Replica watches: First a frenzy, then a crash: The world of NFTs and cryptocurrency has had a tumultuous year. Since then, there has been little news from watch brands on this topic. To understand if the initial hype was just a fad, we need to dig a little deeper into what NFTs mean for the watch industry and the scope of their interests.
The term ‘NFT’, short for ‘non-fungible token’, entered the mainstream during the Covid-19 pandemic. Such was her meteoric rise that she was named “Word of the Year” for 2021 by the Collins Dictionary. Dictionary definitions of the buzzword define it as a unique record of data that is recorded, or minted, on a decentralized digital ledger called a blockchain. It is this guarantee of authenticity and traceability of ownership that fueled the massive rise of NFTs, fueled in large part by the rise of cryptocurrency.
In 2021, the Financial Times, citing blockchain analysis firm Chainanalysis, reported that global crypto trading volume on NFTs reached nearly $41 billion. To put that in perspective, in the same year, figures published by the Federation of the Swiss Watch Industry (FH), showed that Swiss watch exports, an indicator of the watch industry as a whole, reached an all-time high of around of $24.1 billion. (22.3 billion CHF).
With the Swiss city of Zug known as ‘Crypto Valley’ and home to over a thousand blockchain companies, the watch industry had a front row seat to watching the NFT craze. It comes as no surprise then that a legion of gamers quickly took an interest and began launching their own NFTs.
Pioneers include the oldest watch retailer, Beyer Chronometrie (click here to read our dedicated article) and independent brand Louis Erard (click here). Other high-profile attempts at Jean-Claude Biver’s ‘digital twin’ from his personal Hublot Big Bang prototype, and Jacob & Co.’s SF24 Tourbillion digital-only NFT piece, to Ressence’s Spymaster watch and NFT computer-generated video, unsurprisingly, they were promoted as collector’s items for sale.
Other examples include the likes of Vacheron Constantin replica watches, Bulgari (read here), Panerai replica watches, Hublot, Franck Muller, Frederique Constant (read here), as well as independent brands like Chronoswiss, SevenFriday, Louis Moinet, and Hanhart. These initiatives often go beyond token sales to establish a broader range of consumer utility NFT applications.
Auctioneers also got in on the game. In April 2022, Sotheby’s ‘Gérald Genta: Icon of Time’ offered prototype drawings of the late designer’s iconic Swiss Luxury Fake Watches, consigned by his widow Evelyne he. All original artworks were accompanied with their digital twins and certification of origin in the form of NFTs. The highest grossing lot sold for just under CHF 700,000 from a private collector in Asia.
In April 2022, Sotheby’s ‘Gérald Genta: Icon of Time’ sale offered prototype drawings of the late designer’s iconic timepieces, accompanied by their digital twins and certification of origin in the form of NFTs.
After the storm
Then came the crypto crash. Spooked by inflation fears and the threat of recession, the recession was dubbed “crypto winter.” Top NFT deals declined along with a decline in NFT trading.
As of this writing, US dollar sales values on the largest NFT marketplace, OpenSea, have plunged 98% from their peak in May this year to a new low, according to live tracking data. on DappRadar.
Since then, NFT-related news from watch brands has become scarce. To understand if the initial hype was just a passing fad, we need to dig a little deeper into what NFTs mean for the watch industry and the extent of its vested interests.
Then came the cryptocurrency crash. Spooked by inflation fears and the threat of recession, the recession was dubbed “crypto winter.” Therefore, the main NFT offers decreased. Since then, NFT-related news from watch brands has become scarce.
Are NFTs dead?
“What has ended, which I think is good news, is the hype of NFTs,” Vincent Perriard, president of the relaunched independent brand HYT and co-founder of Origyn, said in a video interview. “My point is that there was some trash and that will never come back. It was a bubble. But the market is cyclical and will go up again. So now the need for serious projects is critical.”
