Hublot is no stranger to combining watches with art and NFTs, as the brand continues its partnership with contemporary artist Takashi Murakami. Their latest collaboration for 13 new timepieces and NFTs was unveiled earlier this month at the Glass House in New York. The Classic Fusion Takashi Murakami Black Ceramic Rainbow reinterprets Murakami’s iconic smiling flower motif. The NFTs in question are linked to a limited edition of 13 new and unique Classic Fusion watches that will be showcased at the 2023 edition of Watches & Wonders in Geneva.
Of course, Hublot is not alone in the world of NFTs. The Jacob & Co. Astronomia Metaverso Venus, a stunning timepiece nominated by GPHG (Grand Prix d'Horlogerie de Genève) in 2022, is also a fantastic example of timepieces with NFTs. Thanks to a partnership with UNXD, a leading NFT marketplace for digital luxury and culture, the Metaverso collection offers buyers NFTs with physical asset redemption, original signed sketches, access to exclusive Jacob & Co. events, in-store exhibitions and Geneva factory visits. Dinner with Jacob Arabo, founder and chairman of Jacob & Co., and an opportunity to design a crypto-inspired watch series are included in the deal too. Indeed the GPHG nomination for the timepiece makes a strong case for NFTs that are already making their presence felt in the world of horology.
So, are NFTs the way forward for luxury watches?
NFTs: What Are They?
An NFT (non-fungible token) is the digital equivalent of a certificate of authenticity. Fungibility is usually defined as the ability of an asset to be interchanged with other assets of the same value. They are unique digital signatures recorded on a blockchain, much like a public ledger that records transactions. This information is encrypted, warranting the NFTs’ authenticity, thereby making them more valuable.
If we look at the world of luxury, several brands, such as Gucci, seem to have embraced the crypto craze. Gucci partnered with 10KTF, an online shop in the virtual city of New Tokyo run by Wagmi-san, a fictional world-famous craftsman, to create the Gucci Grail NFTs. The NFTs include digital outfits, designed by Alessandro Michele, former Creative Director, Gucci, and created by Wagmi-san, to dress PFPs (profile pictures) from 11 NFT collections, including Bored Ape, World of Women and Cool Cats.
Watchmakers are also having a stab at creatively involving NFTs, offering them as rare collectibles and digital assets, metaverse wearables and a passport to exclusive events.
Collectibles and Digital Assets
Hublot's collaboration with artist Takashi Murakami appeals to the art world as well as the NFT domain. It comes with static NFTs featuring the artist’s signature smiling flower motif. For the Classic Fusion Takashi Murakami Sapphire Rainbow, launched in 2022, limited-edition NFTs were offered to the owners of the physical pieces, who can be traced through Hublot’s e-warranty system.
Jonathan Stalder, Representative and Distributor, Hublot, explains the idea behind the initiative, “We were already the first on the blockchain in terms of a warranty validation, so this was the next step.” Every customer who bought the watch received the NFT for free.
Even TAG Heuer took an interesting approach to Web 3.0 with the Connected Calibre E4 smartwatch, launched in June 2022, that lets you display your NFT artworks on your wrist.
Manuel Emch, delegate of the Board of Directors, Louis Erard, feels metaverse wearables are, currently, an untapped area. He tells GMT India, “Most video games are free; it’s the player’s equipment that generates revenue. I think this is something that can be replicated. Young clientele wants the best for their Metaverse avatars and this includes acquiring the best possible brands. So, I see this as a future business for sure, but it will take time.”
Les Ateliers Louis Moinet was one of the first Haute Horlogerie brands to experiment with NFTs as metaverse wearables, in collaboration with Exclusible and Tafi. They launched 1,000 original, limited-edition digital timepieces, each with a spectacular 3D artwork and a one-of-a-kind experiential utility, based on the Space Revolution super watch. In an official statement, Thibault Launay, CEO, Exclusible, revealed that all pieces sold out at 0.2 ether in seven minutes and soon appeared in the secondary market for double their purchase price.
Loyalty Programmes and Exclusive Access
With NFTs, brands can explore new avenues of providing exclusive perks and experiences. For the Le Triptyque Louis Erard x Alain Silberstein collection, Louis Erard partnered with Qiibee, a Swiss start-up specialising in loyalty programmes, using blockchain. On purchasing the collector’s box set, the owner is accredited with an NFT. It allows him or her to customise the digital token with a private message. Emch of Louis Erard says NFTs will remain an important part of the brand’s strategy.
