Luxury brands can no longer ignore the opportunities that Web3 offers and supports if they wish to maintain their cultural relevance and cater to a new potential clientele. With this in mind, a recognizable metaversal identity has become a widespread implementation in the luxury market. Web3 has also provided this industry with new avenues for storytelling development, where they can evolve their narrative to activate and engage a strong and unwavering community.
While the full reach of the metaverse has yet to be uncovered, this new tool – and this new palette of expression – is rapidly accelerating visibility, popularity, and revenue growth. According to Morgan Stanley, in less than 10 years, digital collectibles from luxury brands could represent 8% of an estimated $240 billion market by 2030.
Given the importance of this emerging and lucrative market, Daily Jing invited a panel of experts for its webinar, “NFT Collaboration: Pros and Cons of Luxury NFT Monetization” to explore the building blocks of NFT curation, outlining the pros and cons of the process. The panel included Giovanna Graziosi Casimiro, Head of Decentraland and Metaverse Fashion Week, Jamie Gill, CEO of Roksanda, and Michaela Larosse, Head of Content and Strategy at The Manufacturer.
Here is Daily Jing five best takeaways.
Realistic long-term expectations are essential for brands looking to enter the metaverse.
For Web3, Lacrosse believes it’s “better for brands to think about long-term rewards rather than immediate value.” Brands should look to build a long-term presence in the metaverse that relies on a well-established infrastructure and a thriving digital ecosystem, instead of focusing on the benefits of revenue generation.
Lacrosse also said this can be achieved through a process of strategic experimentation and dissecting which model works best for a brand and its story. Non-fungible tokens are an innovative and effective avenue for brands when discussing how to preserve their legacy and keep their existing community engaged through exciting new developments.
Brands need to make sure they don’t alienate their existing, older consumer base in favor of a Gen-Z audience.
While older consumers have already embarked on Web2 – demonstrating that they are willing to participate in the experience – brands must be ready to describe the value of an immersive Web3 Internet for their consumers and clearly explain why they should participate in the easiest and most convenient way possible. By defining the metaverse as simply the next version of the internet, brands can strive to communicate this Web3 transition in a way that resonates with the stories and lived experiences of their consumers.
For Roksanda, it was about recognizing that their consumer base included a mature audience and not just digital natives, and finding a way to make the tokens appealing to them. “The way we sold our NFTs both online and offline was like a limited edition collectible, the same way people collect cards or a unique piece of art,” says Gill. “We’ve seen this approach work well, similar to when Porsche launched its NFT series and adopted a similar method.”
The functionality of NFTs is still an issue for brands, as many face hurdles when establishing a Web3 presence.
Web3 hosts its own array of technical challenges that brands need to be prepared to meet and overcome. Brands should be open to receiving training on how to enter the metaverse and would benefit from connecting with experts in the field to fully understand how to achieve the most seamless transition to the digital sphere. This can be done by connecting brands with digital creators in the field, who can explain the process to make it as seamless and simple as possible.
Another classic mistake is that brands do not activate a community beforehand. Long-term value propositions should be favored over one-time activations (i.e. a brand performing an NFT drop and then doing nothing else) in order to engage a consumer base and build a narrative exciting and interesting. Brands need to think about how their tokens fit into an ongoing, longer digital story.
The importance of digital identity; brands must understand that they are addressing the second personality of their consumers.
Web3 is an outlet for consumers to explore who they are by expanding their own existing identity or creating a completely new one. Brands need to recognize that what a consumer buys in real life won’t always parallel their buying habits and choices in the metaverse.
“For brands, this means they are dealing with customers who buy specific products in the physical store, but in the metaverse, they might want to explore more about the brand and the different aesthetics offered by the brand, which allows them to be more experimental with their purchases,” explains Casimiro. “Consumers are going to have two different aesthetics for two different occasions; one being physical, the other virtual. In short, people view their virtual identities as a narrative entirely different from their physical selves, which is something brands need to be prepared to understand.
Each brand will have its own unique strategy when it comes to the NFT curation process.
In the physical realm, the majority of the value is in the product itself. But for Web3, the focus is more on the value that a community brings to the product. The brand’s address is critical to the success of its digital expansion.
Lacrosse explains that every strategy should focus on how a brand gets its story across in the digital space through authentic communication. For brands, it’s about upholding their spirit and values, while ensuring that this ethos translates well into the metaverse. “Luxury brands have amazing stories to tell their consumers, so it’s about executing the story in a way that’s relevant to their audience and resonates with them and extends the value of everything they do. make.”