The Future of Luxury: Blockchain, Digital Passports, and Hyper-Personalization

[upbeat music] Welcome to another show of 51 Insights, today with Pedro Lopez-Baimonte.

Pedro, welcome to the show. Hello, Marc, uh, thank you very much for having me. Very excited to, uh, to be part of it. Yeah, likewise. Pedro, I'm excited to have you here today.

Pedro, you're a, a Web3 and technology innovation expert.

You've been in the luxury industry for more than 15 years, uh, including, uh, Richemont, um, and you've been at the forefront of blockchain and Web3 innovation at luxury brands, so I'm super excited to dive deeper today, um, into everything blockchain for luxury brands with you.

First question from my side, again, you've been in the industry for over 15 years. You've been a software architect. If you look back,

and if you look at all that technologies that have come up in the last 10, 15 years when it comes to, uh, consumer engagement, where do you see the biggest opportunities, and is blockchain part of that?

I see the biggest opportunities are in, in my opinion, on, on client relationships.

They're everywhere, but on, on, on client relationships, I see a lot of opportunities for, for efficiency in terms of, uh, of, uh, engaging with the client, uh, in terms of, uh, gathering data in a respectful way while preserving the, the privacy of the client, of, of giving the client more ownership to, uh, to all their activities and, and to getting, um, to getting to know the client, uh, way better.

I think those are the, the areas that I see blockchain as with a lot of opportunities. Then as a foundational technology for

at experience level for all the interactions that the brands and the clients have, which currently goes beyond the, the boutique, which is, is still the center, and I think it, uh, it will continue being at the center.

But now our lives, uh, are becoming more, uh, transversal, more global, and we transcend the, the physical, uh, limitations with, uh, with the digital tools, and, and we are able to operate in the digital realm.

I think, uh, that's, uh, where blockchain will have a, a great, great, uh, impact, and also establishing new business models and new ways to establish the relationship between the clients and the brands, and also between the clients and the clients, which is quite important and, and naturally clients get together sometimes, uh, when, when, when they are fascinated with the product, uh, to interact, to speak, and to trade those products.

Pedro, I mentioned a long time ago you've been a software architect. You've come from the software engineering side. What excited you about blockchain from that perspective? Okay.

I, I have a, an hybrid, uh, profile, uh, so I've, uh, been doing different things, uh, through my life, some of them very deep into business, and a few of them not even technology.

But, uh, yes, I have, uh, also a deep, uh, understanding of, uh, of the technology.

And as such, uh, what excite me the most about blockchain, w- what I think is, is different, uh, from other technologies, is actually seeing blockchain as a vehicle for decentralized relationships.

We are in, um, in, in, in a world and in a society that is fundamentally centralized, uh, uh, and at all levels, right?

Personal, family, professional, governmental, political level, we see centralization everywhere, and it's how our minds have been formatted.

However, there are some examples where we can see that decentralization really bring a lot of benefit and can be a game changer because, uh, it can bring, uh, a lot of efficiency in some cases.

In another cases, it's, it can unlock, you know, certain pain points or in some scenarios where decision-making, for example, is a problem, it can, it can help.

It's, it's helping against censorship, which I think is very important. So I think that that's what blockchain brings, right?

Blockchain has been conceived as a decentralized way to initially, uh, articulate, uh, a currency, a cryptocurrency named Bitcoin, many of us know.

But then it has be- gone beyond that, and now we see blockchain, um, both as, as a way to, to tokenize financial assets, but as well non-financial assets, and in some cases, intangible assets, uh, such as loyalty or customer engagement.

And that brings a lot of efficiency and, and, and it's a game changer. However, in order to get, uh, the benefits out of it, we need to, we need to change the way we are rolling out use cases.

We need to change the way we approach rolling out scenarios, and, and the value proposition needs to be adapted to that decentralization. But, uh, maybe that's a, a conversation for another moment.

For me, that's the value of blockchain, uh, really decentralization, the trust, and the transparency as well- Yeah... as a consequence. Yeah. Yeah. I like that you mentioned that.

We definitely have to speak about that as well, looking at different use cases and approaching Web3 and blockchain differently.

Before we do that, though, I would like to take a step back and just Take the perspective of a non-blockchain, non-Web3 person in, you know, luxury brands.

