Metavers, NFT: the luxury industry becomes virtual

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

Metaverset is a parallel universe available 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 kit “web3”.

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

Bernard Arnault declared himself “cautious” and presented the annual results of his LVMH group, on the meta-verse, “a purely virtual world”. “Beware of bubble effects,” he warned.

Number one in luxury is nonetheless very much present in the sector. Its flagship brand Louis Vuitton even created its own video game for its 200th anniversary, with NFTs to be won. A few days after Bernard Arnault’s statements, his son Alexandre, executive vice president of Tiffany, published a new profile on social networks representing him as a CryptoPunk character, a collection of NFTs.

“If you’re wondering why most luxury brands are going virtual, it’s partly because there are deals available,” an HSBC note said. A November 2021 study by Morgan Stanley Bank estimates that NFTs and online gaming could represent 10% of the luxury market by 2030, or $ 50 billion in revenue.

Wild West and gold mines

Dolce & Gabbana sold nine NFTs in the form of dresses, suits, tiaras and crowns in September for 1,885,719 Ether (a 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 proprietors on a journey between real life and the meta-verse”.

“Technologies pass, fashion passes, but man remains man, with man’s obsession with showing off his social status,” according to Éric Briones. Therefore, according to him, the attraction of the first “inhabitants of these metavers” (the community of “millionaires in cryptocurrency”) for luxury.

It’s also about winning a new clientele: men (according to HSBC, around 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 into web3, web3 will come to you,” predicts Éric Briones, recalling the Hermès case, which did not start in this virtual world but recently sued an artist in New York who had created NFTs in the form of the famous Birkin bag. “It’s a wild west that will be a few gold mines, a lot of lead mines,” he predicts.

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

That of expanding the real world into the virtual world with NFTs attached to existing physical products.

That with purely virtual products that “open up completely new fields. Will these be creations related to our profession, clothing? shoe? Maybe. But it could be something else. “

Finally, the possibility attached to “new services that will be created”, such as “lifelong annuity on a virtual property”. Today, the brand does not touch anything on a product that is sold used. Tomorrow, a contract can be linked to NFT, so that with each resale, a part comes back to the brand. “This creates a very different economic equation,” the CEO of Kering said.

Source: AFP

“Luxury is at the forefront” in the new virtual world of metaverse and NFT because they “share the same values: rarity, exclusivity, VIP dimension, high prices”, explains Éric Briones, director of the Journal du Luxe. Metaverset is a parallel universe available in augmented or virtual reality, described as the future …

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