Web Summit: IWC Schaffhausen on the tokenization of physical products and loyalty
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Business
Lisbon - How are efforts in leveraging blockchain, NFTs, and tokenization enhancing customer experiences, building loyalty, and adapting to changing market trends? It is this question that IWC Schaffhausen has attempted to answer through the ongoing integration of new digitally enhanced initiatives at the company.
Speaking at tech conference Web Summit, the chief digital and transformation officer at the Swiss luxury watchmaker, Katharina Doepke-Schelling, alongside Web3 solutions platform Arianee’s CEO and co-founder Pierre-Nicolas Hurstel, shared insights into the duo’s ongoing digital venture, which began in 2021.
How it started
“We sell luxury watches, but ultimately, we sell an experience around them,” Doepke-Schelling explained to the Web Summit audience. “I think every one of you who might own any luxury product remembers that feeling when you first get [a watch], when you first hold it, when you reward yourself for something or celebrate a lifetime. And that's what we're ultimately selling. And this is based on a lot of physical interaction and experiences.”
Doepke-Schelling continued: “So I'm taking us back to 2021. It was right in the middle of the pandemic, it was winter, our boutiques were closed, our events were about to be cancelled, but we were also about to launch a new collection. We were brainstorming about how to get this experience towards the customer when they might be staying at home. That's when we started partnering up, we started brainstorming how we can use that new technology to support our strategic goals.”
Swiss IWC Schaffhausen has been a leader in luxury watchmaking since 1868.
Founded in 2018, Arianee is a French company that operates in the blockchain and decentralised technology space. It focuses on the tokenization of physical assets and the creation of verifiable digital certificates. Brands already using the platform include The Richemont Group, Breitling, Mugler, AZ Factory, Paris Fashion Week, Audemars Piguet, L’Oréal, and Moncler. Arianee raised 20 million euros in an investment fund in May 2022.
IWC in the digital realm: How it is going
Customers become blockchain members
With every watch purchase, IWC customers gain a new blockchain-based wallet in their client account, in which an NFT digital passport resides, explained Arianee’s Hurstel sharing what the digital adventure looks like today. “On the other hand, if you are interested in the tokenized loyalty programme of IWC, you can get a new wallet in an app where you own more keys, in the full spirit of Web3, which is totally interoperable: you can move your tokens* everywhere; you can collect them when you go to an event, when you buy a special watch, or when you buy some merch. There's very different approaches that create an openness for everyone.”
Hurstel then spoke of IWC’s token-linked website (NFT.IWC.com, The IWC Diamond Hand Club), where, depending on the tokens customers gather, they will have access to varying experiences. “This programme is fully alive, and welcomes new people every day; obviously new watch owners, because this is now part of the regular business, but also new aficionados and people who love the brand and discover the brand through this organised loyalty programme.”
A non-fungible token, mostly known as an NFT, is a digital certificate that helps to authenticate ownership of a digital asset. Backed by the blockchain, an NFT can be tied to unique assets like an image, music or avatar that are non-interchangeable. The concept really flourished at the beginning of 2021, and since has allowed designers and artists to claim ownership over their work online.
Brands have also integrated the feature into their own metaverse-based projects, selling off NFTs that can be used as ‘keys’ to provide access to exclusive content, membership events or digital products that can be worn in a virtual world, as a new form of engaging consumers.
Read more here: A complete guide of metaverse terms you need to know
Encouraging engagement throughout the journey
When asked, Doepke-Schelling shared that IWC has a lot of examples of engagement with the digital project that resulted in a sale, but she shared one encouraging story in particular.
“We had one of the first utilities that we launched when we invited customers to join us at a very small private concert of Hans Zimmer (IWC collaborated with the Academy Award winner film music composer in 2022, ed). And we've had two students that found us on an NFT forum join us there. Recently, we learned that one of those students who just graduated bought his first IWC watch.That really showcases the type of community event that we wanted to have,” she continued. “And it starts with the customer, who’s not the customer yet, so we don’t just use [the experience] to build loyalty within the customers we have, but also as an acquisition of the actual insignia. It’s so interesting that they joined the community before they even purchased [a watch]. That’s an amazing cycle to create for sure.”
The importance of launching digital passports
IWC stated that the introduction of digital passports arose from customers' preferences and needs. “The need to really know all about your product, have all the product details in one space including the warranty, being able to prove that it's an authentic watch and that you are the true owner of that watch. And all of that is paired with the general needs of having safety, security, but then also the need of convenience,” Doepke-Schelling added. “Who hasn't searched the whole house for a piece of warranty paper when a product needed a service, or tried to find a receipt when something got lost or stolen? All of that is now at the customer's fingertips, adding that level of safety for them. And also then being able to hand that in one piece to the new generation, if you hand over your watch to your children or to someone else (when you sell it).”
IWC Diamond Token. IWC SCHAFFHAUSEN ENTERS WEB3 WITH METAVERSE EXPERIENCE AND NFT PROJECT, March 2022 Credits: IWC SCHAFFHAUSENDynamic data
Hurstel highlighted the transformative impact of IWC's digital capabilities. “When you look at what IWC has now as a marketing capability, it is the capability to distribute data. They have this tokenization engine that is built inside their information system, allowing them to distribute a token as a proof of ownership when someone buys a watch, distribute a token as a proof of engagement when someone does something, and you now have something completely different in the marketing tool portfolio: the native dynamic data that is owned by users,” he emphasised.
“Normally what you do is collect emails, you collect birthdays, and you end up with this already immediately obsolete data that's hard to protect, hard to update. All of a sudden, when you change that towards data distribution capabilities, you're able to put data in the hands of your users and let them use this data in a dynamic way. When you plug that into your CRM [customer relationship management], you now have a knowledge that never was never there before. You know your customers like never before. You can connect with them like never before. And so that has nothing to do about hype, that has to do about regaining control over the brand's digital presence and relations while giving it back to themselves at the same time,” said Hurstel.
What’s next?
And what’s next? “For us mainly, it's always important to be where the customer is at. We want to generate meaningful conversations with our customers, meaningful experiences,” Doepke-Schelling shared without giving away future specifics. “We're 150 years old and we've managed to continuously reinvent ourselves to stay relevant for generation over generation. And we want to continue doing that.”
Tech conference Web Summit took place from 14 to 16 November in Lisbon, Portugal.
