LVMH Group Enters the World of Web3 to Stay Ahead of the Times
“We are not interested in selling a pair of ‘virtual sneakers’ for 10 euros. That is just a purely virtual world, and we exist in the real world, selling real products,” said Bernard Arnault, CEO of LVMH, the parent company of luxury brand Louis Vuitton (LV).
Arnault, despite not being in the tech industry, has made it to the top of the billionaires’ list alongside giants like Jeff Bezos (founder of Amazon) and Elon Musk (founder of Tesla). While he may have had doubts about Web3, it hasn’t stopped LV from actively entering the Web3 space.
In 2022, LVMH recruited Nelly Mensah, former digital strategist at Kering Group (parent company of Gucci), as the head of Web3 and Metaverse. Furthermore, LV also introduced a new role for a digital innovation director focusing on Web3 within the brand.
In recent years, LV has ventured into the Web3 world through games, integrating NFTs, and exploring new consumer interaction models. They have even changed traditional workflows, such as introducing VIA Treasure Trunks, a hybrid virtual-physical trunk that uses NFTs to create a new distribution model, and adopting blockchain technology for diamond provenance.
Mensah has expressed that LVMH itself is open to brainstorming and exploring the value that Web3 can bring to its brands. They often contemplate what is “possible” and what is “realistic,” as well as what the brand should do to prepare for the future.
Despite many unanswered questions, the LVMH Group understands the importance of keeping up with the latest technological advancements to ensure that their century-old brand remains unaffected by time.
Even Arnault himself has said, “What is certain is that Web3 is very interesting, and we must see what the applications of the Metaverse and NFTs are.” LV, as one of the most representative brands under the group, naturally becomes an excellent test subject.
Clothing with Beeple’s artwork! LV’s first encounter with Web3
What exactly has LV done in the Web3 space? It can be traced back to 2018.
In the 2019 Spring-Summer collection created by Nicolas Ghesquière, LV’s creative director for women’s wear, thirteen pieces from digital artist Beeple’s “Everydays” series were printed on the collection. These artworks also served as inspiration for that season’s store window design.
Three years later, Beeple’s artwork “Everydays: The First 5000 Days” was sold as an NFT at a staggering price of $69 million at a Christie’s auction, causing a sensation in the art world. It is worth admiring LV’s early promotion and keen eye for “digital art.”
In addition, in 2019, LV had already dabbled in the concept of the virtual world. That year, the brand collaborated with the popular game “League of Legends” to create exclusive appearances and clothing for virtual characters, laying the foundation for future forays into the Metaverse and gaming.
Using NFTs to attract a younger audience and how LV strengthens its VIP clientele
After venturing into digital art and the virtual world, LV started adopting blockchain technology through the game “Louis The Game” in 2021.
The game was launched to celebrate the 200th anniversary of the brand’s founder, Louis Vuitton. Players could not only learn about the brand’s history but also participate in a lottery to win limited edition NFT collectibles.
Even if not every player is interested in NFTs, the game garnered over 2 million downloads, showcasing the brand’s popularity among young consumers and allowing them to explore LV’s century-old history in a fun way.
The “VIA Treasure Trunks” series, priced at €39,000 per NFT (approximately NT$1.28 million), was launched by LV in 2023. This series brings the brand’s iconic trunk craftsmanship into the Metaverse. The NFTs in this series are sold as “Soulbound,” meaning they cannot be resold to others, minimizing the possibility of price speculation.
LV claims that VIA Treasure Trunks serves as another gateway into the brand’s world, allowing holders to unlock new limited edition products through innovative experiences. Subsequently, LV has also released virtual-physical integrated products exclusively available for VIA Treasure Trunks holders, such as the orange Speedy 40 VIA bag designed by Pharrell Williams, LV’s creative director for menswear.
This unique and high-priced “VIA Treasure Trunks” series, instead of using low-priced virtual clothing to attract young customers like other brands, further solidifies the brand’s high-end status.
Agnes Vissoud, LV’s Digital Innovation Director, stated, “The biggest challenge is how to extend the in-store experience to a world without virtual-physical boundaries.” The ideal solution is a process that starts with the virtual and ends with the physical, providing the same sense of prestige.