If you talk to the leadership at the brands you, you work, uh, in your company and you need to tell industry veterans who may not have a digital background or a blockchain background that you're now able to decentralize customer relationships and make everything more efficient, how do you explain that to them, and w- what are some specific examples you will give them to make them understand, "Hey, yeah, this is something that really helps us to run our organization more efficiently"?

Well, that's a, that's a bigger statement, and it's very difficult. It's very difficult to explain because it requires, as I was telling before, a mindset, uh, change, right?

Usually, in companies in general, I'm, I'm not pointing out to anyone in particular, but in companies in general, they are run usually in a top-down approach. In some way or the other, there are some delegation.

There, there is some decentralization, and I would say that, uh, if, if we take one of these examples, for example, they say that when, when you listen to a, to a management from Apple describe how the company is run, they always mention that it's run in very small teams.

They set up small inde- independent teams, uh, that can run independently, that have the autonomy to take decisions and to move ahead.

And of course, there is, uh, regular coordination across teams, but each team has autonomy. So that's quite decentralized, right?

Because at the end of the day, there is, there is, um, a central layer of coordination, but then there are verticals that run on their own, and those verticals have more capacity to, uh, to, uh, to react, to identify.

They have the expertise, uh, and, and they can produce, uh, better results. At least if that's the case, uh, in the case of Apple, they have demonstrated that, uh, that, uh, it works very well.

So if I have to tell a leader, uh, why decentralization is important, I will start by that. The second point I will say is, look, we cannot continue, uh, running our activities in a centralized way.

Blockchain is not a magic wand that you plug. It's not another system like, uh, you know, another tool like Salesforce or SAP. It requires... Actually, it's not a tool.

I think it's, it's, it's a paradigm, and as a paradigm, which we have different expressions of the technology, Ethereum, Solana, and so many other platforms at the moment to, uh, to use.

As, as a paradigm, we need to adapt, uh, to that, uh, to that paradigm. Mm-hmm. So I would say that's the second point. Uh, let's, uh, try to understand the technology and adapt to it. Otherwise, it's not going to work.

And we have a lot of examples now in the luxury fashion retail industry in the past two to two to three years.

We have a lot of examples of, uh, activations that have not, uh, worked or have not-- They have not worked at all either, or they have not produced the, the, the desired, uh, results.

So I, I, I would start by that, but that wouldn't be sufficient. I think in order to, to explain this to leaders, it needs, it requires also a bit of education and, and time.

Uh, in my experience, it's something that, uh, that it doesn't click the first time you look at that. Um, and even if, uh, that's the case for some people, then you need to review it constantly because we tend,

for what I said before, uh, we, our mindset, uh, is very, very centralized oriented. So we tend to go back to that and to use blockchain as another dezen- uh, centralized technology.

And in that case, as I said, it, it doesn't work. So you're, you're speaking about a mind shift. I think you have two dimensions now.

You have, uh, uh, the mind shift of decentralized, decentralization, running an organization in a more decentralized entrepreneurial way, and then you have the technology blockchain who does this- Yeah... by nature.

Is it about both sides for you, or is one stronger than the other? It's, it's both sides. Uh, of course, each one has their own, uh, particularity. So let's say, for example,

that we want to use blockchain for, uh, digital passports, which is a use case that has been, uh, quite, quite, uh, popular in the, in the past years, and that I personally believe is, is one of the biggest, uh, and most relevant, uh, use cases so far, and it will be even more in the future.

So let's say that a specific company wants to, uh, create digital passports, uh, for, for their products, and they want to use it to, uh, to, to do it using blockchain.

And they decide to build, uh, this setup with their own blockchain. It doesn't matter.

As you know, there are different types of blockchain, and we, we, we need to distinguish, or, or we can set up, uh, blockchains with different factors of, uh, being public, private, permissioned, uh, you know.

Regardless that, this company decides to, uh, to build their own blockchain. They issue the digital passport. How is going to...

How is that going to be more relevant that issuing digital passports, uh, with a classical approach, a centralized application, database, uh, system, whatever?

It doesn't because the IDs that are there, the, it will be a minor, uh, advantage. Uh, the IDs that are in the, in the blockchain, especially if it's public, will be recognizable, identifiable.

There will be some level of, uh, transparency, providing that the infrastructure is, uh, truly decentralized.

But anyway, uh, it, it, it doesn't allow by itself automatically for, for, uh, interactions with, uh, with third parties, for example.

In that context, the third parties must, uh, integrate one-to-one with that brand to enable, uh, uh, use cases such as product insurance, reselling, recycling, et cetera. Right?

