Some luxury companies are issuing limited editions of digital wearables and “digital twins” as non-fungible tokens (NFTs) collectibles in order to generate new revenue streams, create brand loyalty, or raise funds for charitable purposes. Others utilize them to increase brand awareness, convey a story, or reach new audiences. While NFTs began to gain traction in 2021, they did not become popular until 2022, when they became a key player in the trillion-dollar marketing industry. Marketers are progressively providing different brand experiences and awareness to drive greater interaction within the lucrative market of NFTs.
Luxury Brand’s Digital Twin To Promote Community Building
Counterfeits are a major issue in the fashion business all around the world. Luxury brands alone lost $98 billion in sales to counterfeits in 2021. These losses have the ability to harm the earnings development and reputation of any premium business. This is one of the reasons businesses are turning to technology, notably NFTs, to reduce losses and retain customers. Another important factor is the prominence of the NFT market, which luxury companies may be able to use to strengthen their marketing efforts.
Despite being rivals, luxury brand conglomerate Louis Vuitton Mot Hennessy (LVMH) formed the Aura Blockchain Consortium in 2021 with Prada Group and Cartier. This non-profit platform makes “digital twins” of designer items. A “digital twin” is simply a virtual representation that is intended to accurately mimic a physical object used as an NFT. The purchase of the product’s “digital twin” might serve as a subscription to event invites and unique access to releases. Its primary motivator is to create a community of consumers who share the brand’s message. Because these luxury aficionados want in on this exclusive privilege, the number of spenders on these premium items grows, increasing the businesses’ market visibility.
Aside from fashion, other sectors are progressively adopting NFTs in order to maintain consistent development in specialized markets. Mercedes-Benz is the most recent addition to the Aura Consortium Blockchain. MercedesBenz’s access to Aura Blockchain Consortium’s blockchain technology allows the German automaker to explore new strategic dimensions of digital brand development, such as developing NFTs for in-car digital art experiences. The in-car digital art experience represents a substantial advancement in Mercedes-Benz UI/UX. Digital artworks may be projected on the vehicle’s large inside screen, transforming it into a personalized, immersive art experience.
As the market for NFTs is still developing, artworks enhanced by light and music might be another strategic move for the firm. As a result, premium automobile makers are expanding their NFT offerings to include auto-related artwork and experiences, attracting both art collectors and motor aficionados.
Making Use Of NFTs For Rebranding And Revival
NFTs are utilized not just for promotional purposes, but also for a distinct path of branding that corporations follow to rebrand or revitalize brand interests. According to The Financial Times, Vertu’s UK manufacturing division will close, resulting in the loss of 200 jobs. Vertu fans were upset in 2017 when the British premium phone manufacturer failed to emerge from bankruptcy. Vertu was in disarray after offering to pay creditors US$2.4 million of the firm’s US$135 million debt. Murat Hakan Uzan, a renowned Turkish businessman based in Paris, will maintain control of Vertu’s brand, technology, and design licenses in order to relaunch the firm.
Vertu, on the other hand, returns to the market with NFTs to commemorate the brand’s 22nd anniversary. They worked with Binance to launch the Vertu Constellation X Ulm premium smartphone. It may be obtained through an exclusive sales procedure centered on NFTs.
Image: Journal du Geek
Vertu makes around 10,000 cellphones available for purchase through the purchase of an NFT on the official Vertu Paris website, and approximately 1,000 NFTs will be available for purchase on Binance’s platform. Vertu provides consumers with two alternatives when purchasing the NFT. One option is to convert their bought NFT into a physical Vertu Constellation X ULM 2122 smartphone, or they may keep the NFT and join the new Vertu 3.0 business club. Those who chose the latter will gain exclusive entry to the Vertu 3.0 Business Club, which allows NFT holders to attend exclusive events attended by a select group of business high flyers from the company’s 300,000 private buyer list.
It is analogous to how Prada, LVMH, and Cartier maintain customers from their existing large client base. This attracts customers even more because it allows them to broaden their social circle and commercial activities. Whatever course the customers choose, each original NFT holder may be eligible for a collection of cherished assets worth around US$4.7 million.
Vertu’s convertible NFT business plan might make or destroy the NFT and phone markets. However, given the significance and popularity of NFTs today, the brand is more likely to skyrocket than decrease.
Raising Awareness For Potential New Audiences
The entry of luxury brands into the realm of NFT may be one of the most important economic concerns in the current world. The metaverse is a burgeoning marketplace for future NFT, and businesses have already begun to move into this virtual realm, which is said to have enormous potential for drawing and building a new consumer base.
Gucci, an Italian luxury fashion firm, is one of the world’s most known fashion companies, while Roblox is one of the most popular games and platforms. There is no question that their collaboration produced something special. That’s what happened when Gucci developed a Roblox virtual garden display. The show included a reinvented retail experience as well as digital wearables like NFTs. One of the assets is a digital replica of the Dionysus Bag that was initially sold for $6 and later scored for about a thousand times that much.
The fact that Gucci’s digital assets could only be purchased for a short time provided users with a sense of scarcity. It is used as a marketing tactic to establish an area for exclusivity and notice. This also attracts fresh and younger audiences to the brand, prompting them to look to Gucci as a brand ambition in the near future.
Burberry, another premium fashion brand, has embraced the NFT’s importance by teaming with Roblox and Blankos Block Party. The game included major Burberry goods such as the trench coat, boots, crop top, and shorts.
Burberry’s entire ensembles and individual choices are accessible in the market both online and offline, which is a distinctive twist. This exemplifies the trend that has made businesses’ NFTs so relevant in attracting new customer demographics.
Apart from Gucci and Burberry, Givenchy has joined the digital fashion arena with its new NFT line in partnership with graphic artist Chito. The collection consists of 15 NFTs with eye-catching airbrushed figures and symbols that were also used for Givenchy’s Spring 2022 pre-collection. Givenchy was inspired by the NFT movement because of the strong drive to offer artists like Chito with the opportunity to broadcast their work and vision directly to a global audience. NFTs also offer a completely new way of thinking about fashion’s function, not just physically, but also digitally, bridging the gap between the two worlds.
Many luxury fashion brands seek to present fashion in every form possible, from runway shows to retail experiences, fashion presented as art, film and photography. The construct of luxury could be presented in various ways that extend beyond the boundaries of reality and is one of the ways to build connections with the audience using NFTs. After all, anything with the utilisation of NFTs seems to be working out so far.