Web3 and The Future of Luxury, Part II: Phygital Exclusivity
This is the second of a three-part series examining phygital experiences in the luxury space. Read Part I here.
Membership has its privileges. Gucci’s Aria Collection, 2021.
The out-of-the-blue explosion of NFTs last year left the concept ripe for punchlines. Nay-sayers often pooh-pooh digital tokens, claiming they are just easily copied JPEGs. The problem with this thinking is that it ignores the value of authenticity and exclusivity. It is akin to saying that a deed to a house in Beverley Hills is just a piece of paper that can be photographed, scanned, or copied in many ways. The deed is not the property but rather the proof of ownership.
NFTs act the same way. They are tokens that represent ownership and authenticity. Though you may be able to drag the file they link to onto your desktop, the NFT itself cannot be copied (hence the non-fungible part).
Why is this important? Aspirational goals for the NFT aside, the desire for exclusivity has not waned. Rather, it’s just being redefined. Instead of seeing NFTs as a commodity, smart brands recognize them as unique tools. To survive these changing values, brands must recast their products not solely as physical goods, but as covetable experiences.
Among the luxury purveyors, the fashion industry has understood this the best. Some of the first to jump on the NFT bandwagon, fashion brands have seen beyond the JPEG to understand the changing role of exclusivity in luxury marketing, as well as the changing demographic.
In May 2021, Gucci became the first Maison to mint an NFT, a 4-minute video inspired by its 2021 Aria collection (the film, auctioned off by Christie’s, sold for $25,000 USD). Since then, brands have discovered ways to use NFTs as exclusive perks available to loyal customers. For example, in Summer 2021 Dolce & Gabbana released a 9-piece collection of NFTs titled Collezione Genesia. Inspired by the rich history of Venice, the tokens were auctioned on the UNXD platform netting a cool $5.56 million USD. Winners not only received the NFT, but also a physical version of the item, as well as exclusive access to the fashion house’s Alta Moda, Alta Sartoria, and Alta Gioielleria events, which took place in Venice that August.
Pizza-themed NFTs by CHFTY.
This new kind of brand rewards program offers unique access to entice tech-conscious consumers across a range of industries. Even restaurants have joined the fray aimed at both the mass market as well as elite clientele. In December 2021, celebrity chefs Tom Colicchio and Spike Mendelsohn entered the space with a release of 8,888 pizza-themed NFTs called CHFTY Pizzas. Valued at approximately $200 each, the tokens offered more than just cute and cranky pizza-shaped characters—they also granted access to a community connecting NFT owners with their favorite chefs through online masterclasses and events (both virtual and IRL).
Entrepreneurs David Rodolitz, Gary Vaynerchuk and chef Josh Capon are offering a similar exclusivity in their new venture, the Flyfish Club. Dubbed the “World’s First NFT Restaurant,” the club uses the NFT token as a kind of key to an elite member’s-only club that has yet to be built. Despite not knowing its exact location, consumers gobbled up all 1,500 NFTs released to the public mere minutes after launch. The NFTs originally ranged in price from $8,000 to $14,000 (depending on the level of access) but are now netting nearly double that on the secondary market. Again, all this, even though they have yet to break ground on the actual space.
And if a tribe of 1,500 is still too much for you, how about a tribe of one? In that case, Chotto-Matte is offering a single NFT dubbed The Founder. The purchaser will receive a personal invitation to global restaurant openings, as well as first-class flights and accommodations, exclusive at-home experiences, and more. The price: a mere $1 million USD. But hey, membership has its privileges.
Even perfume is getting into the phygital game using neurotechnology that allows you to find the fragrance that is uniquely you. Partnering with neurotechnology company EMOTIV, L’Oréal is allowing customers at its Yves Saint Laurent flagship stores to don an EEG headset that reads their brain’s electoral activity as they sample various fragrances. In essence, the technology identifies how each scent affects personal emotions allowing customers to swiftly narrow in on a fragrance personalized to their individual needs.
The role of the NFT to create phygital access is key to all these examples. The token itself is not the asset. Nor is the physical product, be it a meal, a fragrance, or a dress. Rather, the asset being purchased is the unique, curated experience to which the purchaser is given exclusive access. Instead of showcasing luxury products to symbolize cash-filled wallets, Gen Z consumers instead flex with digital wallets that assign them the status of early adopters with a class of products they alone own and understand.
As the spending power of Gen Z rises, their quest for statements of individuality and authenticity will rise with it. Luxury brands have a choice—move with them into the phygital world or languish behind it.
Perfume as unique as you are. L’Oreal uses EMOTIV’s neurotechnology to home in on which scents make sense.
