Q. In your view how will Web3 economy impact the industry as an additional driver of change in an already rapidly evolving scenario?
From Omnichannel to Immersive experiences
I.A: Web3 is shaping a new economy providing the opportunity to build an additional source of revenue for luxury companies.
To reach untapped audiences and recruit new generations of customers, luxury brands are racing to meet them in their native environment, the Metaverse.
The Metaverse represents a new interaction point, requiring fashion brands to adapt both their tone of voice to the conversation within the space, and to find new ways to monetize these virtual worlds by adapting traditional revenue drivers and strategies.
Even if a fully formed metaverse (a massively scaled and interoperable network of real time rendered worlds which can be experienced synchronously by an unlimited number of users with an individual sense of presence) — doesn’t yet exist given technology constraints, luxury players are gearing up to develop communities in the space that will help build trust and drive their revenues in the future.
Understanding today’s early adopters will help brands predict and profile tomorrow’s virtual-goods buyers.
In the last 12 months we have seen major luxury players building experiences across different Metaverse platforms following a trial-and-error approach. Brands that I see being successful in this environment are the ones that will learn to adapt and build the future of the brand experience and products in the space, together with newly created communities.
I believe the next step will be for industry leaders to move from one-off initiatives and marketing stunts to focus on how to make the space a sustainable source of revenue. Imagine if brands were able to launch digital collections virtually 5 or 6 times per year - as they do in the real world - across different platforms.
Meanwhile, the most forward-thinking brands are focusing on creating demand. Gucci created a bespoke collection aimed only to dress the Bored Apes Yacht Club PfPs. That is a good example of a brand successfully building demand in the space by dressing the resident celebrities as it would in the real world. But there is still a gap between people experiencing the Metaverse vs people buying in the metaverse.
A recent study conducted by Valtech future studio highlighted how only 10% of people visiting a Metaverse worlds have actually purchased something.
Nevertheless, the Metaverse has already impacted fashion companies across the full the fashion cycle (digital twins, virtual try-ons, holograms, 3D modelling production, virtual body scan fitting and more...) and it will also reshape the landscape of retail. From physical shopping experiences, to dramatically changing the way we connect and experience the store, it is blurring the lines between content and product.
I believe that traditional Omnichannel services will evolve into fully immersive shopping experiences. Digital and physical worlds will ineluctably interconnect, and brands will need to ensure a seamless transition between both worlds.
Full adoption will come in a few years and the pace of it will be determined by technological advancement, the interoperability between virtual environments and social acceptance.
Depending on their long-term vision and revenue goals, brands will need to decide the level of investment they are willing to make, to develop and integrate the technologies that will enable them to grow and support this customer evolution.
The success metric for these companies will be in finding a way to own that end-to-end experience. From strategy to technology to organisational change… each of the elements will need to work in concert to make a lasting business impact.
We hope that you found this article valuable, and that it sparked the inspiration to review some of your own activities. With more than 15 years of experience delivering on and offline strategies for the luxury industry across Asia and Europe with companies including the Net a Porter/Alibaba joint venture, Christian Dior and La Perla, Ilaria works alongside our luxury client portfolio to support their digital transformations. If you want to continue the conversation, please reach out to her.