This March, Gucci partnered with 10KTF, an NFT project that creates digital accessories. In order to gain access to this collection, buyers needed to be a part of the Gucci Vault community, be an inhabitant of the 10KFT’s metaverse world- New Tokyo, and have a PFP (Profile for Picture, an NFT used as a profile picture across platforms) or an NFT avatar. Access was granted to 5,000 members, allowing them to choose looks inspired by recent Gucci Vault collections.
This isn’t Gucci’s first foray into the metaverse or NFTs, either. They already have virtual boutiques, partnered with Superplastic to create NFT mascots, and are selling digital luxury products. Alessandro Michele. Gucci’s creative director since 2015, has been at the helm for these projects.
Kering president and CEO François-Henri Pinault (Gucci’s parent company) has created a team fully dedicated to Web 3.0 and the metaverse, as well as individual teams for Gucci and Balenciaga. He is quotes in Vogue Business as saying, “we are in an extremely early stage of what could happen. Nothing is certain; it might fizzle out. but the philosophy of the group when it comes to innovation — rather than wait and see, which is often the posture of luxury houses — is to test and learn.”
In February, Dolce and Gabbana launched their second NFT series. The luxury brand partnered with UNXD, an NFT marketplace, to create Boxes. The boxes themselves were available in black, gold, and platinum and each contained increasing levels of holder benefits. Alongside Boxes, D&B launched its own community, DGFamily. Each box gained the owner access to DGFamily, as well as both digital and physical rewards.
Much like Gucci, however, this was not Dolce and Gabbana’s first NFT collaboration. In August of 2021, they partnered with UNXD to create Collezione Genesi. Collezione Genesi boasted that it was the first luxury NFT collection to involve both physical and digital works. This collection garnered $5.65m.
Louis Vuitton went in a different direction with their NFT collaboration. In August 2021, they launched Louis: The Game. The game seeks to educate players on the brand’s history while incentivizing them with rewards such as NFTs of historical postcards, and entry into an NFT raffle. There is a global leaderboard, and the brand is planning physical experiences in the future. The game has been downloaded roughly two million times.
LVMH chief executive Bernard Arnault has said in the past that he is cautious of the possible metaverse bubble. Still, LVMH have released several projects including the nonprofit Aura Blockchain Consortium, a platform that aims to authenticate luxury goods. Aura brought together many top executives from luxury brands, eager to develop this platform together for their common goals.
Most of the luxury brands mentioned here need no introduction. Their brand awareness comes from celebrities and influencers. Their logos are recognizable to most, regardless of the individual’s interest in luxury items. But gaining brand loyalty may be an incentive in venturing into NFTs and the metaverse. Most of these ventures tend to focus on community. Building a community for your customers to be a part of can lead to them feeling like they are part of the brand itself. There is a vested interest that may not have been there before. There are also the added incentives of physical rewards or experiences that can drive more customers to invest in these digital experiences. NFTs are often expensive. The ones above are all created on the Ethereum blockchain, which is currently one of the best performing cryptocurrencies, with 1 Ether costing over 1,000 USD. By creating NFTs and digital spaces, luxury brands are already playing to their audience, an audience of consumers with money to spare.
According to an article in Vogue Business, Selfridges has begun selling NFTs in-store. “The project unites the work of artist Victor Vasarely with designs from Paco Rabanne, in an effort to combine physical shopping with digital fashion in a way that feels familiar to luxury fashion consumers.” The art can be purchased by using a digital screen that will be at the Oxford Street location. Designer Paco Rabanne created physical clothing inspired by Victor Vasarely's art. A select number of digital versions of Paco Rabanne’s designs will be offered when the physical items are purchased. Jason Attard, founder and CEO of Substance, the NFT platform that worked on the project, says that the goal is to make shopping for NFTs as familiar as shopping for clothing.
Urban Outfitters launched their first foray into Web3 in April. They partnered with notable graffiti artist, André Saraiva to create 500 NFTs. The collection is part of the Smiley Collector’s Edition and was created to celebrate the 50th anniversary of Smiley These NFTs were also considered utility tokens and were used to unlock prizes and rewards for a select amount of ticket holders. Physical home good items were created to go along with the NFT launch and celebration of Smiley.
Though they haven’t released anything yet, Walmart has been quietly setting up their own entrance into Web3. For the past year, they have been patenting and planning their expansion. What we have seen so far is proof that they are planning to expand their shipping practices to include purchases made in the metaverse with patents in the works for “Verse to Home,” “Verse to Curb,” and “Verse to Store.” The store began testing interest in purchasing Bitcoin at some locations, tying the option into their CoinStar kiosks.
With so many retail companies beginning to invest in creating NFTs, there is obviously an ROI. How can NFTs, which are inherently digital, create real meaning for a brand?
NFTs are making the news, especially when they show up in a new business segment or are being used in a unique way. By creating NFTs, brands are ensuring news coverage of their new venture. Brand awareness drives business primarily by ensuring that consumers think of your brand when a need arises. If you need coffee, you may automatically think of Starbucks. With luxury brands, the brand awareness aspect could present differently. Instead of coming to mind to fill a need, the brand awareness created by capitalizing on the buzz around NFTs could make consumers curious, driving them to the company’s site.
Brand Loyalty is also a primary benefit of utilizing NFTs. Most of the examples above include ways to make consumers, especially loyal consumers, feel like they are a part of the brand or process.
Creating special digital experiences for consumers can also increase sales and a sense of loyalty. It immerses them in the brand and gives an additional entertainment value to a retail item or line. It is a way to gamify the purchasing process.
As NFTs become commonplace, we can expect to see more unique immersive experiences, more branded physical incentives for purchasing NFTs or participating in a digital retail space, and less media coverage on new NFT collections. Brands will need to focus more on creating memorable collections or experiences than simply relying on curiosity garnered by the news.
Sources:
https://www.sld.com/blog/digital-experiences/the-retailers-guide-to-nfts/
https://luxus-plus.com/en/gucci-launches-digital-suit-project-in-collaboration-with-digital-artisan/
https://www.voguebusiness.com/technology/gucci-goes-deeper-into-the-metaverse-for-next-nft-project
https://unxd.com/drops/collezione-genesi
https://currency.com/dolce-gabbana-to-drop-second-nft-series-boxes
https://www.voguebusiness.com/technology/the-blockchain-playbook-from-lvmhs-aura-to-arianee
https://www.voguebusiness.com/technology/louis-vuitton-to-release-new-nfts
https://www.ledgerinsights.com/walmart-planning-nfts-tokens-shopping-in-3d-metaverse/
https://fortune.com/2022/01/17/walmart-metaverse-own-nfts-crypto/
