Luxury is definitely one of the hottest sectors in the Web3 universe. From Burberry’s virtual avatars, to Gucci’s Roblox residences, via Prada’s Chinaverse, the biggest houses do not hesitate to build a real empire on the Web3, especially with the aim of building a new customer experience.
But it seems that Streetwear, sometimes competitor or partner seems to be able to compete. Generally known for its colorful signatures – artistic collaborations, capsule collections, limited editions – streetwear is doing well and looks set to shake up the fashion and luxury segment. What are three things streetwear is developing in the digital fashion game that mainstream luxury can learn to copy?
Traditional marketing strategies are not enough in Web3: rethink the customer experience differently.
Luxury houses today cannot simply replicate their traditional marketing strategy in the Web3 world. Just look at the last virtual Fashion Weeks in Decentraland, which showed their limits to the public due to low graphic quality and connection problems. Jason Wu and Dress X’s Michelle Obama dress, valued at 8.5 ETH (about $13,600 USD), which came with two tickets to Wu’s fashion show, did not go up for auction, indicating buyers’ reluctance to pay prices of excessive for solo events.
Web3 is leading brands to rethink the customer experience and reinvent their distribution channels. To create relevance on the Web3, then it becomes essential to arouse the interest of the customer through alternative routes, unique or avant-garde strategies and not a simple parade or a simple copy of a trendy item.
The key element of Web3 strategies in the streetwear universe? Appetite for riskwhich luxury houses must grasp without delay: being bold, innovating and going outside the box are all values at the heart of the development of the Web3 ecosystem and the expectations of GenZ.
Examples of such pioneers include next-generation streetwear collective HapeBeast NFT, which envisions a “digital playground” where users are equipped with the necessary resources and tools in the metaverse; Cult & Rain’s ambition to provide a luxury experience to its loyal, streetwear-focused community; Nike acquisition of virtual leader RTFKT in 2021; and KITH’s collaboration with Invisible Friends, one of the first figital projects to gain mainstream attention. In short, it’s about staying one step ahead.
Community, the central pillar of Web3 strategies.
While luxury uses its model of scarcity and desire to maintain excess demand over supply, it derives its exclusivity from enhanced offline shopping experiences and largely unattainable high prices. The streetwear franchise, on the other hand, is subject to belonging to a knowledge community to receive the latest innovation. Surprisingly, the latter is preferred in Web3.
The streetwear and NFT universes are quite similar in this respect: both are worlds that thrive on their ability to turn goods like sneakers and handbags into collectibles. Excitement and rarity also connect: take the excitement people get at the release of new limited AirJordan pairs, it’s similar to that of Dogami holders for example. Both represent cultural movements that are revolutionizing the fashion industry, celebrating creativity, community and storytelling in their campaigns.
Most importantly, they both support young creators to give them a voice in their community. Earlier this year, the Hape NFT collective lit up Times Square with a series of animations designed by various artists. This marketing stunt emphasized the community that is at the heart of the brand. Valuing larger NFT collections is the result of the brand’s commitment to giving its followers a space to connect, share ideas and feel part of something bigger than the average consumer. Community is the real glue of Web3, and we’re already seeing new Web3 brands created through their community like RTFKT and Bored Ape Yacht Club. In a way, the community becomes the creator of the brand and the luxury houses are ready to perceive the interest. Just look at Gucci’s initiatives, for example through Gucci Vault or even Tiffany&Co. who quickly realized the interest of talking to this new generation of luxury consumers.
A long-term strategy to think about now to build tomorrow’s Customer Experience.
With such an emphasis on people’s feelings and reactions, followers are taking to social platforms to share, like and promote the brand’s projects, strengthening its visibility and relationship with the consumer.
Develop strong and diverse ecosystems it is a top priority for streetwear and NFT cultures to make customers feel part of the brand. Luxury homes have achieved this in the traditional sense, but not on Web3, where communities are more interactive. And that is the challenge for the coming months and years, to take the digital transformation curve for certain historical brands and take it sustainably in the service of a new brand experience.
The real question luxury houses need to ask themselves is: what are they willing to give their fans? The Web3 community is about empowering community more than business, but are homes ready for it?
Take the example of metaverse which aims to give users a democratized space to socialize and join forces. Today, most luxury house experiences in the Metaverse are incomplete: they try to sell NFT at a lower price than the physical market, like $12 Gucci NFT shoes, but with no after-sales experience. The question of utility then becomes central in the same way as that of community: what collectors are increasingly looking for is a value that allows them to unlock future advantages and VIP access, an exclusive experience, few fingers out of reach .
The Metaverse offers a clean sweep of the fashion industry, which may also terrify some traditionalists. While some luxury names are beginning to recognize the impact of Web3, others must be open to adopting more innovative strategies, putting community before profit, and be ready to leave their egos at the virtual door.
In early 2022, investment bank Jefferies reported that the NFT market would reach over $80 billion by 2025, offering huge prospects in the luxury industry. Tokens, NFTs, metaverses are just the starting point, it is a new way to expand the way the brand intends to engage with its community and make it experience new sensations. If a token unlocks other benefits and long-term utility, holders are more likely to be brand loyal. Luxury houses must now be inspired by the best and find the best version of themselves on Web3 to make a long-term commitment in line with their raison d’etre.