Luxury at the forefront: when NFTs take over the industry
As luxury brands explore the future of the fashion industry, new opportunities are emerging for creativity, identity and innovation. Prada, Diesel, Dolce & Gabbana, Tiffany & Co., as well as watch brands such as Hublot, have intensified their communication by conquering the NFT market, this virtual parallel space with strong creative potential. Digital tokens have many advantages for the sector in question. By being stored on the blockchain, they are unique, irreplaceable, non-copyable and traceable, thus offering great security and reliability. Additionally, they allow for a highly personalized experience while being associated with rarity and discretion, which can be very attractive to consumers. The industry is not immune to upheavals in society and markets. However, it is worth asking whether this sector will be able to seize the opportunities offered by innovations and integrate them into its activities?
NFT initiatives seek to stand out in a saturated market by capitalizing on both physical and digital advantages. According to a study published by the consulting firm McKinsey, the metaverse market could reach a value of 5,000 billion dollars by 2030. It is certain that the luxury industry intends to display its avant-garde vision in the Web 3.0 universe.
Authentication is one of the most popular uses of NFTs in the luxury industry. Tokens are issued simultaneously with a physical object, providing a tamper-proof digital certificate of authenticity. Breitling, the watchmaker, recently partnered with Arianne to allow consumers to get a digital passport for their watches by scanning the QR code on the warranty card. As for the Swiss watch brand Hublot, it collaborated with the artist Takashi Murakami to create a unique watch adorned with his famous little flowers. To reinforce the authenticity of this product, Hublot has used NFT technology to offer a digital authenticity contract on the blockchain, called Hublot e-Warranty. Knowing that certification is one of the biggest challenges for luxury houses, NFTs are a promising tool to address this issue.
Louis Vuitton launched in August 2021 "Louis, The Game", a video game that integrates 30 NFTs. By expanding into the world of video games, the brand seeks to broaden its base of potential customers. Other big houses unveil their collections in the form of video games or objects to dress up famous video game characters. Valentino and Jacquemus have developed a presence on the Nintendo Animal Crossing game by launching virtual clothing collections. Thus, this offers large Houses the possibility of reaching a diversified audience.
Like a physical object, virtual tokens allow their owner to claim ownership in order to join a community. This allows the Maisons to create a direct link with the consumer and increase the feeling of “collectability”, and therefore to engage more with customers. Prada's eighth NFT time capsule gave holders the experience of attending the Prada Menswear FW2023 show in Milan on January 15th. On the side of Tiffany & Co., the brand found itself in the spotlight for having sold the 250 "NFTiffs" offered to CryptoPunks holders at a high price of 30 ETH (about 50,000 USD), which generated a number total business of 12.5 million USD. In the long term, the use of these new technologies allows luxury Houses to also reach new sources of income.
By exploring the possibilities offered by NFTs, major luxury brands seek to differentiate themselves in a saturated market. The industry is taking into account technological innovations to adapt to the evolution of markets and its consumers. However, to be successful, a thorough strategy is required. Brands can't just appear innovative and digitally driven without understanding technology. Indeed, if the strategy is not well thought out, it can lead to a digital disaster. Once all the biggest market players have mastered Web 3.0, the most reluctant will understand the issues and won't be able to resist adopting it any longer.
