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Brands’ Challenges in a Post-Amazon Era

19.11.2019

 

Turns out that the arrows go in opposite directions, at the end. (Image courtesy of ZeroHedge)

 

Some rumors during the last months were confirmed with yesterday’s news: Nike stops selling in Amazon. The agreement has been broken after two years of operations. “Brands don’t need Amazon,” Jefferies analyst Randy Konik said. Turns out that the arrows go in opposite directions, at the end.

Nike is making a complete overhaul of his retail strategy, and the advantages of logistics and potential visibility that brings Amazon is not what they used to be. Nike has chosen, and this is not news, to take the “Direct To Consumer” approach.

Interestingly, in the last two days, Amazon shares, with a 232 Billion in revenue, are around -1% in NASDAQ, While Nike Inc, with 34,5 Billion in revenue, is up about 2%.

It is a Brave New World out there, and with an hyper-connected market and eCommerce platforms for new, second hand and Certified Pre-Owned (CPO) products booming, the intellectual property owner has several challenges knocking at his door:

 – A term often abused, a “Mega-Trend,” is developing in retail markets right now, especially in the luxury sector:

With Direct to Consumer (“DTC”), companies aim to be more and more engaged with their clients; technology allows them to skip traditional middlemen and distribution channels, and use the saved money in having a better product and taking proper care of their customers.

 – The rise, year after year, of the counterfeits and knock-offs of the most demanded products. The technology and expertise make it easier to replicate and distribute almost any physical item, evading IP payments, acceptable working conditions, and even minimal security requirements.

There is a reason why we in Luxtag are obsessed with the watch industry: It is the most counterfeited industry in the world, even above leather accessories, footwear, and cosmetics. (Source: OECD)

– After several years making headlines and creating believers and skeptics at equal proportions, blockchain technology is here to stay. Several luxury watchmakers have announced new security solutions using blockchain technology, and more are on the way or still confidential:

– Favre-Leuba pioneered the market at the beginning of 2017 putting all their watches using Hyperledger technology: https://www.watchpro.com/qa-favre-leuba-explains-its-new-blockchain-system/

– Chronoswiss went one step further, launching in March 2018 the Blockchain Flying Regulator Open Gear, from their signature Regulator series, limited to 505 pieces and securing them using LuxTag NEM-based blockchain authenticity and ownership tagging.

– Hublot presented in November 2018 an exclusive line of watches limited to 210 units (relating to the maximum technical amount of 21 million Bitcoins in existence) that can only be acquired using Bitcoin.

– Franck Müller launched in May 2019 a limited edition of his Vanguard line, with an embossed Crypto wallet in it.

– Vacheron Constantin announced to add blockchain-powered authenticity certificates to their products.  (https://usa.watchpro.com/richemont-extends-blockchain-pilot-to-include-all-vacheron-constantin-collections/)

– Big names like Audemars Piguet, Rolex, and Maximilian Busser & Friends are reportedly looking into using innovative technologies such as Blockchain not only to secure their exclusive products but to create added values for them and their customers.

 The list keeps growing as the market, and the technology matures and is already in major news outlets like NYT:

 (https://www.nytimes.com/2019/09/11/fashion/watches-blockchain-vacheron-constantin.html)

 Also, sales aggregators like Chrono24 or Watchbox (https://robbreport.com/style/watch-collector/watchbox-pre-owned-luxury-watches-launches-worldwide-eg17-2763862/) are slowly entangling collectors and brands together

 And it’s not only about watches. Richemont Group (SWX:CFR), a US$ 14b revenue luxury giant with brands like Cartier or Montblanc are in the process of a full onboard.

The recent release of our new product Papyrus is an important milestone not only for LuxTag but for any company looking to add a full set of features to their products:

– Better track&trace capabilities; 99.9% uptime and anti-tamper records. A fully customizable UI, dashboard, and mobile app, so the link between the brand and the customer is stronger than ever.

– Built-in customer engagement features for connecting with the stakeholders that matter most, the product’s end-users

 – A whole new set of customer data and behavior: Every transaction of the “digital twin” gathers useful data for future business decisions, market analysis, and success analysis.

 – An extra security layer to fight against counterfeiting: Possibility of using Public, Private, or Hybrid Blockchain to maximize security, auditability, and transparency.

 Don’t hesitate to contact us for more information!

Pablo Guerra Garcia – LuxTag Business Director Europe – [email protected]

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