So there is still, my point being, the benefit that we are gaining with blockchain, uh, there is n- almost nonexistent because the effort to create an ecosystem around that will still be huge.

Whether if, if you consider the other way around, we go to an standard that is widely adopted and, uh, that has an ecosystem of, uh, of, um, service providers in the areas that I just mentioned.

Suddenly the, the brand is plugging their products into an ecosystem that enrich greatly the, the functionality, not only for the clients, providing them incentives to, uh, to use them, but also for the brands to understand more how their products are used and how the clients are interacting with, uh, with the products at minimal cost, right?

Because the, the assumption is that in that scenario, each service provided plugs into an standard, right? So what, what I'm speaking is today we, we work in a standards, uh, let's consider the, the Wi-Fi, right?

Uh, we all have Wi-Fi in our homes. Uh, probably we have the router of the service provider, the device that they provide us, or maybe we purchase some of, uh, some of us we purchase another one.

Whatever the device, our phones are able to connect to their Wi-Fi. And when I work from, from the office or when I work from, from, like, a cafe or from the airport, I'm able to connect to the, to the Wi-Fi, right?

And nor Apple or Samsung or whoever is the manufacturer of the mobile phone had to invest themselves, only themselves in that, in that infrastruc- infrastructure, nor the rest of the players. It has been a common effort.

So that common effort, if we translate it to the, to the, to the, um, to the blockchain as a foundation for what I think is the, the next evolution of internet, the concept is the same.

Uh, I think the opportunity for, for brands and, and what I would end up telling the, the, the decision-makers is this ecosystem is the, the oppor- it's not only transparency, it's not only trust, of course, but what that enable as a consequence is this potential ecosystem of service providers that enrich a lot the, the service.

Now, what is the problem? That usually companies and, and brands, they are a bit hesitant.

They want to keep very tight control of which is the partner that, uh, that, uh, can my products and my clients can interact, uh, with. I think they don't realize of two things.

First, that the clients purchase on many other brands, and sometimes I have the perception [chuckles] that brands, they don't realize, uh, about that.

And second, what, uh, what they don't think also is, um, that, uh, they can-- blockchain also allows to that control. The fact that is blockchain and, and that are standards, it doesn't mean that they are losing control.

They need to give up a bit of control, but I think that sense of control is false.

And if we were a bit technical through a smart contracts, uh, through standards around that, we can, we can implement the measures and the, the, the elements that will allow brands to establish certain level of controls.

For example, if I'm a brand and I want to, um, third party, you know, a-authorize the service, uh, providers to service my products, I could do it through a smart contract.

Um, so when the client requests the service, they can have a list of the authorized service providers, uh, to take their product to, right? Or to resell it, you know?

I think that's, uh, that's, uh, the big opportunity, but brands need to do a, a, a mindset, uh, shifting. And of course, let, let's not put all the responsibility in the brands.

The technology need to evolve, and, uh, we need, uh, I think a bit of maturity before we can reach, uh, that state. Not a lot, but a couple of more years.

So y-you're saying we have on one side an emerging ecosystem, an emerging technology that could set a new standard similar to how we saw with other technologies in the past for a whole ecosystem to emerge that will eventually be interoperable.

At this stage, we're not yet at the point where this is possible. It's still very nascent. Yeah.

And on the other side, it requires a mind sh-shift on the brand side to understand that this is about giving up a certain amount of control, but it unlock, also unlocks, uh, new types of value for, for consumers. Okay.

So, uh, that's super interesting. And you mentioned before that a lot of brands have tried to do this in the last two to three years, and many of those activations didn't work.

Why do you think these activations didn't work? And could you give us examples of activations that you think are a bad use case for blockchain and maybe some that are a very good use case for blockchain? Yes. So let me

first fine-tune a bit, uh, the statement. So when I say they didn't work, uh, I'm, I'm, I'm, I'm optimistic by nature, so I, I see a lot of value in what everyone has been doing, right?

Because it has been a learning process, and, uh, everyone had to learn. So that failure, I think it's a failure depending on how you, uh, you see it. I've certainly, uh, learned, uh, quite, uh, quite a lot.

I think it-- the, the main reason it has been a lack of understanding, and this has been provided especially on blockchain mainly by, by the NFT hype. You know, in, in, in two thousand twenty-one, um,

after, uh, the, the last, uh, 5,000 Days, I think it was called, you know, this NFT that, uh, was sold for an incredible amount of money. Everyone thought that- By, by Beeple, right? Yes, exactly.

