has a number of great features that will help support developers at the prototyping and hackathon stage. It’s critical that developers can play around and experiment efficiently.”

With regards to such experiments, Sivarajah said Terminal is running roughly seven different nodes to support projects using blockchains like xDAI, Rootstock and POA, in addition to private testnets.

“A contract on ethereum can easily be deployed on any of the other networks that use the EVM [ethereum virtual machine] blockchain,” Sivarajah said, estimating two-dozen networks currently use the EVM. “We will also see which other frameworks are gaining traction.”

Traction will be the deciding factor. Dapp.com data suggests no ethereum-based dapp currently attracts more than 2,000 daily users.

If you build it, will they come?

From the perspective of Distributed Global partner Johnny Steindorff, a Terminal investor, part of this relates to how much manual work is required to maintain reliable Web3 applications.

“I think middleware is one of the biggest present-day opportunities to drive mainstream [blockchain] development and adoption,” Steindorff told CoinDesk.

Indeed, BlockCypher CEO Catheryne Nicholson told CoinDesk that “running ethereum infrastructure is really painful.” Yet her company has thousands of customers, ranging from rogue developer teams to enterprises, paying for such ethereum API access.

With more companies providing affordable support services across the ecosystem, Hines said, startups can avoid that hassle and focus on their core competency. He added that Terminal is currently raising a Series A, with aims to eventually offer self-hosted versions of the platform for developers who prefer not to rely on centralized websites.

“Most developers need redundancy,” BlockCypher’s Nicholson said, referring to how teams need backups in case one ethereum API provider has a hiccup. “It’s not one company eat all. You need multiple players to make that ecosystem work.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Terminal.