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Luxury goods enter the world of the Metaverse

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The luxury sector is investing in the new virtual world, which represents a market where its products gain added value, with various companies such as Gucci, Burberry entering NFT technologies and the metaverse, a promising field that is seen as the future from Internet.
“The luxury goods sector is at the forefront of the new Metaverse and NFT virtual worlds because they share the same values ​​of rarity, exclusivity, opulence and exorbitant prices,” explains Eric Briones, director of Journal du Luxe.

Metaverse constitutes what looks like a parallel world described in the future of the Internet and can be accessed with virtual and augmented reality technologies.

As for NFTs, they are virtual products whose value lies in a certificate that proves their authenticity and makes them unique. Experts call both worlds “Web 3.0.”

Owned by François-Henri Pinault, Kering has created collections entirely dedicated to Gucci, Balenciaga and the parent company itself.

“Instead of having a wait-and-see mentality, which is often the attitude of luxury fashion houses, we are in a test-and-learn phase,” the group’s chief executive said during a news conference.

While announcing the annual results of his LVMH group, Bernard Arnault expressed caution about metaverses, saying that it is a “totally virtual world. We have to be careful with fake bubbles.”

However, the world’s number one house immerses itself in luxury in the virtual world, and its flagship brand, Louis Vuitton, created a special bicentennial video game that featured NFT products in the form of prizes for participants.

A few days after Arnault’s remarks, his son Alexander, executive vice president of Tiffany’s, posted a new photo on social media in which he appears as a character from “Crypto Bank,” the “NFT” product group.

“If you are wondering why most luxury brands are immersed in the virtual world, part of it has to do with the offers available,” said a note issued by HSBC.

A Morgan Stanley study in November 2021 indicated that NFT products and virtual games could represent 10% of the luxury market in 2030, equivalent to $50 billion in revenue.

In September, Dolce & Gabbana sold 9 NFT products in the form of dresses, suits, and tiaras for 1,885,719 crypto ethers, equal to more than $6.6 million.

The Italian brand announced a while ago a project that includes “NFT” products that include “digital, physical and experiential features that take their owners on a journey between real life and the metaverse.”

“Technology and fashion disappear, but people are still human, with humans obsessed with flaunting their social status,” says Eric Briones, which explains the attraction of the first “residents of the metaverse,” the community of “crypto-millionaires.” ” for luxury products.

Brands are also turning to Web 3.0 to win over new, younger, Internet-heavy customers. HSBC indicates that around 70% of buyers of NFT products are men, compared to 30% of those who use the Internet. Total who buy luxury products in a traditional way.

Briones considers that brands “have no other option”: “If you don’t enter the world of Web 3.0, it will bring you on its own”, referring to the Hermas house, which did not surrender to this virtual world and recently filed a lawsuit against the designer of virtual copies of his famous Birkin bags.

Briones believes that this world is very big, and while it achieves significant gains for its users, they face many failures at the same time.

Francois-Henri Pinault points out 3 opportunities presented by the new virtual world, the first of which is to expand the experience from the real world to the virtual world, with NFT products linked to existing physical products.

The second includes fully virtual products that “unlock new areas.” “Will these products be related to our professions, will they be clothes or shoes? Maybe. They could be other things as well,” she says.

The third opportunity is to “create new services” such as “lifetime income from a virtual product.”

While the brand today does not make a profit from reselling a used product, any contracts it signs for NFT products in the future will allow it to make a profit every time the product is sold.

“This opportunity creates a completely different economic equation,” says Benno.

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