I think for s- seventy, eighty million. Yeah. Yeah. Yes. So sorry. I'm, I'm a bit bad with names and sometimes this happen. But, uh- Yeah, same...

everyone thought this was, uh, the next El Dorado, and there were, you know, from those collections that arri- that, that arised being sold, uh, by, by incredibles amount of, uh, of money.

Even there was the belief that brands, uh, were going to, uh, the, the next step for brands was- S- some people even said to ditch the physical products and, and to, uh, focus on, uh, digital ones.

With a bit of perspective, we look at that and, and we smile at, uh, at least, uh, right? But I think it was, it was fair to, uh, to, to go through that, and it was very interesting. And why not?

Sometimes you need to walk the talk to see where that goes, and, and if that goes nowhere, so that's a learning, uh, as well. Uh, y- you went somewhere. That's, uh, that's my point.

Of, uh, brands that, um, that one brand that, uh, did understand versus one brand that didn't, I would put, uh, the, the example of, uh, Porsche and of, uh, IWC.

I think Porsche, uh, with their NFT project that they launched, uh, almost two years ago, they misunderstood their client.

I think they were not able to, to fine-tune the value proposition with the client they were having in, in front of them. I think the NFT was too expensive. I think, uh, the value delivered was too low, and [chuckles]

as, as a friend says, luxury is luxury. Uh, the experience was not luxurious, uh, at all. And in general, the project was, was very good.

I liked the project and, and in full disclosure, uh, Porsche is one of my two favorite brands, so, uh, I think, uh, in general they do incredible work.

And it's just one case amongst a lot of them, you know, a lot of brands. Even NBA Top Shot, Top Shots has waned a bit. Uh, you know, it was a very, very interesting project, I think very well executed.

Even that has been diffusing a bit. But let's compare it with the project, uh, of, uh, IWC Diamond Hand Club.

With Diamond Hand Club, IWC wanted to create a community, I think conceptually very, very similar to, uh, to Porsche. The only difference is that IWC airdropped the token. They didn't ask the client for, for any value.

They didn't put a price. It was for free. So my point here, where what w- the brand understood is that they, they wanted-- selling NFTs was not in their core value proposition.

Their core value proposition are watches, and they understood it, uh, very well, and they used that as a tool to build community. So the point is that they didn't ask the, the, the client for any value.

They just gave that for free. They started to, uh, to, uh, generate value for the client with, uh, with, uh, some, some raffles.

Uh, you know, they were raffling VIP experiences, uh, for Miami Formula 1 Grand Prix, a concert of Hassimer in Geneva, wine-tasting experiences, uh, you know, some parties, some inaugurations all around the world.

All of that for the community. On top of that, the community was able to interact through a specific, uh, and, and dedicated tool only available, uh, for token holders, so a token-gated, uh, experience. So the client was

getting value in exchange of, of nothing, of just being part of, uh, of the community. Only that small detail, I think it made a lot of difference between one project and the other.

So y- y- you're saying giving out value for free instead of charging upfront for something and aligning it also with your brand experience and your brand standard.

If you, if you look back at those last three years where NFTs were really hyped and they were in the center of the discussion of what's possible in Web3 for brands, what are some of the learnings that are come out of you out of that period?

Do you think NFTs still have a, um, legitimacy for those types of applications that you still descr- that you just described, or do you think we no- we need to look at other parts of the blockchain ecosystem?

Well, first, I think NFTs as an speculative, uh, item, uh, they are dead. I think, uh, that's, that's clear for everyone.

Even, I think, uh, Bored Apes, uh, have lost a lot of value, even if the, the collection was, uh, genuine, and, and I like it a lot.

But even that was, you know, the pinnacle of the, of the NFT collection, and, uh, it has, uh, you know, uh, decreased a bit in, in, in value and in, in reach. Uh, still very relevant, though.

But that's, that's a small example. I think NFTs are not a speculative. I think actually the first mistake was use the word NFT. We have been using a word whi- which is a technical term to describe functionality, right?

And, and I think that's, that's a mistake. Uh, what the, the-- What we want as users is what can I do with that? What is it?

Uh, we, we don't, um, um, we don't call paintings, for example, uh, we don't call, we don't call them fabric and wood because of the frame, right? We call them paintings, right?

