PARIS — If you still don’t understand NFTs and what, exactly, luxury brands are doing with them, Ian Rogers has an easy explanation for you — it’s all about connection.
“Try it, have a value exchange with an artist and see what that feels like,” he said, comparing digital assets to the pricing of luxury leather goods. “The people who do it understand it, they feel it. They feel close to the brand. And that’s where this is. This is a very similar thing and it’s emotional.”
“Luxury and NFTs are the same thing — they’re both about scarcity, community and creativity,” he added.
That was the consensus from the panel including Rogers, Ledger’s chief experience officer, on stage with Franck Le Moal, IT and technology director at LVMH Moët Hennessy Louis Vuitton, and Gucci executive vice president Nicolas Oudinot during the “How Tech Is Transforming the Customer Journey” panel at WWD’s Metaverse Symposium held in Paris on June 28.
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Rogers, who previously served as chief digital officer at LVMH, said we are in the midst of a generational shift, with the current cohort of 15- to 20-year-olds growing up playing immersive games — the precursor to Web3 — who will have an entirely different definition of value not focused on old-school craftsmanship.
Just as we use the term “digital natives” currently, there will be “Web3 natives” in 20 years’ time. While that is a decades-long shift, the technology to get there will be fast, the panelists agreed, and brands need to put down their stakes now.
However, Rogers cautioned against the “if you build it they will come” mentality of jumping into the metaverse just because it is the next big thing. It’s critical for brands to understand their customer base and build small, differentiated communities around art or sports that will engage consumers.
LVMH has been pursuing such a “careful” strategy, said Le Moal. It’s not just NFTs for LVMH — the group considers the metaverse “a global framework” that includes augmented reality, virtual reality, blockchain tech, crypto and virtual products.
That is one of the main issues plaguing the discussion of digital assets — everyone seems to be talking about different things when they say “Web3” or “metaverse.”
The symposium took place just as crypto coin values were crashing — Bitcoin lost more than 38 percent of its value in June alone. The panelists likened the currencies to a “roller coaster.”
“But this is the ride that we are going to be on for the next 10 years or so,” said Rogers.
However, committing to crypto is an “absolutely critical” long-term strategy, added Le Moal. He predicted government regulators will soon step in and that established players are about to enter the game as well. “Two years from now, we’ll see it as a battle between Ali[baba], Facebook and those guys. I think it will change a bit the face of the story for the final customer and for the brand,” he said.
Oudinot added that the tech is moving very quickly, fueled by top engineers and talent opting for Web3 start-ups instead of large companies like Google and Facebook parent company Meta, which will speed up the adoption of currencies and acquisition of assets “pretty quickly.”
The trio agreed that ultimately brands’ tasks are twofold. First, brands need to create products that allow NFT holders to show off their digital assets to other enthusiasts, which drives up their value, because ultimately it’s all about selling the idea of belonging to a tribe and crafting your personality through acquisition. One way is allowing people to display their Gucci NFT art as a profile pic on social media, said Oudinot, while Le Moal cited Bulgari’s Octo Finissimo watch which displays verified digital art.
Secondly, brands should tie NFTs to physical products or in-person events. “Everything is connected to this concept of having a digital twin with a real product,” added Le Moal. “We believe that at the end, the value will come from the connection between digital and physical.”
Both Oudinot and Rogers brought up the recent NFT.NYC conference in New York City, where many brands were also organizing IRL experiences. Gucci hosted a private event for NFT holders.
“At the very same conference, I could hear speeches saying it’s the end of physical product,” said Oudinot. “But when we organize an event, they’re all knocking at the door … I think it’s only going to be complementary and create more stickiness between the brand experience and the consumer.”
Brands could sell the rights to their most exclusive products via NFTs, with the physical goods held by the brand, to be redeemed later, added Rogers, comparing it to collecting paintings: “When you take your products and put them into an always-on, 100 percent liquid global market where things can change hands and there’s no authenticity check needed and there’s no risk of it being damaged, that’s massive and transformative.”