LVMH Group Ventures into Web3: Staying Ahead of Time to Preserve a Century-Old Brand
“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 reality, selling real products,” said Bernard Arnault, CEO of LVMH, the parent company of luxury brand Louis Vuitton (LV).
Arnault, although not from the tech industry, has managed to rank alongside giants like Jeff Bezos (founder of Amazon) and Elon Musk (founder of Tesla) on the rich list. While he may have had doubts about Web3, it hasn’t stopped LV from actively venturing into this realm.
In 2022, LVMH hired Nelly Mensah, former digital strategist at Kering Group (parent company of Gucci), as the Head of Web3 and Metaverse. And even under the LV brand, there have been roles for digital innovation in the Web3 space.
In recent years, LV has entered the Web3 world through gaming, integrating NFTs, and other means, opening up new modes of consumer interaction and even changing traditional workflows. For example, they launched the VIA Treasure Trunks, a hybrid physical-virtual trunk that utilizes NFTs to create a new distribution model. They also adopted blockchain technology for diamond traceability, among other initiatives.
Mensah once said that LVMH is passionate about exploring the value that Web3 can bring to its brands. They often think about what is “possible” and what is “realistic,” as well as what the brand needs to do to prepare for the future.
While there may still be many questions, LVMH knows that it must keep up with the latest technological developments to ensure that its century-old brand is not eroded by time.
Even Arnault himself said, “It is certain that Web3 is very interesting, and we must see what the applications of the metaverse and NFTs are.” As one of the most iconic brands under the LVMH umbrella, LV naturally becomes an excellent experimental target.
Clothing featuring Beeple’s artwork! LV’s First Encounter with Web3
What exactly has LV been doing in the Web3 space? It can be traced back to as early as 2018.
In the 2019 Spring/Summer collection created by Nicolas Ghesquière, LV’s Women’s Artistic Director, 13 pieces from digital artist Beeple’s “Everydays” series were printed and used as inspiration for the season’s store window displays.
Three years later, Beeple’s “Everydays: The First 5000 Days” was auctioned off by Christie’s as an NFT for a staggering $69 million, making waves in the art world. LV’s early promotion and keen eye for “digital art” deserve admiration.
In addition, LV had already incorporated the concept of the virtual world in 2019. The brand collaborated with the popular game “League of Legends” to create exclusive appearances and outfits for virtual characters, laying the foundation for future forays into the metaverse and gaming.
Using NFTs to Attract Young Audiences: How Does LV Strengthen Its VIP Customer Base?
After venturing into digital art and the virtual world, LV started using blockchain technology in 2021 through the game “Louis The Game.”
The game was released to celebrate the 200th anniversary of the brand’s founder, Louis Vuitton. Players not only get to learn about the brand’s history but also participate in a lottery for limited edition NFT collections.
Even if not every player is interested in NFTs, the game garnered over 2 million downloads, showcasing LV’s brand recognition and successfully introducing the century-old brand to younger consumers in a fun way.
The “Virtual-Physical Integration” Trunk Priced at NT $1.28 Million
In addition to attracting a younger generation with NFTs and gaming, LV also aims to solidify its existing high-end VIP customer base.
In 2023, LV launched the “VIA Treasure Trunks” NFT collection, bringing its iconic trunk craftsmanship into the metaverse. This limited supply NFT is priced at 39,000 euros (approximately NT $1.28 million) per piece.
Notably, this collection is sold in a “Soulbound” manner, meaning that VIA Treasure Trunks NFTs cannot be resold to others, minimizing the potential for price speculation.
The official statement 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 also released integrated virtual-physical products exclusively available for VIA Treasure Trunks holders, such as the orange Speedy 40 VIA bag designed by LV’s Men’s Artistic Director Pharrell Williams.
This creates a new “VIP-exclusive distribution” consumption model.
Contrary to other brands’ approach of attracting young customers with low-priced virtual clothing, this unique and high-priced “VIA Treasure Trunks” further strengthens the brand’s high-end status.
Agnes Vissoud, LV’s Director of Digital Innovation, said, “The biggest challenge is how to extend the in-store experience to a world without physical boundaries.” The process of first being virtual and then physical, while still enjoying the same sense of prestige, is the best solution.