They are-- Most of the cases it's, it's a piece of, uh, fabric used as the canvas, sometimes it's metal, sometimes it's, uh, it's, uh, wood, you know, but you, you get my point.

I think the first mistake has been using a techni- technical term to name functionality. I think we need to ditch that, and we need to call things as what they are. So a digital passport, uh, is a digital passport.

Club membership is a club membership. Uh, a loyalty membership program is a loyalty membership program, and then we can find different, uh, names. And collectibles are collectibles, right? So let's call them by that.

The second point is that NFTs are a tool, right?

And in, in this example and comparison between Porsche and, and IWC, what I personally extract from that example is that brands need to stay true to their values, and they need to use technology as a tool to deliver those values, but not change their values.

When they change their values, and there are experts, uh, around that will tell you the, the same, experts in luxury specifically, not, not in technology, they will tell you the same. So the NFTs are a tool, and, uh-

It's a tool that can be used to articulate scarcity, for example, to articulate, uh, uniqueness, hyper-personalization, to increase engagement with the client, uh, by delivering, as I was saying, a, a loyalty program, et cetera, et cetera.

But they are a tool. You know, the, the different technologies that we, we work with, uh, today, blockchain, NFTs, smart contracts, spatial computing, AR, the metaverse, gener- gen AI, those are all tools.

As a client of, uh, a luxury or a, or a fashion brand or, or a retail, what I'm interested is in the product, in, in the core values of the brand, and the tools are just a new way to deliver tho- uh, tho- those values and, and maybe to extend the experience.

Yeah. In, in a convers- conversation we had previously, I also remember that you mentioned, uh, those tools need to be very tightly aligned with what the brand stands for, and not all brands are suitable for all tools.

You have, you have luxury brands that may be too luxury for a IWC membership club. Yeah. IWC executed it, right? So you need to- Exactly... uh, uh, align it very tightly with your brand as well.

Absolutely, because for some brands, a club membership won't make any sense, right?

If, if you take really high, um, high e- high-end luxury brands, I think the value is different, the client is different, and, and the relationship between both of, uh, them is different, uh, because it's m-

way more personalized. The more you go towards what is called accessible luxury or, or aspirational premium mass market, the relationship change. So the...

Maybe you're using the same tool, but you cannot use it in the same way. You need to adapt the technology to the brand and to the brand context, the type of client, and what they want.

And another factor which I think is important, so there, there are different factors. For me, the other two very important are, uh, the, the cultural mindset.

You don't deal exactly in the same way with the client, uh, which is based in, uh, in Europe, with a client which is based in US or Middle East or Asia.

We all have different, uh, different, uh, cultural triggers that, uh, are in relationships with our emotio- our emotions. At the end, the, the, the purchasing experience is very emotional.

And the, the relationship we have with the brands is very emotional. So, so the cultural factor, it's very, very important. Yeah.

Um, so we talked a lot about user empowerment in the context of enhancing the customer experience. You also mentioned at the beginning of our conversation about decentralization. You mentioned personalization.

As a leader of a luxury brand, how do I need to think about those terms, decentralization, personalization, customer empowerment, in the context of blockchain? Wow, that's a, [chuckles] that's a good one.

I think decentralization, m- uh, I, I go back to what I said before. Decentralization is being part of an ecosystem. But at the end of...

At, at, at the same time, being able to, uh, maintain your own identity and, and have the capacity to stand out. I usually say that the technology mimics the, the, the, the digital technology mimics the physical world.

Because-- And I think it's because our needs as human beings have not changed. If you think about the Maslow pyrami- pyramid,

our basic needs centuries, uh, centuries, uh, after and millennials after, they are basically the same. They are basically unchanged, right?

And once we have our basic need covers, the next step in the pyramid is mostly the same, and so on and so forth. And I will put you an example. We need to communicate between ourselves, right?

So if we trace a rough timeline for communication, one-to-one and one-to-many, let's say like that, we had the telegraph, we had the, the phone, we have letters, uh, we had at some point, uh, emails, video calls, Twitter, WhatsApp.

You put all that together in a timeline, all of them different technologies, the core need is still the same. I need to communicate with, uh, with you, Mark, and, uh, you need to communicate with me.

We are doing that in, at this very moment with, with a technology that was not available maybe, uh, twenty years ago, right? But, uh, that, uh-- Or it was available in a more rudimen- rudi- rudimentary way.