For an industry famously bent on upholding traditions, watch companies are now treading carefully. In general, established brands are willing to communicate that their efforts are not influencer-driven gimmicks. Hublot, which has launched its own dedicated page on OpenSea, notes that before selling NFT replica watches, the brand had already been using blockchain technology to certify the authenticity of all its sell replica watches.
Chief Executive Ricardo Guadalupe wrote in an email: “Our main objective is not motivated by a monetary ROI (return on investment). The purpose of the page is to start building a Hublot crypto community and promote our partnership with [renowned artist] Murakami and Hublot.eth. We also wanted to show that high-value transactions are possible. This is just the beginning and ROI driven projects will potentially continue over time.”
Manuel Emch, Louis Erard’s boss, shared the same views during our follow-up interview. “There is a typical logic in this evolution. It’s normal at an early stage where things get speculative. Once you have eliminated the peaks and valleys, in the long term the trend will still be there. We believe in it. Of course it has impacted our planning.
We have postponed some NFT projects to adapt to reality, but they are still in the pipeline. We see no reason why we should change our plan over time. It is a long-term strategy, not a short-term opportunity. We are also building this community to better serve our customers. At the end of the day, the most important thing is to add value”.
“What is over, which I think is good news, is the hype of NFT. My point is that there was some trash and that will never come back. It was a bubble. But the market is cyclical and will go up again. So now the need for serious projects is critical.”
Back to serious business
No one understands the concept of ‘long term’ better than Beyer Chronometrie, the prestigious Zurich retailer now in its eighth generation of family management since its founding in 1760. “There has to be substance,” said Philippe Meyer, director of marketing, in a telephone conversation. interview. “For a traditional watch store like ours, it was a bold move to do something so innovative. And we’re happy we got it right. Most importantly, we can use our NFT project to connect with customers and offer benefits to a special community. It was interesting, even surprising, to find that some of our non-crypto traditional customers got involved.”
A common thread observed across most watch industry NFT activity is that they are not necessarily related to crypto speculation. Brands have been quietly working on so-called “utility NFTs” since the beginning. As the name suggests, owners can mint these NFTs to provide inherent rights to facilitate perks or rewards, such as headline-only events, priority access to new series releases, and loyalty programs.
“Once you have eliminated the peaks and valleys, in the long term the trend is still there. We believe in it. Of course it has impacted our planning. We have postponed some NFT projects to adjust to reality, but they are still in the works.”
The community will decide
The key is community building. Brands can foster community relationships and support through their NFT projects even if market conditions are volatile. Hublot replica watches is doing just that. As Guadalupe says, “It has helped us create new offers in our e-commerce and interact with our customers in a new way.”
IWC also goes with everything. The brand claims that its IWC Diamond Hand Club is the first NFT-based membership program ever created in the luxury and watch industry.
It’s fair to say that all participants in this nascent business are still discovering the true value of NFTs
and how to make them a sustainable part of their overall strategy. However, the format definitely appears not to be dead. Early adopters see NFTs as added value for customers and are confident in their potential. Perhaps it is more a question of when, not if, they will have mass consumer appeal. It’s quite conceivable to imagine a day when new acquaintances will want to scroll through your phone
and show you their NFT collection the same way they might show you their photos.
It is a vision embraced by TAG Heuer replica. The company has ventured into the NFT space from a completely different angle. The latest update to the TAG Heuer Connected Caliber E4 smartwatch has an additional lens visor for users to display their NFT artwork on their wrists.
“Our connected watch has a unique product fit to bridge the digital and physical worlds,
and our traditional customers and the NFT community share the same aspirations,”
explains Teddy Florent, Managing Director of the Connected Watch Business. “The current macroeconomic dynamics are temporary. NFTs are bringing [proof of authenticity] to the Web that didn’t exist before. It is absolutely a revolution. I strongly believe that it is key in our data [ownership]. From there, NFTs can create an avenue of possibilities that is huge. And it’s just a start.”