Watch brands turn to blockchain – FHH Journal

Over the past twelve months or so, a growing number of watch brands have embraced blockchain technology, pioneering what some are already describing as the next big revolution after the internet. The subject came under discussion at one of the debates hosted by the Fondation de la Haute Horlogerie at Watches and Wonders Geneva 2021. One of the panellists, Angela Au-Yeung who is Chief Digital Officer at Vacheron Constantin, made clear her conviction that “this technology will radically change how customers and brands interact. Blockchain will become part of daily life. It will take some time to get there, but it will happen.” The very real advantages of blockchain were confirmed by Pierre-Nicolas Hurstel, CEO of Arianee, a start-up developing a global standard for digital certification that recently raised €8 million ($9.5 million) in a seed funding round. “Blockchain creates digital value that can be traced, exchanged, transferred and stored,” he declared. “The fact you can digitally prove that you are the owner of a product gives access to communities, services and experiences. That’s where the revolution lies.”

Watch owners anonymous

When watch brands started to experiment with blockchain, Breitling and Vacheron Constantin being among the first, they did so primarily as a means of authenticating a product and, by extension, as part of the fight against fakes. Since then, projects have expanded in scope alongside transformations in the business environment. Growth in e-commerce sales, rising demand for pre-owned watches, the digital shift in customer relations, not to mention pressure for supply chain transparency and traceability, as well as sustainability and CSR, are putting new demands on watch firms. Blockchain can be part of the solution. In practice, a watch is given a digital identity or passport that it will keep throughout its various lifecycles and different owners – given the longevity, even perennity, of an Haute Horlogerie timepiece. Information is stored as a succession of tamper-proof blocks. “Think of it as storing information securely and anonymously in a digital safe,” says Pierre-Nicolas Hurstel. “The customer is the only person who has access to that safe, through their phone, without ever having to provide personal information.”

In addition to authenticating the watch, the digital passport can also store content that brands might add to, as Angela Au-Yeung explained: “We started out with a pilot project for our Les Collectionneurs watches. These are vintage Vacheron Constantin timepieces that our Heritage division tracks down on the pre-owned market. These watches are authenticated, refurbished if necessary, then offered for sale to our customers. We were able to use our amazing archives to add stories and information about these watches to their digital certificate using blockchain. Later this year we will start rolling out the next stage, which is to issue a digital certificate for our new watches. We have a lot to offer, and blockchain is a means for us to digitally and securely interact with our customer, whether he or she is the watch’s first owner or potentially one of its later owners.” Vacheron Constantin calls this new environment The Hour Club, and insists on the fact this exclusive digital client platform encompasses more than blockchain certification: “Through The Hour Club, connoisseurs and owners of Vacheron Constantin watches will be able to discover a world of experiences with content developed specifically for them, including invitations to events held by the Maison. The Hour Club is a watchmaking universe in its own right. With the new blockchain digital certification, customers take control over the quality, authenticity and traceability of their watch and its environment.”

An open-source solution

The company behind Vacheron Constantin’s progress in blockchain is Arianee, which has also won over the Richemont group and its Panerai and Roger Dubuis brands, as well as Breitling, Audemars Piguet, MB&F and Manufacture Royale. This independent non-profit consortium is developing a global digital certification standard for valuables that is based on an open-source protocol: a thumb of the nose to the all-powerful Gafam (Google, Apple, Facebook, Amazon, Microsoft). The key being transparency. “Brands commit to a digital passport,” says Pierre-Nicolas Hurstel. “It’s then up to them to decide what type of information they want to share with the customer, bearing in mind that this information can be certified, through blockchain, by a third party. Ethical sourcing of gold would be an example.” This traceability can help brands win the confidence of consumers who, as Alexandre Wehrlin, Managing Director of the European Business School Geneva, concludes, “are putting increasing pressure on brands to step up their efforts in terms of sustainable development and supply. Blockchain can certainly help with this.”