Who remembers when luxury brands didn’t believe in e-commerce, stating it would cheapen the customer experience? Not only have most brands ended up realizing the potential of the e-commerce market, brands are now dabbling into the Metaverse.
Bain & Company research indicates a spike of luxury online sales from 7% in 2019 to 22% in 2021, which tripled due to the pandemic. Technology is forever evolving and luxury knows not to stay behind on trends and miss out on new opportunities.
Gucci has recently been active in the Metaverse, releasing Gucci Grail. This set of NFT is a collaboration between Gucci creative director Alessandro Michele and fictional “famed digital craftsman” Wagmi-San. Selfridges, a department store in the UK, announced it will sell NFTs and digital fashion in its store in Oxford Street. The first Metaverse Fashion Week was held at the end of March in Decentraland. It was hosted on a virtual reality platform and used a cryptocurrency called Mana.
LVMH joined forces with Prada Group and Cartier - odd enough it's the subsidiary arch-rival, Richemont - they developed the Aura Blockchain Consortium. It was definitely an unprecedented collaboration of competitors - this was the world's first global luxury blockchain. The challenge for luxury brands is creating the hype of buying tangible items for the consumer to wear at that moment. However, the NFT community gets the thrill of owning a one-off piece of luxury that no one else can have. NFTs are being treated as investment with their prices going up as the first drops will be the “rare” and “sought after” items.
With the NFT market expanding, be wary of scams and counterfeit products. You may ask "how??”. Virtual copycat products are being sold on various markets. Do your research if the price is too good to be true. It usually means it is. Luxury brands can only do so much to prevent the spread of counterfeit in the virtual and real world.
The Metaverse certainly allows brands to showcase more creativity and craftsmanship. This is a new market segment that many luxury brands haven't been able to tap into yet.
Bag Lovers, are you on the Metaverse yet? Let us know your thoughts.