Luxury Brands Surfing the Web3 Pipeline
Digital and Physical Realities Meet Luxury Value Creation & Blockchain-Based Experiences
Luxury can be understood as the “creation of extreme value”, a realm available to everyone where we all are free to dream, desire and to fantasize about the luxury icons and imagery which we derive so much enjoyment from and which so powerfully shape our identities. As luxury brands have continued to embrace blockchain and the metaverse, it is important to recognize some of the most momentous moments which are together defining a new era for brands, designers, producers and global trade as a whole as we are entering the beginning of 2022.
Witness to the one of the greatest technological and cultural shifts in human history
These realms of perception created by luxury brands work by signaling us to feel and act in myriad ways, most commonly pushing us to feel powerful and allow us to envision ourselves as more attractive, more experienced and more desirable. There is deep-seated iconography associated with luxury brand products as well as attendant feelings engendered by them. As such, as we enter 2022, there is a clear need for luxury brands to evolve the stories they tell. How do they do this? Without question, they do this by embracing the metaverse, via blockchain tech and elevating the stories they share with their customers.
The move from web2.0 to web3.0 has been years in the making, with blockchain-based experiences becoming more common every day. We are now witnessing the convergence of one of the greatest technological and cultural shifts in human history, a momentous movement envisioned in futuristic books and time-and-space bending movies for centuries and now embraced by some of the most influential and powerful global companies in existence. We’ve been offered new tools like Oculus — and previously ones like Google Glass, RIP — plus new social experiences driven by deep meta-data, instant updates and global reach for every individual on the planet.
This shift indeed embraces a hands-on approach to using machine learning and global mass adoption, taking the commercial application of blockchain technology to the next level. Defining this shift as merely “entering the metaverse” does not do it justice, however it is such a nascent global move forward that “the metaverse” shall suffice for now to tell the story.
Increased immersion offered by the metaverse requires more sophisticated content
As we enter early 2022, we are now seeing concurrent mass adoption by content creators, designers and major brands of the core underlying features of blockchain, namely the utilization of non-fungible tokens (i.e. NFTs) as well as the tracing of digital and physical products along their native supply chains.
The evolution of content created by luxury brands, and particularly the progression of luxury brand storytelling, is noteworthy. In what Bloomberg deems to potentially be a $800 billion expansive market, the metaverse is surely the digital wild west, a place where virtual and physical realities mesh and together are forming a new global marketplace where consumers are empowered via seamless retail experiences and where transparency, privacy, accessibility and convenience reign supreme.
“The reason we fall in love with a brand is its brand story. The story triggers a signal, and when we perceive that signal, we see ourselves in a different, better light.” ~ Daniel Langer (@drlanger)
Major brands are setting stage for the future as they embrace the blockchain, metaverse, & NFTs
This implementation (and thus validation) of blockchain tech in the luxury industry can be found in various examples across all major sectors, the most common form today presenting itself as a partnership between a major brand and a blockchain-based startup which helps provide the entry point for the brand can launch its products into the metaverse, often using NFTs.
Starting with NARS teaming with Truesy, we also have seen Louis Vuitton partner with Wenew; we then saw Nike create Nikeland with the help of Roblox, finally developing Nike Virtual Studios; we saw e.l.f join up with Bitski; and most notably we were witness to Dolce & Gabbana partnering with UNXD for a historic and record-breaking NFT collection launch. Especially worth mentioning is UNXD’s partnership with Polygon to launch a Culture Fund aimed at expanding NFTs in the fashion industry. Finally, we’ve seen Decentraland call for designers, brands and fashionistas to prepare for a virtual fashion show in the metaverse.
“‘Prada sees the emergent metaverse as a new space for the brand to re-define luxury for the next generation and cultivate shared experiences that honor the brands’ spirit of experimentation and creativity.’” Lorenzo Bertelli, Prada
Despite these remarkable moves by luxury brands worldwide, their attempt to tell their luxury stories — that is, to “create extreme value” for their customers — is overshadowed by the move made by Aura Consortium in April 2021 as they’ve now taken luxury value creation to new heights with their concerted efforts to allow any luxury brand to track and trace products based on NFT tech.
Signaling a new collaborative era for luxury brands, storytelling and value creation
This is a signal of a new collaborative era for luxury brands who are eyeing NFTs as not only revenue-generators but as a way for them to enter the greater metaverse. Most of all, the existence and promulgation of Aura Consortium provides clear methods for brands to assuage consumer’s fears related to authenticity and provenance (in January 2022, Aura released its cloud-based Aura Saa tool).
Indeed, the confluence of both the moves made by individual companies and the collaborative efforts of groups like Aura represent a bright signal for the future of consumer-focused, blockchain-based marketplaces. The identity verification abilities around luxury goods (which the existence of Aura now allows for) is not to be overlooked; such abilities mean better decision making and better information and protection for consumers, and likewise such capabilities work to disallow illegal counterfeiting groups from profiting off of fake goods.
Entering the metaverse via new preferences, new expressions and new access points
Through strategic partnerships and a thrust of innovative new marketplaces such as LuxFi NFT Marketplace and others, a new standard of luxury value creation (i.e. luxury brand iconography) has been established, as indeed the mechanics of luxury icons do not change but the preferences, expressions and access points assuredly will continue to evolve and adapt to consumer demands.
As of yet, there is no dominant platform in the luxury industry providing the crucial value creation which customers will in the future surely demand; thus it is uncertain how the digital and physical landscapes in luxury goods will develop over the coming months and years. What is certain is that we are sure to have greater accountability around the products that reach end-consumers and we will surely see greater obstruction of the fake-good supply chain that has plagued the luxury industry for so many years — likewise we are certain to see new forms of connection made to what luxury represents and new forms of signaling develop around the deep stories told by luxury brands globally.
Most importantly in all of this, we are assuredly going to become aware of and see expanded, equal access to much easier, efficient, and lower-cost ways for consumers to validate the authenticity, ownership, warranties and traceability of the products they so love and desire.
About LuxFi
LuxFi is the world’s first asset-backed NFT marketplace for luxury assets, where people can buy, sell and invest in luxury assets using cryptocurrencies and traditional payments. We eliminate counterfeiting while minting an NFT on a multi-chain blockchain network, with a focus on luxury assets that hold value well and have a high resale value. Leveraging our big data intelligence system and unique algorithm for automated data collecting and data processing, the value of each NFT on our platform is backed by real-world data.
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