Why Web 3.0 and Luxury work hand in hand?

Written By Melina Tag

On one side, Web 3.0 is currently having a major impact on all aspects of the company. Whether it is technology, security, strategy or marketing, all companies are witnessing a transformation comparable to the Internet in the 2000s.

On the other side, luxury companies specifically are noticing major trends:

  • 80% of global luxury purchases by 2030 are expected to be driven by the younger generations (Y, Z, and Alpha), solidifying their significant presence in the market. (Robb Report).

  • 87% of Gen Z consider themselves gamers (Deloitte).

  • Gen Z recognises very little distinction between the online world and the physical world (Center of Generation Kinetics).

Those key insights highlight the incredible shift that is happening with the younger generations, pushing luxury brands to pay attention to this emerging technology.

To help luxury brands navigate this new paradigm, it is necessary to understand the commonalities shared by the brands and Web 3.0:

 

1) Exclusivity

Luxury brands curate limited edition products and provide exclusive experiences to their clientele. Web 3.0 leverages blockchain technology to establish value for their digital assets by embracing scarcity and restricted supply.

 

2) Quality

The luxury sector is renowned for its meticulous attention to detail and commitment to exceptional quality, while blockchain protocols prioritise security, transparency, and reliability as their core principles.

 

3) Community

Luxury brands cultivate communities of individuals who share a deep appreciation for their products. Web 3.0 is inherently rooted in the concept of community, making it a fundamental aspect of its ethos.

 

4) Innovation

Luxury brands allocate significant resources to research and innovation in order to design new products and exceptional experiences. Web 3.0 is founded on state-of-the-art technologies such as blockchain, smart contracts, and decentralised finance.

 

With this in mind, it is important to also comprehend the challenges that the luxury industry faces

  • There is a race for audience attention. The Internet and social media specifically are flooded with content. How can a brand emerge and grasp the attention of its clients? How can brands depend less on social media to attract and engage with customers in a more authentic way?

  • Brands face major issues when it comes to CRM data. Client databases are missing crucial information and are often lacking in quality.

  • Counterfeiting is also one of if not the most prevalent issue the luxury industry has had to face since its start.

 

Those Web 3.0 and Luxury commonalities paired with the understanding of the Luxury challenges can point us to 3 main topics where Web 3.0 and Luxury intersect. In fact, it is possible to find the perfect synergies:

 

1) Authenticity

Web 3.0 can enhance authenticity for luxury brands by using blockchain technology to ensure provenance, to verify product information and to keep records of ownership. This improves transparency, reduces the risk of counterfeiting, and fosters customer trust.

 

2) CRM

Web 3.0 offers luxury brands a range of CRM benefits. Digital collectibles can represent ownership, allowing brands to reward loyal customers with unique digital or physical utilities. Brands don’t interact with clients anymore, they interact with a community. Personalization becomes more effective as Web 3.0 enables better customer data management. Moreover, Web 3.0 allows brands to access customer data they didn’t have before such as purchasing power, risk level, competitor purchases and engagement levels.

 

3) Customer Experience

Web 3.0 enables brands to bridge the gap between the physical and the digital. The product goes beyond its physical constraints and gains a digital utility. It empowers luxury brands to revolutionise customer experiences by giving exclusive access through tokenized memberships, creating a sense of privilege and loyalty amongst customers. In addition, an immersive experience of the product is made possible through digital activations and augmented reality, allowing customers to engage with the history of the brand, its savoir-faire, and brand experiences in a highly interactive and personalised manner.

 

At APC Labs, we offer Web 3.0 and AI solutions to luxury brands to enable those 3 synergies. If you are interested in enhancing your brand using cutting-edge technologies, don’t hesitate to contact us.

Melina Tag
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