How NFTs are resetting conventions in the luxury goods industry
There is something quite astonishing about the way in which the luxury goods industry, especially watch-making and jewellery, are associating with the most recent iterations of the internet, namely NFTs (non-fungible tokens) and the Metaverse. Anyone looking in from the outside may rightly wonder whether authenticity, quality and hand-crafted expertise can exist side by side with a virtual world and its often tasteless flamboyance.
The luxury goods industry, retorts Caroline Reyl, who manages Pictet Asset Management’s Premium Brands strategy, has anyhow been able to harness digital technology skilfully to date, to drive its sales higher without having to sacrifice quality, which would have meant lower margins. As for these new NFTs, this does not perturb Evelyne Genta, founder of Gérald Genta Heritage, a foundation dedicated to the memory of her late husband, watch designer Gérald Genta who created classics such as Audemars Piguet’s Royal Oak, the Omega Constellation, and Patek Philippe’s Nautilus. “At first glance, these two worlds are poles apart. But in reality, a NFT works much like a product’s certificate of authenticity, and because it transits via a blockchain, it is set in stone. I’m sure my husband, though a paper-and-pencil man, would have liked this system as he was always thinking in terms of the future.”
Lorenz Bäumer, founder of a prestige jewellers situated on Place Vendôme, in the heart of the Parisian luxury goods district, is also convinced that leading brands must not let “Web 3.0” pass them by. For this master jeweller, whose main passion is spending time with clients, a NFT can be used to highlight a product or bundle in extra services such as a masterclass or a virtual visit of the Colonne Vendôme. Meanwhile, the Metaverse is an excellent channel for presenting one’s collections to clients unable to travel or who live abroad. “An item of jewellery can be shown in its real-life setting, with a dress, a pair of earrings, in a reception room,” he says.
But even if there’s a lot of talk about them, NTFs and the Metaverse are still in their infancy. “For now there’s mainly buzz, lots of noise, plenty of speculation, and all this may never live up to expectations,” explains Julien Abbou, Chief Digital and Innovation Officer at Digitalli, a marketing agency. By wanting to be first movers at all costs and have their names connected with these hip new innovations, major luxury brands “are playing with their reputations”, he continues.
Thomas Tassin, co-founder and Chief Operating Officer of Garou, is of the same mind. In his opinion, the Metaverse – a 3D world in which people can immerse themselves surrounded by NFTs and other objects – is not for neophytes. Companies who want to use it as a showcase should first define a strategy, brainstorm a Metaverse-specific business model, then call in experts from fields such as communications or creative design.
The luxury goods industry therefore still has some way to go before NFTs become an effective KYC tool and the Metaverse (“this new iteration of the internet”) is able to “convey stronger emotions than in the real world,” says Thomas Tassin. “In the current phase, everyone is experimenting,” sums up Lorenz Bäumer. That’s hardly surprising. Staid luxury brands are feeling around for ways to build gateways between their authentic branded goods and the owners of these goods using the latest innovative touchpoints. These gateways seem like a natural progression to Evelyne Genta, who notes that “the ones passionate about fine timepieces are young people”, who are more receptive to innovative communication channels and who “instead of sporting a smartwatch are on the lookout for one-of-a-kind models”. Moreover, for those luxury brands capable of connecting the past with the ultra-modern, this will undoubtedly be “an additional differentiating factor,” says Caroline Reyl.
Julien Abbou, Chief Digital & Innovation Officer, Digitalli
Lorenz Bäumer, jeweller and founder, Maison Bäumer Vendôme
Evelyne Genta, founder, Association Gérald Genta Heritage
Caroline Reyl, Premium Brands strategy manager, Pictet Asset Management
Thomas Tassin, Chief Operating Officer, Plateforme Métavers Garou