The luxury watch market is a multi-billion dollar industry, with consumers around the world spending billions of dollars each year on high-end timepieces. But unfortunately, the luxury watch market is also plagued with fake and counterfeit products, with estimates suggesting up to 40% of all luxury watches sold being fake!
This does not only harm the reputation of the industry, but also puts you at the risk of being scammed and defrauded. However, there is a solution to this problem: using on-chain digital twins, also known as phygitals, to provide a tamper-proof and verifiable record of a watch's provenance.
This technology can help protect you and the luxury watch industry, ensuring that only authentic and genuine products are traded, especially in the secondary markets. In this blog post, we'll take a look at the top four benefits of having a digital twin for your luxury watch.
But before that, let's go through the pain points that exist in the space of luxury watches.
When it comes to luxury watches, it's no secret that they're industry giants. In fact, according to a recent report, the global market for luxury watches is expected to reach a whopping $47.9 billion by 2025. But with such a lucrative market comes a dark side: fraud. In the world of luxury watches, fake and counterfeit products are a major problem, and they can cause serious headaches for both brands and consumers alike.
For luxury watch brands, the issue of fraud is a major concern. Not only does it hurt their reputation and credibility, but it can also lead to significant financial losses. These fake and counterfeit products usually lead to unhappy customers that end up shifting to a competitor because of their bad experience.
According to a report by the Federation of the Swiss Watch Industry, the global market for counterfeit watches is estimated to be worth over $1.2 billion per year. This means that roughly one in every three watches sold on the market is fake.
Counterfeit watches do not only hurt the brand whose reputation is tarnished by the fakes, but they also affect the watch lovers who are duped into buying them. Another problem for luxury watch brands is the difficulty of tracking and verifying the authenticity of their products.
When you buy a luxury watch, you often expect to receive a certificate of authenticity that proves the watch is genuine. But with fake and counterfeit products flooding the market, it can be challenging for brands and for you too, to ensure that the certificates moving around in the market (especially in the secondary market) are accurate and reliable.
One way to combat counterfeiting and other fraudulent activities in the luxury watch industry is to use an on-chain digital certificate. This type of certificate is linked directly to the physical watch, and it provides a tamper-proof record of the watch's provenance and ownership history.
“Phygital” is a term that is used to describe the combination of physical and digital elements. In the context of tokens on the blockchain, phygitals refer to tokens that are tied to both a physical object and a digital representation of that object.
For example, a phygital might be a luxury watch that has a physical version that can be traded and collected like a traditional watch, but also has a digital version that can be tracked via the blockchain. The digital version of the watch would be the digital twin, which would provide proof of ownership and uniqueness.
To understand more about the workings of phygital NFTs, click here to read our previous article that explains this.
Digital twins also allow the showcasing of collectibles without physical constraints and risks, and have become popular in the current digital era. In addition, digital twins can be used to offer other benefits and utilities, such as experiences and passes. The sky's the limit when it comes to adding value via digital twins.
Rolex- The luxury timepiece maker, has filed trademarks for plans to enter the world of web3 with its own non-fungible tokens (NFTs), which will be used to offer digital collectibles as well as digital asset auctioning software.
The company has also filed trademarks for “downloadable computer software for use as digital wallets” to be used with its NFT marketplace. The move comes as other major corporations are entering web3 with similar filings, and as the line between owning luxury items along with a linked digital twin becomes increasingly blurred.
The Timex Group has partnered with the Bored Ape Yacht Club (BAYC) to create a limited-edition collection of phygital non-fungible tokens (NFTs) that can be used in both the real and virtual worlds.
The Middlebury, Connecticut-based company will produce 500 timepieces and 500 NFT digital twins for the project, with watches expected to ship in 2023. Each watch will come with a unique digital twin in the form of an NFT that will unlock additional features and experiences within the virtual world, such as discounts and access to exclusive events.
BAYC members will receive a fully hand-assembled Timex Waterbury Classic model watch as part of the project.
There are other luxury brands like Tag Heuer also that have entered this space, which indicates that the future is not that far where buying a luxury watch without a digital twin may seem stupid or not so common.
While these traditional brands have entered the space, there are a few new and innovative brands born out of this space in order to bridge the gap amongst the watch lovers and also with the watch designers/creators.
One example of such a brand is KRON. A brand born out of this new WEB3 era, that understands the benefits of the space and is focused on co-creation between watch creators like AS and watch lovers to bring the watch industry closer by making it more engaging.
The world of technology is constantly evolving, and the importance and urgency of digital transformation has caught the attention of countless major brands. As we emerge from the COVID-19 pandemic and begin to understand its impact on the industry, some key challenges are emerging.
One of the biggest questions facing brands and companies is how to reimagine the customer experience in a post-pandemic world, where users have become more digital. To remain competitive and leaders in their space, it is mandatory for companies to adapt to these changing consumer behaviours and preferences, and one of the ways of doing that is going phygitals.
By incorporating phygital technology into watches, brands, or resellers can offer you a more engaging and authentic experience, as well as the ability to verify and trade their physical assets on the blockchain. The possibilities and potential of this is endless, and the future indeed looks bright for phygitals.
We hope you enjoyed the article, as we have something lined up especially for you. Hint- Co-creation in the watch industry. Subscribe to our newsletter to not miss out on it.
warranti is a marketplace and ecosystem for authentic high-value collectibles. We use digital twins to ensure faster and more efficient trading, fewer costs and on-chain authenticity. The physical asset is kept with a highly secure and licensed partner until sold and redeemed.
The digital counterpart, also known as a digital twin, that represents the asset ownership, belongs to the owner of the asset. Collectors can trade, exchange and redeem their assets at any time, providing a seamless trading experience.