NFTs, Culture, and Luxury Brands

NFTs, Culture, and Luxury Brands

In the year 2021, multiple studies found that Youtuber is the most popular job that children aspire to be when they grow up. Long gone are the days when children would mention quintessential professions such as Doctors and Astronauts, the younger generations have figured out that creating obnoxious vlog content on the internet will garner a lot more fame and money — thanks, Paul brothers!

Here are the quick takeaways:

  • NFTs’ most pragmatic use case is tapping into the innate human behavior that seeks exclusivity and status.
  • NFT brands need to be honest and admit that their primary value add is tied to their brand, just like luxury goods.
  • Most NFT brands focus too much on the digital experience, which will be the biggest strategic mistake.
  • Creating experiences that combine physical and digital space via NFTs will be the true value unlock.
  • NFT use-cases in other sectors won’t grow until the regulatory landscape matures.

Fame > Wealth in 2022

There was an old saying: “true happiness in life is to be rich and anonymous”.

https://techcrunch.com/2021/10/25/marcy-venture-partners-cofounded-by-jay-z-just-closed-its-second-fund-with-325-million/
https://techcrunch.com/2020/11/19/ashton-kutchers-sound-ventures-targets-150m-for-third-fund/

The Rise of NFTs

If 2020 was the year when NFT started gaining traction, 2021 was the year when NFT truly experienced its bull cycle. What started as an experiment to generate on-chain verifiable, unique pixelated profile pictures and breeding digital cats quickly became a multi-billion dollar market where market participants threw in their mortgage down payment to become a part of an exclusive group of monkey picture owners.

https://dune.com/hildobby/NFTs

Luxury Brands & Culture in 2022

The luxury space is a $1.3 trillion industry. Out of the top 10 wealthiest people in the world, luxury is the only industry other than tech, finance, or manufacturing that has put an individual on the list. In fact, Bernard Arnault of LVMH has placed the #1 spot a few times, surpassing Gates, Musk, and Bezos. This shows that the luxury industry was not “disrupted” by technology but instead enhanced as people can now signal their status across the digital space, not just physical.

  1. understanding culture
  2. maintaining the customer bond and experience
  • NFTs linked to physical products
  • NFTs linked to virtual products
  • Smart contracts that give revenue from secondary sales
Gucci x 100 Thieves Collection
Alexandre Arnault Converts His CryptoPunk Into a Jewelry

Combining Physical & Digital

Dolce & Gabbana revealed its 9-piece unique Collezione Genesi NFTs in August 2021 and generated approximately $5.7M in sales. Buyers received both the NFT and physical versions of the item and gain exclusive perks which include access to future Dolce & Gabbana events. This is a great example of combining physical and digital experiences.

  • Access to future events and runway shows.
  • Early peek and access to future collections.
  • Complimentary 2 nights stay in the Bulgari Resort Bali every year.
  • Digital rights to use Bulgari items in the metaverse.
  • Access to future investment or commercial opportunities.
  • Access to an automatically established secondary market
  • The NFT itself becomes an “asset” and is fully owned by the owner, unlike a traditional membership card. (The endgame is for the legal rights to be embedded on the blockchain also).
  • Interoperability with the DeFi market, including lending-borrowing.
  • Seamless access to a global audience.
  • Future integration with metaverse projects.

NFT Value Proposition: Being a Part of an Exclusive Club

NFT collections, whether it be profile pictures or generative arts, need to strategize their roadmap and think “like” a luxury brand — however, it doesn’t have to position itself at a super expensive price point or become the penultimate form of luxury. Any sense of belonging or exclusivity will work. Patagonia isn’t a “luxury” item but it has a unique identity built around it. Supreme isn’t a traditional “luxury” brand but its box logo t-shirt will sell for $1,000 in the secondary market thanks to streetwear culture.

Land of the Rising Sun

Lots of tragic things came out of Japan in the past week. Former Prime Minister Shinzo Abe was assassinated and the creator of the Yu-Gi-Oh anime/trading card game, Kazuki Takahashi, passed away from drowning. I grew up playing Yu-Gi-Oh competitively, even becoming the champion of my elementary school tournament; maybe the nostalgia is why I mentioned it in the same sentence with Shinzo Abe. Seeing such a horrible act committed in a country where gun deaths are extremely rare is very concerning. It seems that the world is becoming more volatile than ever. Witnessing these untimely deaths have always grounded me on what’s important. The feeling is similar to when Kobe passed away in 2020. It made me realize what is truly important in life. Working hard is a must, but always remember to spend time with the people you care for and take care of your health.

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Marco Manoppo

Marco Manoppo

Research Director @DAR_crypto. Writing crypto, investing, venture building, strategy, and life musings. A pragmatic dreamer.