Timing Is Right for Watchmaker’s Blockchain, NFC Solution

Favre-Leuba is bringing NFC-based data about each of its watches to blockchain-based software, thanks to a solution from cybersecurity technology company WiseKey that tracks inventory and provides brand authentication and a personalized record of each purchased watch for consumers.
Published: October 19, 2018

Swiss watch maker Favre-Leuba is launching a blockchain-based solution to track the authenticity of its products after sales, using data captured via Near Field Communication (NFC) reads. By capturing NFC-based data on blockchain-based software, the company can thus maintain a record of which watch was sold, when and where this occurred, and to whom, as well as any follow-up maintenance or services. This information can then be shared with watch owners.

The company’s NFC technology use began two years ago, while the addition of the blockchain platform begins this year. The NFC and blockchain solution, known as WiseAuthentic Blockchain, was provided by WiseKey International Holding, an Internet of Things (IoT) cross-industry, cybersecurity platform company that provides solutions to the watch industry.

WiseKey’s Carlos Moreno

Favre-Leuba launched the system with NFC tags built into warranty cards, as well as an app for capturing and managing the collected data, as a way to activate each watch’s warranty and track sales. Now, two years later, the system will use blockchain to create a broader, immutable record of its watches long after they have been sold.

Favre-Leuba, the second oldest Swiss watch brand, is headquartered in the city of Zug. Several centuries ago, the firm was a pioneer in watch design and manufacturing. These days, it is looking ahead to identify technology solutions for a 21st-century market, to ensure that its watches are authentic. The company began working with Wisekey two years ago. “We built our platform around identity management,” explains Carlos Moreno, WiseKey’s VP of corporate alliances and partnerships.

Swiss watches face two key challenges, according to Reema Vazirani, Favre-Leuba’s marketing manager: authentication and providing a watch history that extends beyond the sale. Traditionally, she says, tracking a watch’s history and value is a matter of paperwork. However, blockchain not only captures an unchangeable record of a watch’s history, but also makes that information available to others as needed.

Favre-Leuba’s watches are priced between 2,000 and 8,500 Swiss Francs ($2,010 and $8,543). “The purchase is dear to the customer,” Vazirani says. “Given this, we wanted to avail this opportunity of protecting the customer’s purchase right from the start.”

When a purchase is made, a store clerk removes the warranty card from the watch’s packaging, then scans its built-in NFC 13.56 MHz chip, which is compliant with the ISO 14443 standard and is made by Wisekey. Wise Authentication software prompts the employee to select the watch being sold.

The software stores a record of the watches sold at that location, based on shipments from the manufacturing site to the store, so that the selection of watches includes each individual watch and its serial number. Once a watch has been selected, the process links the WiseAuthentic ID stored and secured in the NFC tag to the specific product being purchased. At the same time, with the tag read at the point of sale, the watch’s authenticity becomes visible to both the retailer and the consumer. The technology company’s WiseAuthentic Platform softwarestores the transaction data for that watch on a blockchain ledger.

“Instead of just recording data into a database,” Moreno says, “we will record it into the blockchain infrastructure,” and share it with Favre-Leuba’s SAP management software. The shopper can then take the watch and warranty card home, after which he or she can access data by reading the NFC tag via an NFC-enabled smartphone. “Through the application,” he explains, “consumers will be able to check the pedigree, confirm authentication and manufacturing information.”

Favre-Leuba’s Reema Vazirani

According to Moreno, the value of blockchain is that it creates a record that lasts long after a sale has been made. Since the watches are often used for decades—and, in some cases, increase in value as vintage products—a history of each watch sold is important to consumers. Without the NFC and blockchain data, Vazirani notes, information is limited. “While we do have some history that we can share,” she states, “it is not as rich as we wish for it to be. This digitization of this purchase information about the watch is a very helpful factor in this process.”

The watch company has already been noticing several benefits from the use of NFC to track sales, launch warranties and confirm authenticity, Vazirani reports. “Our partners, as well as our internal team members, receive complete transparency about the watch,” she says, “right from our warehouse to the final customer sale.”

With the addition of blockchain, Vazirani says, the system does more, such as enabling personalization for watch buyers. Once a consumer takes his or her new watch home, that person can access relevant data about the watch, such as a user manual and service information alerts. He or she can also track the watch’s maintenance history throughout the years.

The system also provides a mechanism to record if a watch is ever lost or stolen. A user could check the warranty card ID and update a watch as missing, and that record would make it traceable if the watch wound up in a seller’s hands. Favre-Leuba expects to continue updating the system as Wisekey makes new tools available.