By Pablo Guerra, Director of Business Development, LuxTag.io

The last month of the year has seen bold moves by the two leaders in retail luxury, Louis Vuitton Maurice Hennessy and Richemont Group, two apparently different moves (almost opposite) that, however, show an underlying theme once we dig a bit deeper.

The first, which has made more headlines worldwide, is LVMH purchasing (above market price) Tiffany&Co. Bernard Arnault, CEO of LVMH, keeps on his aggressive buying spree and takes home one of the most iconic brands out there. Consolidation and M&A seems to be the rule lately in the luxury markets, after episodes like the recent Barneys NY meltdown show to us that traditional retail is suffering a lot of pressure.

The second move, which has been more of an “insider industry news” (Thanks to the great work by Rob Corder) is that Govberg Jewellers, a longtime and reputed luxury watches dealer has seen how the Richemont Group, which includes an impressive portfolio as Montblanc, Jaeger Le Coultre, Vacheron Constantin, IWC, Cartier or A. Lange & Söhne, has suddenly pulled all his brands from their physical stores as well as the digital platform “Watchbox”.

The reason for this was set in 2018 when Richemont purchased the second-hand online platform Watchfinder; later, just before Basel 2019, Govberg Jewellers announced their new Certified Pre Owned platform under the brand Watchbox. This online marketplace includes a personal register, mobile app, and eventual blockchain certification to track and trace not only watches but owners, consumer behavior, trends, repairs, etc.

The third and last part of the puzzle is that this summer, Richemont has announced his partnership with Arianee, a French startup that claims to create and distribute certificates for luxury items using blockchain technology. The announcement has come with the enrollment of Vacheron Constantine, one of Richemont’s brands, into the initial pilot, and the intention of making a full onboard of the rest of their portfolio companies.

So, in the end, both moves by these two giants of the luxury industry come to one thing: More control. LVMH, which at this point hasn’t cleared their intentions towards blockchain technology or about the Certified Pre-Owned (CPO) market, keeps looking to have as many brands as possible under their umbrella.

They have also started a timid approach to a Blockchain solution with AURA, in some kind of partnership with Consensys (Ethereum Enterprise Alliance) that since its announcement six months ago has not been seen anywhere.

Richemont, on the other side, is clearly betting on this new layer of security and data generation to try to have more control over their products and fight against counterfeiting and grey market / parallel imports.

Next year (by Basel 2020) will probably show with more clarity which brands will embrace blockchain; it’s clear that brands like Rolex, with more than 800,000 watches being made yearly seems not interested to tackle second hand and CPO markets by themselves; they leave that to other platforms and companies. In fact, Rolex has been sharing space in Dubai with Watchbox recently.

However, other brands like Audemars Piguet, Franck Muller, or Chronoswiss, with smaller production, have shown interest and commitment to riding the last trend in luxury retail, the DTC, Direct To Consumer.

With several products that are only obtainable through their own flagship stores, they are more interested than ever into knowing its customers, maintaining a closer relationship, and taking care of their product at every stage of the supply chain.

Photo: Chronoswiss’ 2018-2019 Blockchain Series

Companies like Compellio, EONPass, or LuxTag are already delivering on “blockchain-powered” projects in Asia and Europe. It seems that at this stage, it is more efficient to deploy services that can bring a ready-to-market solution than jumping into “consortiums,” which at this point are little less than industry meeting hubs.

What is clear is that this incoming 2020 is going to be interesting to, pardon the pun, watch.

®“LuxTag”, Trademark registered.

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