NFTs. Cryptocurrency. The Metaverse. Ethereum. Blockchain. Cardano. Bitcoin. Extended Reality.
Several of these terms and labels are ones a number of the non-millennial/non-Gen Z watch folks reading this may look at with “deer-in-the-headlight” eyes, but they are terms with which Gen X and those before should start making themselves familiar, and as quickly as humanly (or, non-humanly) possible.
The 2021 edition of Dubai Watch Week included a panel as part of Horology Forum which covered several of the aforementioned terms. The panel – titled, “Cryp Tic-Tac-Toe, Where’d Human Error Go” included those familiar with cryptocurrency and more, including a panelist by the name of Leonie Flückiger; the co-founder of Adresta AG which creates a digital twin for luxury watches and securely stores information about authenticity, ownership, and history on the blockchain.
Post her appearance on that panel as well as her brilliant stint on the “Carte Blanche” panel (visit the Dubai Watch Week YouTube channel to see both), we asked Leonie if she would weigh in on a few questions about the future of the metaverse.
DWW: How do you envision the watch industry to be replicated in the metaverse in 20 years?
LF: There are different ways for brands to be present in the metaverse or profit from this shift. The first trend we see is brands creating digital assets or NFTs. These digital assets can be collectibles, or your avatar wears them in the metaverse. Advantages can be representing ownership and authenticity of physical objects, creating emotional value by making information accessible digitally, or generating alternative revenue by creating and selling NFTs independently from physical products. Just as people do in the real world, gamers have long used digital clothes to establish their online identity.
On top of that, brands can own partials of lands in blockchain-based worlds such as "decentraland" to showcase and sell their products. Brands can have real-estate in the metaverse just as in the real world by owning brand names, URLs, land, or creating ads.
Moreover, we see an immense opportunity, especially for brands with decades of history, designs, and intellectual property. Next to a digital copy of the product, brands can reissue content in the metaverse and make their history accessible. The metaverse is then a place to meet, exchange, and learn about tradition in a mobile-first digital world.
For us, the magic happens when these digital assets are the entry ticket to an ecosystem—a place where you can interact with people, play games, and have experiences.
DWW: What do you think the sales channels look like in the future?
LF: We discussed intensively with our customers if “phygital” is the future, meaning that we try to bring the best of e-commerce and brick-and-mortar retail together. Customers educate themselves online and often know what they want upon arriving at the physical store.
We believe in two things. First, our research showed that people want to buy a watch in a physical store to try it on and get that experience. However, there is an immense opportunity to accompany the customer digitally before and after the buying experience. Future sales channels must include the whole customer journey - from before we even want to buy a watch until the first service and potential resale or inheritance. We can leverage new technologies to help the customer during the education, buying, and owning phase.
Brands can engage with the consumer in a highly targeted and personalized way. They become fans and have stronger retention to the brand, meaning that they will become the best ambassadors to help a new customer during the education, buying, and owning phase. The watch industry has a fantastic community, and recent technology can help leverage that power and reinvent the traditional sales channel.
DWW: Do you see more brands having digital stores online?
LF: Digital stores or sales events are already happening. One great startup is the “ShowCase,” which digitizes the watch industry's point of sale using a box, camera, microphone, and good lightning to communicate with the customer.
The internet impacted the purchase as customers are often well educated about the product and price. Everything has become more transparent, and the new generation might be less loyal. I do not have to buy all my jewelry and watches at the store in my village. We analyzed this phenomenon in the traditional financial industry, where it became effortless to open a new account and find another financial advisor online. So, what makes people stick to their bank or a band? Our research showed that the personal connection is critical. Therefore, brands must also be present online and talk to the new consumer group like they are used to communicating. We always emphasize a mobile-first approach because the digital generation interacts and is influenced via this device. In that sense, technology can get you closer to the consumer.
DWW: Do you feel brands will use games as a marketing/discovery tool and will also use e-sports?
LF: Brands are already exploring the gaming world and tapping into the potential of the growing yearly amount of video gamers, which reached three billion in 2021. To no surprise, gaming can attract new customers. Brands use games as a marketing vehicle and as an actual revenue-generating source. By 2024, the global games market is said to generate revenues of $218.8 billion. Selling digital assets comes with numerous benefits that will eventually make brands explore the gaming world. Just think about the huge margins because brands do not need raw materials or face overstock. I love that creativity is limitless because concepts such as gravity or static colors are not present in the metaverse.
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