Luxury, generally known for its desirability, its exclusivity, its traditional manufacturing, its rarity, is one of the most promising sectors of Web3.0 and more precisely of the advent of NFTs.
These digital objects have come to create new experiences at the service of luxury brands to attract a new generation, innovate, reinvent interactions, at the risk of “breaking” the traditional codes of luxury homes. Faced with the numerous opportunities that present themselves in the Web3.0 ecosystem, how can luxury brands reinvent traditional codes, while continuing to share authentic values? How to differentiate yourself from other brands and not fall into a mainstream approach with no added value?
NFT: evident popularity in the service of new experiences.
While some luxury homes still hesitate, many of them have already taken the plunge. NFT collections, games, metaverse, virtual reality … There is no shortage of use cases. What is interesting to observe, beyond the buzz created by the movement after the popular launches of Louis the Game, the game of Louis Vuitton, Sharky B the Shark from Burberry or even Guerlain and its NFT falls in favor of biodiversity are the strategies adopted by every luxury home. Remember that NFTs are unique digital items that pave the way for digital ownership whose value lies in a certificate of authenticity and a multitude of unique benefits.
These strategies are all promising axes for a brand and we can already observe three strategic corners managed by luxury houses. The common denominator is the notion of permitted digital ownership.
First of all, let’s look at the NFTs that allow you to enhance the know-how of a brand, both by publishing unique digital assets that represent each detailed part as Lamborghini did, and by offering the traceability of physical products as for example Breitling does with Arianee.
NFTs also serve the inherent characteristics of luxury. Exclusivity, rarity, limited edition, neat artistic appearance. Properties that we find today in most NFT projects that use the characteristic of exclusivity and belonging to a small community of privileged people to justify the often high prices of digital assets offered for sale on the market. In this context, the challenge for the world of luxury is to be able to do well and transfer the appeal of its products from the physical to the virtual world. In other words, how can a Gucci or a Louis Vuitton not be overshadowed by the new icons of the NFT world who have become the Cryptopunks and the Bored Ape Yacht Club who have become all the stars on the planet?
This time the luxury houses have decided to do test & learning and not wait any longer to observe other sectors. For good reason, more and more brands are also undertaking a deeper transformation of their organization by betting on Web3.0 and creating new dedicated business units, as is the case with Balenciaga or Gucci for example. But beyond the bubble, how to make this transition and manage to cultivate the two worlds to satisfy a diverse audience in an ecosystem that has its own codes. A real challenge for brands who must find the balance between their historical identity and the discourse they will implement in the metaverse to win new audiences and embark on their existing community on an adventure at the forefront of innovation.
Between innovation and authenticity, luxury brands need to find the right balance to position themselves sustainably in this ecosystem.
Luxury houses have understood this very well: this time the move to Web3 must be taken, if possible well before other sectors, to seize the opportunities offered by this new ecosystem. However, it is not enough to launch and issue a first NFT drop, such a strategy is reflected and built in connection with its overall strategy. Because taking advantage of digital and opening the Pandora’s box of the Web3 does not mean reproducing in the digital world what exists in the real world, but creating new exclusive experiences for an increasingly selective clientele waiting for sensations.
Even though many luxury players have been pioneers, there is still a long way to go to invent real experiences and take full advantage of all that Web3 has to offer, not just on the surface but also in the processes and everything that surrounds it. and marketing, as well as business models and the supply chain. To do this, the players who will be able to differentiate themselves will be those who will establish long-term strategies, both to give themselves time to test and improve their experiences, but also to gradually develop according to the evolution of the market which is still very young. Finally, the Web3 and above all the NFTs are not an end but a means to reach new challenges and a new population by retaining and making its regular customers dream.
In short, the traditional codes of luxury find their culmination in the metaverse, which brings surreal experiences to the fore, and the power to invent and offer a true digital experience marked by the codes of luxury. Ultimately, the Web3, through the metaverses in particular, is an opportunity for the luxury industry to invent or reinvent industry codes in the digital world. A challenge that has not always been successful in the so-called Web 2.0 we know today. Luxury brands that offer “luxury” digital experiences will gain a significant competitive advantage as this new ecosystem grows.
The future of luxury homes will thus be played out in their ability to go around the Web3 by adopting the specific codes of this ecosystem, integrating the history and identity of their brand. And, this, to maintain an authentic and unique positioning at the service of a fluid and decidedly innovative customer experience.
Karen Jouve is a Web3 expert, CEO and co-founder of Doors3.