So when we speak about, uh, decentralization and, uh, hyper-personalization, I think it's the same. The, the brands need to stand out in that context. Decentralization is ecosystem. For me, it's transparency and trust.

But for brands specifically, it's ecosystem that translates into, into an ecosystem, that I can plug myself into an ecosystem of, uh, third parties and services and, and that ecosystem will allow clients, uh, to interact with another clients and clients interact with another brands, of course, and, and, and other services, service providers and, and so on and so forth.

And the brand that, uh, is able to entertain more their clients, uh, will be more successful. How? For example, with hyper-personalization. So hyper-personalization, what does it mean?

It means something different for, for each brand. It can be something, you know, a, a shirt, for example, tailored made with the best cotton, with the best craftsmanship, or it can be a T-shirt with, uh, my name on it.

I don't know. [chuckles] It's-- Or, or you- My watch with different straps, uh, or with, uh, my initials, uh, you know, in the dial, it might means many different things for, uh, for each, uh, brand.

But with blockchain, we can create a testimony of that because actually, the, how, how is, how are brands relating with clients? How is the relationship between the client established? It's through the products.

The brand establish the relationship through the product.

Hyper-personalization of the product, but at the end of the day, the product needs to be there, it needs to be, uh, the, the, the true enabler of the relationship because that's the end, right?

It's not the mean, it's the end, and the technology's the mean.

So with that hyper-personalization, with the concept of, uh, hyper-personalization, we can think about, for example, a process of customize a product that is, uh, set on blockchain, and, uh, then this product, uh, is finally confirmed as a digital passport in the blockchain, and then this product, uh, goes through the lifetime through a series of changes.

If we take the watch, I can change, uh, the strap for a different color or the dial or whatever, and all of this can be recorded on blockchain, right?

Um, so this, this is somehow the, the, the way I see this decentralization comes all these relationships.

If we need to establish them through centralized technology, it's so expensive that we will never do it as, as an ecosystem, right? As an industry. It's so expensive. You cannot think of every brand.

I, I, I did a research a few months ago. I think the number of brands is so big, and the cost for each brand to implementing these kind of applications is so big that it needs to, it needs to low down, lower down.

For me, that's the way I see decentralization and blockchain, and being able to provide these services of hyper-personalization and deeper relationship with, uh, with the client.

Hyper-personalization, it can be also in the relationship with the client pre- and post- uh, purchase with, uh, loyalty programs or client engagement activations.

Uh, for example, I, I sell you a product, uh, and then I organize an event for, uh, all my clients that have a specific product or that has a collection of three different products of a specific kind.

And, uh, with, uh, the digital passport, you can prove very easily that, uh, you are. As a brand, I don't need to establish lists and so on and so forth.

I might be interested to do it in some cases, but, um, I have the choice of not to do it and also deliver a smooth experience, uh, on the client for that specific event, right?

Uh, so there are so many possibilities that, uh, that, uh, it's very exciting, but we need to embrace this as, as an industry.

The industry need to embrace this decentralized mindset, and, and centralized applications, they are not going to, uh, to work, in my view. So y- you mentioned it needs a change in mindset.

It needs also different terminology. Instead of talking about NFTs, we just- Yeah... talk about the applications themselves. It probably needs more time to develop the whole ecosystem. Yeah.

Is there anything else that you think is missing right now that will enable such a future that you just spoke about? Adoption.

But adoption will come with, uh, better technology, so it's a kind of, uh, it's a kind of loop.

The kind of cycle that, uh, the technology industry and the luxury industry or luxury retail need to work, work together and, uh, evolve the, the current, uh, the current setup.

I think we also need to pay attention to the newer generations.

I, I hear a lot speaking about, uh, about, uh, Gen Z and Gen Alpha, and I don't think [laughs] you know, maybe in a generation, it sometimes is, uh, difficult to, uh, to understand, you know, the motivations. Uh,

for example, one of the points that a couple of years ago with the metaverse, uh, hype was, uh, you know, e- everything is going to be gaming. Everything is going to be about gaming, and

we are going to be gaming all day long. But it's not going to be like that. But it's true that these new generations have grown up. They, they are game natives.

I, I, I'm a gamer as well, but, uh, I don't game now, uh, as much as I used to. And when I started gaming, which when I was a, a teenager, games were mostly not connected.