Here’s another example. Panerai partnered with Arianee, a leading end-to-end Web 3.0 solution for brands, for its Radiomir Eilean Experience Edition, a 50-piece limited-edition watch. The digital asset unlocks exclusive content and evolves as the experience unfolds to finally reveal the art piece. The brand organised a sailing trip to the Amalfi coast for buyers, calling it “the Eilean Experience”. Each NFT was time-stamped to reflect the specific details of the owner’s experience.
Why Invest in a Watch NFT?
NFTs cement a product’s legitimacy, ensure transparency and provenance and are a solid way to establish a sense of community, all of which are value additions for brands as well as collectors.
Transparency and Provenance
To be sure, NFTs provide a type of security that wasn’t previously available. Brands like Breitling aim to utilise NFTs to make watch purchases safer and build a comprehensive customer service platform with easily accessible information. Owners will be able to consult Breitling anonymously via an embedded chat feature. Every transaction related to the watch will be recorded on the blockchain, ensuring more transparency in the secondary market.
One of the biggest issues with buying pre-owned watches involves counterfeits. A digital certificate can, therefore, help make the process of authentication easier. ORIGYN, a foundation dedicated to identifying and authenticating products, and WatchBox, a leading platform for buying, selling and trading pre-owned luxury watches, partnered with each other to produce Utility NFTs for watches, allowing them to be traded independently, without involving the physical timepiece.
H. Moser & Cie. too has developed an ecosystem offering blockchain product authentication for security and transparency and exclusive privileges through digital assets ownership. Each Genesis timepiece is engraved with a unique QR code that allows the wearer to access the ecosystem.
The community of NFT collectors mirrors the watch collectors’ community. So, brands are leveraging NFTs to connect with their clientele and focus on community-building. Buyers can now engage with a brand and other buyers, join private events and be whitelisted. A case in point: De Bethune collaborated with the Private Jet Pyjama Party (PJPP), granting their members exclusive privileges. Owners of the limited 5 NFTs received an opportunity to visit the De Bethune manufacturing unit in Switzerland.
Dillon Bhatt, founder of LuxeForte, a collector and advisor to luxury brands, says, “NFT groups have a real sense of community built around them, like how the Private Jet Pyjama Party brings collectors together in a Discord where they communicate regularly.” He likens this to MB&F community-building. “It’s quite similar to the MB&F tribe. To be a part of the MB&F tribe, you need to own an MB&F,” he explains. “Max Busser (Owner and Creative Director, MB&F) has created this community around him, his watches and collectors, and the gateway to that is owning an MB&F. Similarly, owning the NFT is the gateway to the community of PJPP. The mindsets are very similar. I think we’ll see a lot more alignment between the watch industry and NFTs in the future.”
Are Watch NFTs for Everybody?
Watch NFTs are predominantly being aimed at tech-savvy consumers, who understand the intricacies of blockchain. Asked about who is actually buying watch NFTs, Emch says, “Digital savvy, crypto enthusiasts, tech entrepreneurs — people who understand what it means not just today but what it can mean tomorrow.”
Mohamed Salman, a watch collector and an NFT collector and creator, feels that brands should concentrate on Web 3.0 marketing to promote watch NFTs to the crypto/NFT community. This is because they’re already in that space and have a better understanding of it, he says. He adds, “People in the NFT space have to see your project as valuable.”
Watches are now being considered an asset class and a store-of-value. So, for some traders, NFT watches may solve the problems of storing and shipping too. Salman says this is similar to how some watch buyers keep their watches, especially Rolexes, in mint condition, the factory-wrap intact, so that they can make profits out of them in the future. He adds, “Last November, Rolex filed a trademark with the patent office to enter into the NFT/Metaverse space and subsequently, they officially entered the Rolex pre-owned market. It wouldn't be surprising if Rolex launches watch NFTs, where you own the NFT that can later be traded for the physical piece.”
What Does the Future Look Like?
It looks predictably bright, even after discounting the current slump in the crypto market. More brands will start adapting as they realise the true potential of NFTs. Bhatt of LuxeForte believes that only the best projects will survive.“The ones that can weather the storm will do well. So, we’ll see fewer projects in the future, but those will be higher-quality projects,” he stresses.
Some think it’s too early to march ahead though. Emanuel Bitton, Regional Market Director, Armin Strom, says, “For us, it's (NFTs) not on the agenda. Our biggest challenge right now is supply. We need to cope with the demand to produce the watches.”
NFTs can breathe new life into watch-owning for those who believe watches are already obsolete. However, some say the look and feel of an actual mechanical wonder are irreplaceable. While describing how watches have stood the test of time, Emch sums it up beautifully, “People understand and appreciate the value of a watch and enjoy the anachronistic logic; the beauty of watchmaking is that it's anachronistic.”