Metavers, NFT: The luxury industry goes virtual

“Luxury comes first” 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.

The metaverse is a parallel universe 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 set “web3”.

Kering, the group of François-Henri Pinault, has set up teams at Gucci, Balenciaga and within the parent company that are fully ready. “Instead of being in the ‘wait and see’ attitude, which is often the attitude of luxury homes, we are in the ‘test and learn’ attitude,” the CEO said at a news conference. .

Bernard Arnault declared himself ‘cautious’ and presented the annual results of his LVMH group, on the metaverse, ‘a purely virtual world’. “Watch out for bubble effects,” he warned.

The number one in luxury is nevertheless very present in the sector. Flagship brand Louis Vuitton even created its own video game for its bicentenary, with NFTs to win. A few days after Bernard Arnault’s statements, his son Alexandre, executive vice president of Tiffany, posted a new profile on social networks introducing 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 to be had,” according to an HSBC note. A November 2021 Morgan Stanley banking study estimates that NFTs and online games could represent 10% of the luxury market, or $50 billion in revenue, by 2030.

Wild West and gold mines

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

“Technologies pass, fashion passes, but man remains man, with man’s obsession to show off his social status,” said Éric Briones. Hence, he says, the lure of the first “residents of these metaverses” (the community of “cryptocurrency millionaires”) for 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 Éric Briones, recalling the Hermès case that was not launched 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, there will be a few gold mines, a lot of lead mines,” he predicts.

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

That of extending the practical experience to the virtual world, with NFTs linked to existing physical products.

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

Finally, the possibility linked to “new services that will be created”, such as “lifetime annuity on a virtual property”. Today, the brand does not touch a product that is resold second-hand. Tomorrow, a contract may be attached to the NFT so that with each resale, a part goes back to the brand. “It creates a very different economic equation,” Kering CEO said.

Source: AFP

“Luxury comes first” 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 Journal du Luxe. universe accessible in augmented or virtual reality, described as the future…

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