Posted Sep 7, 2022, 8:30 AM
The metaverse is not yet an Eldorado for luxury, but the pillars of the sector continue to invest massively there. Due to the collapse of cryptocurrencies, many observers expected a slowdown in launches in the various spaces (metaverse, sandbox) presented as the most promising. But the brands that had launched NFTs (non-fungible tokens) in 2021 did not change their strategy and continued their investments.
Despite the fluctuation of these alternative currencies, they again offered new NFT collections this summer. “A year ago, luxury was groping in the metaverse, now it stands out with sharp and more profitable offers,” notes an expert. According to the Dune Analytics study conducted by Noah Levine, the Tiffany jeweler owned by LVMH (owner of “Les Echos”) made a considerable leap this year among the brands with the highest incomes in this field. The American jeweler would have reached 12.6 million dollars in revenue, ahead of Gucci by a short head ($11.6 million). Neither the jeweler nor the fashion house confirms the amounts from Dune Analytics. On the other hand, they do not hide their satisfaction.
Tiffany’s place now in the top tier of the most successful brands is explained: in early August the jeweler exploded sales of CryptoPunks, one of the most famous series of NFTs, by marketing the first NFTs linked to a jewel with a series of 250 pendants at 50,000 dollars each, sold out in 20 minutes. The operation should be renewed with a collection that will present “the same degree of exclusivity”.
For its part, Gucci, flagship of Kering, has distinguished itself in the use of a dozen cryptocurrencies like few luxury and fashion players. “Since mid-August, absolutely all Gucci stores in the United States have accepted them,” says the group. Gucci also took a step forward by integrating the Apecoin currency in August, which was created by Yuga Labs, the origin of Bored Ape Yacht-Club, whose collection of 10,000 NFTs bearing the image of monkeys is one of the most famous.
Prada has also just offered a capsule collection linked to NFTs which will not allow it to increase its immediate income in this area but “is a success”. For this collection, his choice was to offer these unpublished NFTs to his clientele. Since this summer, Balenciaga has also opened “the doors to cryptocurrency payments”. Since August, its network of stores in the United States has accepted “12 cryptocurrencies”. Where do these transactions take place? Mainly in California, New York and Miami.
Finally, the last notable launch, the one at Tag Heuer. Frédéric Arnault, Managing Director, mentions “a hundred models” already sold in cryptocurrencies. The watch brand enjoyed considerable success by marketing an original watch in June. Called Connected Caliber E4, it has integrated a unique display functionality “allowing you to present for the first time on the dial of a watch, an NFT of your choice”.
According to a study by Morgan Stanley, the potential of this market would be 50 billion euros for luxury by 2030. In the United States, 36% of Millennials and 23% of Generation Z already own cryptocurrencies. “Part of the young American luxury clientele perceives the metaverse as a driving force; the big brands are innovating and taking a stand,” observes Luca Solca, luxury analyst at Bernstein.
Prioritize the notion of rarity
“Luxury was one of the first sectors to invest in it and we are only at the beginning,” said Mattis Meichler, director of Hash Consulting. According to him, several groups should further strengthen their investments in the ecosystem leading to Web3, of which the blockchain is the base. “The owners of NFTs, like luxury items, have the feeling of belonging to a community, a privileged group; the notion of rarity unites them”, continues Mattis Meichler.
Against all expectations, the summer of 2022 was therefore a period of overheating. New investments are also to be observed. Aglaé Ventures, a venture capital company backed by Bernard Arnault and LVMH, launched a few weeks ago a 100 million euro investment fund dedicated to projects related to Web3.0 and cryptocurrencies (start-ups) .
According to Dune Analytics, the Italian fashion brand Dolce & Gabbana remains the most profitable in this new field of activity (with 25.6 million dollars in revenue since its first launch). However, this estimate is considered a little “overvalued” by two luxury analysts. But Dune Analytics maintains that its collections launched since the spring alone have brought in “over $19.8 million.” Its revenue in 2021 was just over $5 million. “Being a forerunner is always an advantage,” recalls Luca Solca, from Bernstein.
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Luxury Brands Amplify Their Breakthrough in NFTs
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