LV’s Web3 digital innovation leader, Gordan Djogasevic, shared that creativity, desire for products, and luxury scarcity are not limited to the physical realm. They already exist in the digital realm, such as games. With advancements in new technologies like blockchain, virtual collectibles have become more powerful than ever. “Through the VIA Treasure Trunks NFT project, we want to connect LV with the Web3 world.”
Diamond provenance is also on the chain! How to achieve greater transparency in production?
LV’s actions in Web3 go beyond games and NFTs.
In 2021, LVMH, along with Prada and Richemont Group, established the Aura Blockchain Consortium, aiming to create transparent blockchain-based solutions for production, sales, and product and customer information.
LV’s diamond collection, “LV Diamonds,” set to be launched in late 2023 to early 2024 in Asia, will utilize the Aura blockchain to create diamond certificates that trace the gemstones’ journey from the mines to becoming jewelry. This includes information such as the mining location, gemstone classification, polishing, and setting, all of which will be permanently recorded.
Alexandre Frih, founder of Paris-based tech company Next Decade and former technical project manager at LV, mentioned that the creation of the Aura Blockchain Consortium is not only a response to the ever-changing digital landscape but also a strategy to attract the digitally native generation, as this “new customer base” is increasingly valued by luxury brands.
Furthermore, in terms of regulations, the European Union has included digital product passports as part of its sustainable and circular textile strategy, urging that by 2030, textile products sold in Europe must be required to use digital product passports.
Using blockchain and NFTs as digital product identification methods can prepare brands to comply with regulations while addressing consumer concerns about the authenticity of luxury goods.
Incorporating virtual-physical integrated gameplay! LVMH’s attitude is crucial
LV’s ability to freely explore games, NFTs, and blockchain applications in Web3 is greatly influenced by the support of the LVMH Group.
Since joining LVMH as the head of Web3 and Metaverse, Mensah has encouraged the “princes” of LVMH, who are also the CEOs of major brands under the group, to experiment with NFTs and virtual-physical integration in TAG Heuer, Tiffany & Co., Dior, and other brands.
Mensah also acknowledges the urgent need for LVMH to explore the Web3 space. She stated that most employees are focused on e-commerce platform operations and media budgets, leaving little time to pay attention to other matters. This makes them even more eager to understand the development of new technologies.
In addition, LVMH is also interested in what brands in other industries are doing. They often engage with teams from Coachella, Nike, Starbucks, and other companies to explore how Web3 can help these enterprises and find areas for inspiration.
Frontline employees don’t understand blockchain? Expert: Educating sales staff is the key to success
However, there are various opinions on LV’s actions in Web3.
Eliana Kuo, co-founder of Italian fashion technology group Lablaco, believes that the fashion industry has high expectations for LVMH’s Web3 strategy and development. This is not only due to the group’s leadership position in the Aura Blockchain Consortium but also because LVMH is a pioneer in the luxury retail industry and wields significant influence.
Web technologies, including blockchain traceability, authenticity, royalties, and circularity, have great potential in promoting sustainable growth in the industry.
“However, when you go into a boutique, you will find that very few staff members understand what Aura Blockchain is and how it works. Even if brands adopt blockchain technology, sales teams often lack sufficient training to explain the practical value of Web3. If the sales team cannot effectively communicate the technology, the number of customers who understand it will decrease. This may result in negative feedback and potentially hinder the successful promotion of Web3 technology.”
Regarding the VIA Treasure Trunks virtual-physical integrated NFTs, Kuo believes that there haven’t been many real actions from LV, so it is difficult to judge the pros and cons of this project at this stage. She speculates that VIA is still an internal testing project, and the brand will closely observe whether consumers are interested in these virtual-physical integrated applications.
Kuo bluntly states that if the internal sales team cannot truly understand and actively promote these initiatives, they will most likely quietly fade away. After all, direct sales to customers is still a key avenue for luxury brands to achieve revenue and profit goals.
Nevertheless, even though the fashion industry is moving fast, it is still in the exploratory stage. With the advancement of AI technology and the emergence of Vision Pro, the world in 3-5 years will bring the “virtual world” mentioned by Arnault closer to reality, or rather, the real world will move closer to the virtual world. At that time, there may be another wave of development. It is necessary for brands to be prepared from now on, and it is one of the essential decisions.
♦️ This article is not available for reprinting by cooperating media.
Sources:
Glossy, Highsnobiety, Forbes, Jing Daily
Proofreaders: Gao Jingyuan, Chen Junyi