The concept of online gaming, it was very, very slim, and, uh, it was not like, uh, like it is today. For example, my daughter, she has one very good friend who she has never met.

That, that's the whole paradigm, uh, change in terms of mindset, right? And in terms of what the digital platforms, uh, have, uh, have brought.

So we need to think, uh, that the new generations, what, what is working for them, it might not work for us, and that's also a challenge because I was telling you before, you know, that brands need to take into account different parameters, uh, you know, their own context, the cultural mindset, also the generational mindset.

You start adding up the combinations, and it's, it's a nightmare because if, if you add on top of that hyper-personalization, I mean, how are you going to achieve that?

Well, I think with blockchain we can achieve that, and not only that, blockchain, I, I differentiate also between blockchain and Web3.

I think Web is this new internet and, uh, the way we are going to interact with that is going to be completely different. But completely different, but some things we have already imagined. So I put you an example.

I think in, in the near future, we are going to be shopping-- We, we are going to be doing what they call in-platform shopping. Today, we shop through e-commerce systems.

In my opinion, most of e-commerce systems are glorified catalogs, and especially they don't differentiate.

You go to the, to the e-commerce of the most prestigiu- prestigious, uh, luxury brand, and essentially it offer the same capabilities than any mass market brand, uh, e-commerce. Sometimes even less.

Maybe with a dif- of course, branded different and so on, but the capabilities are mostly the, the same. There's no differentiation. So how are we going to do that?

I think it's going to be through platforms and through metaverse and, and so on.

Going back to the platform, uh, shopping, how many times have any one of us look something, some garment, for example, in a movie or in a TV show or whatever?

Wow, I would like to, uh, to, uh, shop that or, or from, from which brand would that be, right? Mm-hmm. And I th- I think that's going to happen.

I think at some point we are going to be able to, uh, to offer this functionality clients through platform interaction. And when I say platform, there is no TV anymore.

We have, uh, YouTube, you have-- we have streaming platforms, we have a lot of different social platforms. So why not to enable shopping from, from those platforms?

As a client, I can check the identity of the brand with blockchain, for example. Blockchain could enable that.

The same way as, uh, today we put our credit cards in a, in an e-commerce site because we see the green lock on top of the browser, we can use blockchain to provide these safe capabilities to identify the identity of a brand, you know, behind whatever setup, uh, are being presented in the digital application.

If, if, if I'm in a Netflix show and, and I purchase, I could get immediately, uh, after the purchase, the digital passport and start interact with it without having received the still the, the physical product.

Then the brand can enable many interesting ways. So do I want to get my product delivered to me or do I want to pick up from the, from the boutique?

Maybe another kind of experience on that regard, for example, car brands, uh, they, they orchestrate especially the, the, the luxury ones, the sports ones, they orchestrate very well the delivery of the products, right?

So, so that could be something to look at, and that can be translated to another brands. And in that context of the

m- in-platform purchase, the, the Netflix show purchase orchestrated also with blockchain, then I can maybe tell the brand, "Please, uh, buy back my product because I'm going to, uh, you know, I, I don't have, uh, use for it anymore."

And the brands will put the product in, uh, in, um, in some marketplace, some pre-loved marketplace. I think Jen said when we speak about sustainability at different, uh, mentalities, they are going to ask for that.

I wouldn't ask a brand to, to buy back my product, but they will do.

So my point being, there are so many ways, new ways to extend the brand experience, but to extend it keeping the brand core to their values that, uh, that, um, and these are the ways offered by the technology that I think the future is super exciting and I see blockchain as a foundational, uh, piece of, uh, of this future.

Yeah. When I listen to you, Pedro, it really feels like the future is going to be very, very exciting.

You're a true v-visionary, visionary when it comes to, uh, those technologies and how you can apply them in the future. We're almost at the end of the show.

Before we end this, I would like to ask, um, another question on something very important as well, digital product passports. I know- Yeah...

you, you know a lot about digital product passports, and I would like to have your opinion on that.

Where are we at with digital product passports, and how much of the potential have we unfolded already of what's possible? I think, uh, we are not at the beginning, but we are not far from it.

I think we have not-- we need to unlock yet, uh, most of the potential. And the things that I've been telling you and describing in the past, uh, minutes during our conversation illustrate that.

I think-- And most of the things that I've described, technically they are already possible, most of it.

What, what is missing is actually, in my opinion, true interoperability in order to put that, that efficiency of the ecosystem and that, uh, critical mass of the ecosystem really to work.

