Metavers, NFT: The luxury industry has gone virtual

“Luxury is at the fore” in the new virtual world of the metaverse and NFT because they “share the same values: rarity, exclusivity, VIP dimension, and high prices,” explains Eric Briones, Director of Luxury Journal.

The metaverse is a parallel world accessible in augmented or virtual reality, described as the future of the internet. NFTs are virtual objects whose value lies in the Certificate of Authenticity that accompanies them and makes them unique. Experts call the group “web3”.

The Kering group, François-Henri Pinault, has created teams entirely dedicated to it in Gucci, Balenciaga and within the parent company. “Instead of being in ‘wait and see’ (waiting to see), which is often the situation of luxury homes, we are in ‘test and learn’ (learning by testing),” the CEO explained during a press conference. .

Bernard Arnault himself declared himself “cautious,” presenting the annual results of his LVMH group, about the metaverse, a “purely hypothetical world”. “Beware the effects of bubbles,” he warned.

Number one in luxury is still very present in this sector. Its flagship brand Louis Vuitton even created its own video game to celebrate its bicentennial, which featured NFTs to win. A few days after Bernard Arnault’s statement, his son Alexander, Executive Vice President of Tiffany, posted a new profile on social networks representing him as CryptoPunk, a group of NFTs.

“If you’re wondering why most luxury brands are becoming virtual, it’s partly because there are deals to be done,” said a note from HSBC. A Morgan Stanley study from November 2021 estimates that NFTs and online gaming could account for 10% of the luxury market in 2030, or 50 billion in revenue.

wild west gold mines

Dolce & Gabbana sold nine NFTs in the form of dresses, suits, tiaras and tiaras in September for 1,885,719 ether (cryptocurrency), or more than 6 million euros. The Italian brand has just announced a new NFT project with “digital, physical and experiential benefits that take its holders on a journey between real life and metaverse”.

Eric Briones says, “Technology passes, fashion passes, but man remains man, with man’s obsession with flaunting his social standing.” Hence, according to him, the first “inhabitants of these metaphysics” (the community of “crypto millionaires”) were drawn to luxury.

It’s also about winning new customers: men (according to HSBC, about 70% of NFT buyers are men, compared to 30% for traditional luxury), younger and more connected.

Luxury brands “have no choice”. “If you’re not in web3, web3 will come to you,” predicts Eric Briones, recalling the Hermès case that was not launched in this virtual world but recently sued a New York artist who had created NFTs in the form of the famous Birkin bag. “It’s the Wild West, there will be a few gold mines, and a lot of lead mines,” he predicts.

François-Henri Pinault analyzes three opportunities in this new world.

This is in order to extend the real-world experience to the virtual world, while linking the NFT to existing physical products.

Those purely virtual products, which “open up completely new areas. Will these be creations related to our professions, our clothes? A shoe? Maybe. But it could be something else.”

Finally, the opportunity relates to “new services to be created,” such as a “lifetime annual stipend on a virtual property.” Today, the brand does not touch anything related to a used resale product. Tomorrow, a contract may be attached to the NFT, so that with each resale, a part will return to the brand. “It creates a completely different economic equation,” Kering’s CEO said.

Source: Agence France-Presse

Eric Briones, Director of Journal du Luxe, explains that “luxury takes center stage” in the new virtual world of the metaverse and NFT because they “share the same values: rarity, exclusivity, VIP remoteness, and high prices”. The universe is accessible in augmented or virtual reality, described in the future…

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