LV’s Web3 Innovation Digital Lead, Gordan Djogasevic, shared that creativity, desire for products, and the scarcity of luxury goods are not limited to the physical realm; they have long existed in the digital realm, such as in gaming. The advancement of new technologies, such as blockchain, has made virtual collectibles more powerful than ever before. “Through the VIA Treasure Trunks project, we aim to connect LV with the Web3 world.”
Diamond Traceability Goes on the Blockchain! How Does LV Achieve Greater Transparency in Production?
LV’s actions in Web3 go beyond gaming and NFTs.
In 2021, LV’s parent company, LVMH Group, partnered with Prada and Richemont Group to establish the Aura Blockchain Consortium, dedicated to creating transparent blockchain solutions for production, sales, product information, and customer data.
The “LV Diamonds” collection, set to launch in Asia at the end of 2023 and the beginning of 2024, will utilize the Aura blockchain to create diamond certificates that trace the gemstone’s journey from the mine to becoming a piece of jewelry, recording information such as the mining location, gemstone classification, polishing, and setting location, among others, permanently.
Alexandre Frih, founder of Paris-based tech company Next Decade and former LV technology project manager, pointed out that the creation of the Aura Blockchain Consortium not only responds to the challenges of the ever-changing digital environment but also serves as a strategy to attract the digitally native generation, as luxury brands increasingly value this “new demographic.”
Furthermore, in terms of regulations, the EU has included digital product passports as part of its strategy for sustainable and circular textile products. They have called for mandatory use of digital product passports for textile products sold in Europe by 2030.
Adopting blockchain and NFTs as digital product identity allows brands to prepare for compliance while addressing consumers’ concerns about the authenticity of luxury goods.
Incorporating Hybrid Virtual-Physical Gameplay! LVMH Group’s Attitude is Key
LV’s ability to explore gaming, NFTs, and blockchain applications is closely tied to the support of its parent company, LVMH Group.
Since joining LVMH as Head of Web3 and Metaverse, Mensah has worked with the “princes” of LVMH, the CEOs of major brands like TAG Heuer, Tiffany & Co., and Dior, to experiment with NFTs, virtual-physical integration, and other gameplay.
Mensah also acknowledged the urgent need for LVMH to explore the Web3 space in a recent interview. She mentioned that most employees focus on e-commerce platform operations and media budgets, leaving little time to pay attention to other matters. This eagerness to understand the development of new technologies has made them even more eager to learn about the latest advancements.
Additionally, LVMH is also interested in what other brands in different industries are doing. They frequently engage with teams from Coachella, Nike, and Starbucks to explore how Web3 can help these businesses and find areas to learn from.
Frontline employees don’t understand blockchain? Expert says sales staff education is the key to success
However, there are different perspectives on LV’s actions in Web3.
Eliana Kuo, co-founder of Italian fashion tech group Lablaco, expressed high expectations for LVMH’s Web3 strategy and development in the fashion industry. These expectations stem not only from the group’s leadership position in the Aura Blockchain Consortium but also from LVMH’s pioneering role in the luxury retail sector and its significant influence.
Web technologies, including blockchain traceability, authenticity, royalties, and circularity, have great potential in promoting sustainable industry growth.
“However, when you go into a luxury boutique, you will find that very few staff members understand what Aura blockchain is all about,” Kuo pointed out. Even if brands adopt blockchain technology, employees often lack sufficient training to explain the practical value of Web3. If the sales team cannot effectively convey the technology, it could lead to a decrease in customer understanding, negative feedback for the management team, and potentially hinder the successful promotion of Web3 technology.
Regarding the VIA Treasure Trunks virtual-physical integration NFT, Kuo believes that there haven’t been many real operations following its launch, so it is difficult to judge the project’s pros and cons 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 hybrid integration applications.
Kuo emphasized that if internal sales teams cannot fully understand and promote Web3, the project is likely to quietly fade away because direct sales to consumers are still the key to achieving revenue and profit targets for luxury brands.
Even so, the fashion industry is still exploring, albeit at a fast pace. With the enhancement of AI technology and the emergence of Vision Pro, the world in 3-5 years will bring the “virtual world” closer to reality, or rather, the real world will progress further into the virtual realm. This may lead to another wave of development. Starting preparations now is a necessary decision for brands.
♦️ This article is not available for republication by partner media.
Sources:
Glossy, Highsnobiety, Forbes, Jing Daily
Editing: Gao Jingyuan, Chen Junyi
