Luxury, generally known for its desires, exclusivity, tradition-making, and rarity, is one of the most promising segments of Web3.0 and more specifically in the emergence of NFTs.
These digital things have come to create new experiences at the service of luxury brands to attract a new generation, innovate, and reinvent interactions, while risking “breaking” the traditional rules of luxury homes. Faced with the many opportunities emerging in the Web3.0 ecosystem, how can luxury brands reinvent traditional codes, while still sharing authentic values? How do you differentiate yourself from other brands and not fall into a mainstream approach without added value?
NFTs: apparent popularity in the service of new experiences.
If some luxury homes are still hesitant, many have already taken the initiative. NFT collections, games, metaverse, virtual reality… There is no shortage of use cases. Interesting to note, beyond the hype the movement has made since the popular launch of Louis the Game, Louis Vuitton, Sharky B, Shark of Burberry or even Guerlain and NFT dropping in favor of biodiversity are the strategies adopted by every luxury home. Remember that NFTs are unique digital objects that open the way to digital ownership whose value lies in the Certificate of Authenticity and many exclusive benefits.
These strategies are all promising axes for the brand and we can already note three strategic angles that luxury homes run. The common denominator is the concept of permissible digital ownership.
We first note the NFTs that make it possible to enhance the technical know-how of the brand, either by publishing unique digital assets that represent each detailed part as Lamborghini has done, or by offering the ability to trace physical products as Breitling does for example with Arianee.
NFTs also serve the intrinsic characteristics of wellbeing. Exclusivity, rarity, limited edition, elegant artistic side. Characteristics that we find today in most NFT projects that use exclusivity and belonging to a small community of privileged people to justify the often high prices of digital assets for sale in the market. In this context, the challenge for the world of luxury is to succeed in doing well and to transfer the desire for their products from the physical world to the virtual one. In other words, how could Gucci or Louis Vuitton not outdone the new icons of the NFT world that became Cryptopunks and Bored Ape Yacht Club that became all-stars of the planet?
This time, luxury homes decided to take the test and learn and no longer wait while observing other sectors. For good reason, more and more brands are transforming their organization deeper by betting on Web3.0 and creating new custom business units, this is the case of Balenciaga or Gucci for example. But beyond the bubble is how this transformation and success in growing both worlds are played to satisfy a diverse audience in an ecosystem that has its own icons. A real challenge for brands that must find the balance between their historical identity and the discourse they will apply in the metaverse to conquer new audiences and embark their current community on an adventure at the forefront of “innovation”.
Between innovation and originality, luxury brands must find the right balance to position themselves sustainably in this ecosystem.
Luxury homes have understood this well: this time, we must turn to Web3, if possible long before other sectors, in order to seize the opportunities offered by this new ecosystem. However, it is not enough to launch and release the first projection of NFT, this strategy is reflected and built in relation to its overall strategy. Because taking advantage of digital and opening Pandora’s Web Box 3 doesn’t mean reproducing what’s in the real world in the digital world, it means creating new exclusive experiences for a more selective clientele that awaits sensations.
Even if many luxury players are pioneers, there is still a long way to go to create authentic experiences and take full advantage of all that Web3 has to offer, not only on the surface but also in the operations and everything that surrounds them. Customer experience and marketing, as well as business and supply chain models. To do this, the players who will be able to differentiate themselves are those who will develop long-term strategies, to give themselves time to test and improve their experiences, but also to gradually develop in accordance with the development of the still very small market. Finally, Web3 and above all NFTs are not an end but a means to reach new challenges and new residents while building loyalty and making their regular customers dream.
In short, traditional codes of luxury find their apex in the metaverse, which brings surreal experiences to the fore, the ability to innovate and deliver a truly digital luxury coded experience. Ultimately, Web3, through metaverses in particular, is an opportunity for the luxury industry to invent or reinvent sector codes in the digital world. A challenge that hasn’t always worked out in the so-called Web 2.0 we know today. Luxury industrial brands that can deliver “luxury” digital experiences will gain a significant competitive advantage as this new ecosystem grows.
The future of luxury homes will therefore be embodied in its ability to take on the role of Web3 by adopting the specific codes of this ecosystem, while integrating the history and identity of its brand. And this, in order to firmly maintain an authentic and unique position in the service of a seamless and innovative customer experience.
Karen Goff is Web3 Expert, CEO and Co-Founder of Doors3.