how the luxury sector enters the virtual promised land

After Paris, London or Milan, the new ‘location’ of the next Fashion Week is the metaverse. A virtual Eldorado that has already captivated the world of luxury enough, to be measured by the illusion with which the great houses have been installed there.

Balenciaga caused a sensation with the presentation of the spring-summer 2022 collection. Not a traditional show, but a virtual performance, staged like an episode of The Simpsons, with VIP avatars and friends of the brand in the audience of the digital show. To some, this was just a clever move by designer Demna Gvasalia to challenge the established codes of the luxury world. In fact, it was a preview of what awaits the industry in the future. Not because Matt Groening’s yellow figures are making their way into haute couture from now on, but because the fashion world is busy exploring this still relatively untouched and therefore up-and-coming area of ​​the metaverse. Proof of this trend was also the announcement of the first Fashion Week in the metaverse, at the end of March 2022. And all while the world of fashion had just started again with physical performances after two years of the pandemic. This version of Fashion Week, which will take place on the Decentraland platform, presents the presentation of the virtual collections, shown by the most trendy avatars of the metaverse. Just like during real fashion weeks, there are also a number of virtual after parties and boutiques to visit. It is also indicative of the spirit of the times that François-Henri Pinault, CEO of the Kering group, announced in the announcement of the operating results for 2021 that the group now has an entire team dedicated to the metaverse and two additional specialist teams at Gucci and Balenciaga.

In this virtual universe, a square meter is sold even more expensive than in the real world

A new world

Initially, however, the metaverse seemed anything but destined to become the new favorite playground of the big luxury players in the world of fashion. On the contrary. In 1964, this virtual world was first addressed in the novel Simulacron-3 by Daniel Galouye. Thirty years later, the subject was taken up by American science fiction author Neal Stephenson, who made it the setting for his virtual Samurai, a dystopian novel in which a wealthy businessman creates a universe in which virtual reality and augmented reality are abused to better control users’ actions.

© ROBBIE VAN MIERLO

That vision has little to do with what the metaverse is today, something between a trend development laboratory for the big brands, a meeting place for techies and a fantastic Eldorado for a sector that is clearly untouched by the crisis. In the midst of the pandemic, major luxury players posted record results in 2021, with profits up as much as 44 percent. This trend continues in the metaverse. Because not only the big names in the world of fashion queue up to take their first steps. Even the Sotheby’s auction house ‘opened’ a virtual branch there. In this virtual universe, a square meter is sold even more expensive than in the real world. For example, Tokens.com, which specializes in decentralized finance ( DeFi), recently purchased a 566-square-foot piece of land for the “modest sum” of $2 million. New York company Everyrealm spent a record $4.3 million on a site on the platform the sandbox† Parisian trend agency NellyRodi has also ventured beyond the limits of reality and opened an agency in the metaverse. It turns out to be a natural move for those who are busy forecasting future trends on a daily basis.

In addition to being a fun activity, it is also a way to set an example for customers. “It is impossible to understand the metaverse without involving reality, because it is still something very abstract. But you see a growing interest among our customers. They feel that something is happening, but they still don’t know if it is a tree or a shit they will be They cannot estimate if it is mere speculation and falsehood”, said NellyRodi. There is a general consensus that financial and media opportunities are there for the taking in the metaverse for the luxury sector. “If only because you can make your image fresher by responding to the new generation’s way of working. But also because it opens up a sea of ​​possibilities with new sensory experiences and very interesting perceptions”.

virtual butterflies

The well-known Printemps department store is also aware of this, which, in addition to its emblematic building on Boulevard Haussmann and its online boutique, has already opened a virtual store in the new Valhalla. An excellent opportunity for the company to continue with its innovative image, which it has maintained since the 19th century, but also an opportunity to reinvent itself. “The metaverse offers a new form of reality that complements the physical reality and the pre-existing digital worlds. In this way, we can give our customers a bit of magic and make them live a dream”, says Stéphane Roth, Groupe Printemps Communications Director. At first, the brand of the multi-brand store was played with for this. In the virtual version, it is presented as a garden in full bloom, with lush green storefronts and butterflies fluttering in your wake. It is a way of Printemps to demonstrate that the virtual does not detract from the concept of luxury. Far from even. That is, if you see luxury as synonymous with “demand, eye for detail and the art of creating an immersive experience”, as Roth says.

