Unlocking the future: How luxury brands are leading the web3 revolution
Relevance’s Nicole Booth and chief executive Rumble Romagnoli explore how luxury brands and web3 intersect as high-end brands embrace innovation and collaboration in the digital age.
Are luxury brands at the forefront of the web3 revolution? / Shubham's Web3 via Unsplash
In the ever-evolving landscape of the internet, a transformative tide is sweeping through, and luxury brands are at the helm of this revolution.
The result is a surge of interest from some of the world's most prestigious luxury brands in web3 technologies. But what exactly is web3, and why have these high-end labels enthusiastically embraced it?
Understanding web3 technology
Web3 represents a fundamental shift in the digital landscape. At its core, web3 aims to break free from the control of centralized networks such as Meta, Google, or Amazon and transition to a decentralized version of the internet where individuals collectively govern and contribute.
Web3 is built upon principles of interoperability, openness, and collaboration, using innovative tools like the blockchain, cryptocurrencies, and non-fungible tokens (NFTs) to transfer ownership and authority to users.
From a marketing perspective, in this new era, users become stakeholders and receive some of the value they help create. For luxury brands, web3 means creating new ways to engage with customers and share their brand values through collaboration and incentives.
Advertisement
Why are luxury brands embracing web3?
For forward-thinking luxury brands, web3 opens doors to a wealth of new opportunities. Porsche, Tiffany’s, Balmain, and Gucci have all ventured into the web3 space, but why are they taking these bold steps into unfamiliar territory?
1. Appealing to future generations
By 2025, gen Z and millennials are expected to constitute 50% of the luxury market. Capturing the attention of these younger demographics is crucial for luxury brands, given their potential for substantial future income.
These digital-native generations seek modern, online experiences, and web3 technology provides a unique entry point for luxury brands aiming to maintain exclusivity while fostering a sense of community.
2. Improved traceability
Blockchain technology introduces an innovative traceability solution, which allows luxury fashion brands to protect their intellectual property on a large scale.
The Aura Blockchain Consortium, a collaborative effort by Louis Vuitton Moet Hennessy (LMVH), Prada Group, and Cartier, leverages blockchain to verify the authenticity of luxury goods. Each luxury item, whether a watch or a handbag, can be assigned a unique code that customers can verify using a mobile app.
Luxury brands recognize that web3 can safeguard their intellectual property and offer tangible benefits for entering the lucrative resell market.
Advertisement
3. Augmented creativity
The global metaverse market is projected to surge from US$47.48 billion in 2022 to an astounding $678.8 billion by 2030.
This new digital environment is offering exciting opportunities for innovation and creativity, especially in the fashion world. This new virtual realm amplifies existing experiences and provides an infinite canvas for showcasing boundless creativity. Moreover, the metaverse has given rise to the concept of ‘phygital’ goods, seamlessly blending the physical and digital worlds to offer consumers a unique fusion of tangible and virtual experiences. Luxury brands are astutely seizing this chance to establish themselves as pioneers in delivering phygital experiences to their customers.
4. Powering ground-breaking collaborations
Web3 technology also enables greater collaboration among luxury brands by providing new ways to engage with customers, build communities, and create unique experiences.
We are seeing luxury brands using NFTs, digital assets stored on a blockchain, to partner with other brands, artists, and influencers to create limited-edition products, experiences, and access to exclusive communities.
Recent examples include Prada’s NFT drop offering the chance to attend the Menswear Fall/Winter 2023 in Milan, Tiffany’s custom-made jewelry delivery to holders of the CryptoPunks NFT collection, and the Balmain and Mattel collab that created a unique Barbie in the metaverse.
Suggested newsletters for you
Louis Vuitton’s €39,000 NFT
In the world of luxury, LVMH stands out as a powerhouse with an unwavering commitment to innovation and exceptional experiences. The brand has stated that it sees itself playing in the future of web3 in key areas like traceability, immersive experiences, digital twins, and cryptocurrency payments.
In 2023, LVMH released a new NFT series called VIA Treasure Trunks, with each NFT priced at €39,000. This is a very small and exclusive edition of only a few hundred NFTs that will be associated with a physical product and serve as a gateway for collectors, granting them access to various immersive experiences and limited drops. The first drop allowed exclusive holders of the Treasure Trunk NFT to buy the Orange Speedy 40 VIA, designed by Pharell Williams. Only four alternative colors exist, and they were sold within 48 hours.
Web3 is the latest evolution of the internet, harnessing blockchain technology, NFTs, and cryptocurrencies to redefine how consumers interact with digital content and assets.
Luxury brands have embraced this transformative technology, enabling them to craft unique and innovative experiences for their customers and position themselves for the customers of tomorrow. In this new era, luxury and web3 intersect, paving the way for a future where innovation and collaboration reign supreme.
Content by The Drum Network member:
Relevance
Relevance is a strategic and creative digital marketing agency specialising in profiling and targeting Ultra-High-Net-Worth-Individuals for the world's most exclusive...
Find out more