The market for second-hand luxury watches is booming. But for the average consumer, it is not always easy to recognize the true from the false and to estimate the real value of the coveted timepiece. Blockchain-based certificates could bring more transparency.
This content was published on November 22, 2020 – 10:15
Watchmaking enthusiasts who wish to acquire the new Rolex diver’s watch should be patient. At the official resellers of the crown brand, the answer is always the same: unveiled this fall, the latest version of this iconic timepiece will not be available in stores for several years.
The waiting list is already very long and the shortage carefully organized, according to the golden rule of luxury marketing that scarcity increases desirability. The Nautilus model by Patek Philippe certainly holds the record for the most sought-after watch in history: the customer must wait no less than 11 years (!) To hope one day to get hold of his watchmaking Grail.
As a corollary, the price of these collector’s watches is soaring on the currently booming second-hand luxury watch market. According to a recent study by the Boston Consulting Group (BCB), the world market for second-hand watches already weighs 16 billion francs today and is expected to experience average annual growth of 8% by 2025. As a By comparison, total sales of new watches are estimated at nearly CHF 50 billion per year.
Need for increased security on the web
However, according to the Boston Consulting Group, if the majority of timepiece enthusiasts today say they are ready to buy a second-hand luxury product, they also express “clear expectations regarding the safety, convenience and service of purchase”. In a gray market where counterfeits and false expertise abound, traceability thus becomes a central element of the strategy of brands wishing to find a place in the sun.
One of the solutions could come from blockchain, this decentralized information storage and transmission technology that has been on the rise for several years. “The blockchain makes it possible to issue a unique, tamper-proof, non-duplicable and ultra-secure digital certificate for each watch. It is the ultimate solution to fight against counterfeiting ”, estimates Loys de La Soudière, co-founder of GoodsID.
This French start-up has been developing blockchain-based authentication certificates for the luxury industry for three years. In 2018, GoodsID raised funds of one million euros from various private investors and the French Public Investment Bank (BPI) to carry out its project.
Swiss watchmaking represents a priority market for GoodsID. The start-up recently opened an office in Biel, a watchmaking city in the canton of Bern, from where it dredges up the main Swiss watchmaking houses. “We are in advanced discussions with two major brands and we are optimistic that they will adopt our solution in the coming months,” says Loys de La Soudière.
Digital revolution among watchmakers
The rise of online sales, which has accelerated even further with the coronavirus crisis, is rapidly changing attitudes in a watch industry that is considered to be conservative and not very open to major digital disruptions.
In mid-October, Breitling announced the issuance of an encrypted passport for each of its new watches, rendering the paper certificate of authenticity used until now obsolete.
The watch brand specializing in aviation watches has chosen Arianee, a French non-profit association that intends to build an independent global standard for the digital certification of valuables as a partner.
The multiple advantages of blockchain
In addition to guarantees related to security and traceability, blockchain-based digital certificates allow watch brands to practice ultra-targeted marketing. “During a sale on the second hand market, the watchmaking house has the possibility of sending a notification to the new purchaser to offer him maintenance advice or an invitation to discover the universe of the brand in one of its shops. She thus uses the product as a means of communication, ”illustrates Loys de La Soudière.
The owner of the watch can, for his part, prove the ownership and authenticity of the watch with one click, which has the effect of increasing the value of his property on the second-hand market. Finally, the digital certificate also simplifies the exercise of the guarantee and can also be used as insurance against theft.
So many advantages that make watchmaking experts say that the use of the blockchain could become widespread within Swiss watchmaking. “Swiss watchmakers are gradually becoming aware of the interest they have in being able to identify their products with modern technologies. This is a positive development, ”says Michel Arnoux, head of the anti-counterfeiting service of the Federation of the Swiss Watch Industry (FH).
Counterfeiting does not know the crisis
Many companies active in digital certification turn to the FH in the hope that their solution will be adapted as a standard for all Swiss watchmaking. “Today, this choice is the responsibility of each watch brand. There is no legal standard that would make it possible to impose a single standard, ”emphasizes Michel Arnoux, however.
“The main objective of the certification of authentic products is to reassure the customer. To think that this technology will put an end to counterfeiting is illusory ”
End of insertion
And be careful not to place too much hope in the blockchain, warns Michel Arnoux. “The main objective of the certification of authentic products is to reassure the customer. To think that this technology will put an end to counterfeiting is illusory, ”he says. The vast majority of people who buy fake Swiss watches do so knowingly and therefore have no interest in certification.
A counterfeit market which, moreover, does not experience the crisis, totally out of step with the unprecedented air gap that Swiss watchmaking is going through. Seizures of fake watches at Swiss customs have increased by almost 25% this year and today almost twice as many fake watches are sold as real ones in the world, reports the FH.
“With the confinement imposed in many countries, consumers have the time to surf the Internet in search of counterfeits that are much less expensive than original Swiss watches which have often become unpayable for ordinary people,” concludes Michel Arnoux.