In a world suffocated by fast fashion, people want to be surprised again. The advantage of the digital world is that it has no limits’ Ann Claes

It is a vision that is also endorsed by Ann Claes, co-founder of the digital fashion agency Mutani: “Luxury is related to the value that you assign to something. Just because that value is digital doesn’t mean it’s not there anymore. Exclusivity is one of the ways to approach luxury. And the metaverse is perfect for creating the feeling of having something unique, whether it’s NFTs or private events.”

Vincent Grégoire of NellyRodi, responsible for embedding the agency in the metaverse, points out that “everything that has acquired iconic status in the luxury segment was initially disruptive. The metaverse offers us the opportunity to breathe new life into that system and once again choose the path of ‘taking risks’. Luxury had become tedious, arrogant, complacent; started on the spot, with tributes inspired by the archives, while the essence of the sector is at the forefront, at risk.”

Risks warned by Ingrid Poncin, professor at UCLouvain-FUCaM Mons and specialized in digital marketing. “The idea of ​​luxury is to offer the opportunity to experience something extraordinary, something exclusive and rare. In that sense, the metaverse and associated technologies create the opportunity to wow customers. But it remains to be seen whether those customers are willing to release their data to enter these universes. In that sense, the metaverse is a great opportunity for marketers, but not so much for consumers. Because thanks to artificial intelligence, many personal characteristics of users can be entered, perhaps also properties that people would prefer not to show.”

The magic of the metaverse
© ROBBIE VAN MIERLO

everything is possible here

The transition to the metaverse is not without dangers for the brands themselves. Cyber ​​attacks, fake sales, beating or, worse yet, “losing your soul” are just some of the dangers that NellyRodi also warns about. “The most important thing is to make the right decisions from the beginning, that is: knowing who you are as a brand, why you are there and how you want to be there.”

“The audience that visits the metaverse is not necessarily the same as the traditional luxury shopping audience,” explains Mutani’s Ann Claes. She sees a great opportunity in the metaverse to attract new potential clients, as long as there is intelligent communication. “We need to avoid introducing brands into the metaverse as a cheap way to make more money. For now, the main users of the metaverse are cryptocurrency investors, not fashionistas. Brands have to take this into account, because authenticity is very important for this last group. Finally, Ann Claes stresses that in a world suffocated by fast fashion”people want to be surprised again. The advantage of the digital world is that it has no limits in terms of shapes, materials and sizes”. A dream for fashion designers, therefore, who can freely express their creativity without encountering the limitations of the real world. So the message is to explore that gigantic and still unknown territory as soon as possible.

learn words

Do you master the language of the metaverse? Below is a small glossary to translate this new universe into understandable concepts.

–Avatar: representation of an Internet user in the virtual world, in 2D or 3D.

– Blockchain: a system for storing data in a chain of data blocks, in which the blocks cannot be changed.

–Metaverse: network of interconnected 3D virtual spaces in which users can navigate and interact interactively, often through avatars. In addition to virtual worlds, it also includes augmented reality and the Internet.

–NFT: Abbreviation for non-fungible token (non-replaceable or unique token). It involves the link (a type of ownership) on a blockchain from an account to a unique and authentic (non-tradeable) digital item through a digital contract.

–Second Life: free 3D metaverse launched in 2003 that allows users to embody virtual characters in a world they create.

– Skeuomorphic: Virtual objects that have the shape of real objects, but are not.

What about counterfeiting?

The legal framework surrounding the metaverse is still quite confusing. “The problem is that the law that governs the metaverse is related to the terms and conditions of use of the participating company. Therefore, it cannot be assumed that traditional jurisprudence applies there”, says Ingrid Poncin. However, some go to great lengths to enforce the law. For example, Hermès filed a lawsuit against Mason Rothschild, who launched the MetaBirkin project on the OpenSea platform: 100 virtual replicas of the iconic Hermès bag, the first model of which sold for $42,000, six times the average price of the real-world equivalent. world. The argument that he wanted to do something similar to Andy Warhol’s lithographs on Campbell’s soup cans did not convince Hermès. Nike also filed a complaint against the distributor of NFT sneaker models StockX, which according to Nike amounts to counterfeiting of its products. Both procedures are still ongoing, but it seems that the law is on the side of the brands, assures the Paris office Beaubourg Avocats: “The manufacturer of an NFT (non-fungible token, ed.) must be in possession of a transfer of rights From author. contract that authorizes the transformation of the original work in NFT format to avoid responsibilities”. The argument of an artistic approach would also be inadmissible if it turns out that “an NFT cannot be equated with an original creation, since its creation is through a process of tokenization Y coinage, digital processes that do not imply originality and that do not imply a creative process stamped with the personality of the author”.

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