What Gucci and others learnt from the metaverse

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    Last December, teen fashion brand Forever 21 was experimenting with new products as Christmas approached. “2000 style” pieces, flared pants, strappy crop tops, and fluffy accessories are on display. But its most popular design was a bubblegum pink beanie hat emblazoned with the word FOREVER — just 75 pence.

    In fact, the beanie never existed in the sense most of us understand it.was a purchasable virtual item robloxis an online gaming platform launched in 2006 and currently has nearly 60 million users and is considered one of the most successful early iterations of the Metaverse.

    The beanie was a resounding success. It cost around $500 to design and launch, but has sold over a million units, making him one of F21’s most popular items. Its presence was also felt when the brand launched its physical Metaverse collection in November. We featured this limited-edition pink beanie ($14.99) version, allowing consumers to match it with their avatar.

    Beanie’s journey from the metaverse to reality is a trick the company hopes to repeat. roblox Its ilk can act as R&D test labs where consumers are guinea pigs. “[We can] Find the trends your customers love and discover whole new ways to design and sell your products,” he says. The word “phygital” has already been coined to describe this fusion of physical and digital in fashion and other industries.

    Goldman Sachs estimates the Metaverse economy could reach $8 trillion in 20 years, and fashion brands are busy experimenting. Eager to hunt down young consumers, even respected luxury brands, like in the first few years of e-commerce, have found a foothold in this curious new world, wary of being caught in a nap. I’m trying

    In early 2022, Gucci became the first luxury house to announce the purchase of digital real estate in the sandbox metaverse for a store and event space that will create virtual galleries showcasing NFT artwork and vintage fashion pieces. . We also released a $12.99 virtual sneaker that you can “wear” using your phone’s augmented reality.

    In November, British heritage brand Burberry also pitched to Gen Z audiences by partnering with a hugely popular online game. Mine CraftThe brand’s signature tartan “check” seemed to go well with the product, which is famous for its heavy, square visuals. Collaboration he took place in two parts. Digital “skins” or outfits are free for players to download and wear in-game, and Burberry also Mine Craft, which includes a £390 scarf with pixelated Burberry lettering. Launchmetrics, a data platform that analyzes luxury brands on social media, estimates the project has generated $5.2 million in returns on his advertising investments.

    Experiments like this are key to understanding how the concept of luxury evolves in the metaverse. Launchmetrics Chief Marketing Officer Alison Bringé said: Brands hope that when consumers own virtual products, they are more likely to purchase real products when they have more cash. It’s a gateway to do,” she adds. Some designers, including Balenciaga, Prada, and Thom Browne, have created outfits for his Metaverse avatars for under $10 each.

    Minecraft characters in Burberry fashion

    Burberry adventures in Minecraft © Burberry

    Metaverse games and NFTs According to JP Morgan’s 2021 report, (non-fungible tokens) could account for 10% of the luxury goods market by 2030. This represents a €50 billion revenue opportunity and a 25% increase in overall market profit. Many image-conscious companies remain cautious about the potential of web3, but some have taken a nosedive.

    According to a 2022 report by French luxury industry group Comité Colbert and consultancy Bain, about half of French luxury brands have tried or will soon try Metaverse or NFTs. Kering, the family-owned group that owns brands such as Gucci, Saint Laurent, Alexander McQueen and Bottega Veneta, has created an in-house “lab” to accommodate these spaces. Young consumers are less loyal to particular brands, so it’s important to keep up with trends, according to Guétan Cordier, a lawyer who specializes in the luxury sector at Eversheds Sutherland in Paris. So connecting with this group on multiple platforms can become more important.

    Smartphone displaying Gucci shoes via augmented reality

    Gucci Virtual Sneaker © Gucci

    The appeal of the brand is obvious, but why would consumers want to spend money on virtual sneakers and handbags? It may be in itself. Even stepping into a Chanel or Hermès boutique is more than nervous for many. Compared to such exclusive environments, the Metaverse is a less intimidating one, especially for younger consumers who are used to interacting and spending money virtually.

    Another popular trend is augmented reality collaboration. Consumers can try out 3D versions of his clothing and accessories in their bedroom before ordering the product.

    Via the app, users can use their smartphone’s camera to superimpose a 3D digital version of the product onto their face or body. This is similar to his Snapchat filter in general. According to Snap, Estée Lauder, Mac, Gucci, and Dior all ran his AR try-on campaigns of trainers and makeup, which resulted in direct sales. For example, Dior’s Digital His Sneakers earned him 2.3 million views and earned him six times as much in advertising dollars.

    That said, not all is positive for luxury brands. Many are concerned about intellectual property and compliance issues with these new platforms, worrying about compromising their carefully preserved image. For example, unlike websites, businesses cannot design separate spaces to comply with national standards for data, consent, and privacy. “It’s great to have well-dressed avatars in the sandbox, but when Gucci and Balenciaga fashion appears in ‘adult’ content, there will be image issues,” says Cordier. It is still unclear how or if such issues will be resolved.

    The Decentraland logo displayed on a smartphone

    Decentraland hosted the first Metaverse Fashion Week in 2022 © Rafael Henrique/SOPA Images/LightRocket via Getty Images

    Another concern is brand reputation. Earlier this month, Hermès embarked on a groundbreaking lawsuit against his artist Digital, who sold a collection of fluffy virtual bags, the Meta Birkin, based on the French fashion house’s iconic Birkin bag, sold as NFT art. I won. Hermès claimed that artists copied its designs and made hundreds of thousands of dollars. Damages of $133,000 were paid.

    Asmita Dubey, L’Oréal’s Chief Digital Officer, said: “Web3 is unregulated, but it’s coming.”

    Some of these dangers have already been demonstrated by another hyped digital space, NFT. Last summer, Tiffany & Co gave owners of CryptoPunk NFTs access to custom necklace sales. These “NFTiffs” sold for 30 Ethers each (about $50,000 at the time), and the owner received a diamond-encrusted physical image made in the image of his corresponding pixelated CryptoPunk character. I also received a pendant. The collection he sold out in less than 30 minutes and this jeweler is estimated to have made him over $12 million. Currently, the minimum resale price for NFTiff is around 9 Ether, or around $13,000, according to CoinGecko, a crypto market analyst. It is possible that the value of a diamond encrusted pendant has held up considerably.

    Tiffany and Cryptopunk Pendant

    Tiffany’s NFTiffs © Tiffany & Co

    But Ian Rogers, chief experience officer at cryptocurrency firm Ledger and former chief digital officer at LVMH, has made it clear there is no turning back. “Luxury people need to understand NFTs and digital ownership better than anyone else”.

    “Appreciate aesthetics and craftsmanship, buy them because they think they have resale value, give them status, make them part of a small group that appreciates the same things.”

    Cristina Criddle is a reporter for FT Technologies. Adrienne Klasa is the FT’s Paris correspondent.

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