But, uh, I think digital passports, they are the identity of, of the products, right? When, when we purchase a product, whether if it's a car or any other product, they are unique. They are unique items.

Maybe they are duplicates even for the cheaper product. They are unique, right? Digital passports, of course, will be articulated different depend-- differently depending on the product.

Uh, I think there will be more focused on, uh, sustainability and some, uh, circularity service for, uh, low-value products. You know, imagine a $20 T-shirt.

Do I need to have, uh, uh, a serial number for that, uh, for purposes of reselling? Maybe, but I think that will be more likely, uh, uh, a luxury watch of a few thousand, uh, euros, right?

Because it's, it's more unique and the lifespan will be longer, right? On the T-shirt, we will be more focused on, uh, recycling it, repurposing it or, or end of life. So but long story short, very, very important.

I think we have identity for, for humans. I think we can agree to that, and we will have identity for products in order to articulate different things depending on the, on the product, uh, that we are dealing with.

And where do you see the biggest potential on, on the brand side besides more efficiency and sustainability- The more- Maybe data... potential? Of course. Yes. Data gathering, that's, that's a huge, uh, point.

And I missed during the conversation, but data gathering is a, is a huge point. But data gathering done in, in, in a good way. It is not relevant, in my opinion, for brands to know that you are Marc Baumann.

Brand level, when you aggregate data and you want to understand consumer behavior, our names, yours and mine, they, they don't care, they don't matter.

They matter-- What matters is how do we behave, how do we use the products, how long we keep them. If we resell them, where do we do it? If we travel with them or not, these kind of things are what, what matters.

So with blockchain, we can enable that to clients to share that information, first, if they want, and if they don't want, they can opt out and, and remove the consent.

I think we should be fair with, uh, with them and do that, and, uh, we can keep privacy. And then it's on the brands to incentivize better than clients to share the information, right?

So I think that would be my, uh, my point to that. Mm-hmm. But data gathering, super important with really more high quality data and less cost of, uh, data acquisition. Yeah.

And a, a good example for that, by the way, is last week we had Antonio Carrero on the show. He was the CTO and chief digital officer at Breitling- Yeah...

and he, he brought up the example of what Breitling did with that secondary marketplace, um, where they connect the watches to, to NFTs, and you said data as long as it shows user behavior, and some data they could read out is, for example, what, what models do their clients like, what colors do they like, what's the reselling behavior- Absolutely...

things like that. Yeah, absolutely. Absolutely, Fabian. And, uh, I think Antonio, uh, explains it very well.

Uh, we know each other, and, uh, what Breitling did, uh, is, is a clear example of how to move ahead and, and where to go. Yeah. And how to use the technology. Yeah. All right. Pedro, we're almost at the end of the show.

Uh, we usually do a very quick lightning round, uh, with every guest. It's a very short question, very brief answer, uh, usually one word. Let's go. Yeah, let's go.

First one, which Web3 use case excites you most for luxury? Um, yeah, I'm going to be probably a bit boring with that, but digital passports. I think the potential is still not unleashed, will be key in the next years.

Digital passport. What's the biggest misconception brands have about blockchain? That, uh, blockchain is just another piece of technology like, uh, SAP, Salesforce, just to mention a few, a, a, a few brands.

It's, it's totally different. Uh, what's one Web3 trend that's overhyped right now?

I think interoperability, uh, if, if that can be a trend, but everyone is speaking about interoperability and in my opinion, there's no interoperability in general terms at the moment. NFTs, overrated or underhyped?

I would say bad- bad named. They are very, very, uh, they, they are a game changer, but, uh, maybe not in the way that we have been using them so far.

And last one, if you could say anything to leaders of luxury brands, what would it be? Embrace decentralization. That's a, a great ending. Pedro, thanks a lot for coming to the show.

It was a pleasure to discuss that with you. It was extremely interesting. Thanks for your time. Where can people find out more about you?

Well, I'm available in, uh, LinkedIn, especially where I publish, uh, ideas, uh, and, and articles, uh, sometimes, and I like to engage in conversation.

So, uh, yeah, I would say that's, that's the place for engaging with, uh- Yeah, that's great. All right, that's the end. Pedro, thanks for coming.

It's great to have visionaries like you in the industry, and all the best. Thanks a lot, Marc. Always a pleasure, and thanks again for having me here.

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