How blockchain, NFTs and new technologies might change everything for luxury and retail players.
Luxury brands dive into the world of blockchain to prove authenticity, ensure post-supplier traceability and create digital wardrobes.
Non Fungible Tokens (NFTs) are luxury’s newest toy, with key luxury fashion and art players trading in the blockchain.
At KINDUSTRY we take what’s new and next and apply it practically so brands can stay ahead of the cultural and technological curves.
See our take on Blockchain and NFTs below.
Luxury loves to hate the shiny and modern and focus on its monogamous relationships with heritage and tradition. Yet, with consumer’s wandering eyes to newer consumption trends, luxury has started to commit to some pretty advanced technologies. LVMH, Prada and Cartier have recently formed an alliance to offer a blockchain-based service to ensure the purchase authenticity for clients, as the market of counterfeit goods is now worth nearly $1 trillion USD annually. LVMH managing director, Antonio Belloni, noted that “trust is the one key on which our industry is founded and one we really want to preserve [with this new technology]”.
Alexander McQueen is another prime example, as their new diffusion label McQ is a fully tech-integrated brand with blockchain RFID tags embedded into each clothing article. These tags confirm authenticity, ensure post-supplier traceability and register to a digital wardrobe. McQueen collaborated with blockchain company Everledger to allow a decentralized platform for each collection to be designed by a creative collective. Similarly, Burberry enlisted the services of IBM’s interns to also create a blockchain supported application dubbed “Voyage”, which showcased supply chain traceability. There is certainly nothing traditional about that.
Blockchain company provenance takes supply chain traceability to the next level, with crafted storytelling of each stage in producing a product. By “bringing the supply chain to the shopper”, they can create a unique B2C relationship that emotionally connects, and differentiates to other items on the shelf.
The ‘shiniest’ toy as of late is an ‘NFT’. Non Fungible Tokens (NFTs) are units of data stored on a digital ledger such as a blockchain, that verifies a digital asset as unique and not interchangeable. NFTs can be used to represent items such as photos, videos, audio and other types of digital files. Fashion and art have been the newest luxury sectors to adopt NFT trading and collectibles for tech-savvy consumers. While the bigger luxury brands are easing into NFTs, many smaller retailers have already jumped into marketplaces like OpenSea, Nifty Gateway and KnownOrigin.
Gucci recently confirmed that it’s “only a matter of time” before it will release an NFT. Gucci has already collaborated with Belarus-based fashion-tech company, Wanna, to create $12 digital sneakers for virtual try ons which are close to emulating offline shopping. Farfetch and Browns Fashion also recently launched virtual try-on watches in collaboration with Chopard. Wanna CEO, Sergey Arkhangelskiy, told the Business of Fashion that NFT and AR technology will only continue to grow in the near future and that “in five or maybe 10 years a relatively big chunk of fashion brands revenue will come from digital products.”
In the art world, world-renowned photographer Mario Testino is selling his famous prints as NFTs, as did Kate Moss in a recent charity sale. NFTs are currently taking the art market by storm, with one by the artist Beeple selling for $69 million that helped explode the market. Even before the hype of cryptocurrency, ephemeral content mesmerised the art scene with artists selling certificates of ownership of their work. No one can forget Maurizio Cattelan’s banana duct-taped to the Frieze Miami wall fetched a cool $120,000 at the end of 2019. Cryptocurrency unlocks a new dialogue between creators and collectors, without barriers or central authority, bringing art ownership online and redefining who the arbiters are and what fine art really is.
The latest technological luxury innovations by top luxury brands are generating conversations at KINDUSTRY and causing us to look at the bigger picture. Is it because luxury needs to innovate to survive, or are these technologies actually allowing for brands to organically perform into a new tech-based ecosystem? How do these tactics fit into their long term brand strategy?
KINDUSTRY’s take:
At KINDUSTRY we take what’s new and next and apply it in ways that are authentic to brands and their corporate realities, while pushing into more progressive spaces to capture new growth opportunities.
The introduction of blockchain into these leading luxury companies demonstrates internal agility and the mindset for change. There is an immediate association to ‘current’, ‘innovative’ and ‘barrier-breaking’ and the opportunity to connect to a modern, culturally-advanced and valuable audience. Participating in what is next creates a progressive halo and perception for the brand.
Brands need to adopt new technologies or progressive trends in a way that is authentic to their visions, promises and capabilities. Adopting these changes at scale immediately, however, need not be the objective. Testing them through capsule collections, collaborations, or with a focus on the most receptive audience within your target market is a fantastic place to start.
What seems to be far off on the horizon and seemingly irrelevant to the brand and its business is generally accelerating at twice the speed as it may appear. Transformative change happens slowly then all of a sudden. Covid has shined a light on brands that have fallen significantly behind in areas of sustainability, digital commerce, cultural progressiveness and are now scrambling to get up these important curves during a very complex time.
