Raising the ransom with NFT...How to use 'luxury tech' for luxury brands [The High End] > NFT_News KDCA(한국데이터공인인증원)

Last month, a non-fungible token (NFT) issuance booth opened on Green Street in Manhattan, New York, USA. In the curved mirror, the works of digital artist Shakespeare (Shxpir) unfold without pause. Visitors to the store can directly select various shapes and patterns through the touch screen and custom-made works that suit their tastes. 'My own digital art' is created on the spot as an Ethereum-based NFT through the OpenC platform. For those who are not familiar with the NFT issuance process, friendly explanations from store staff are also provided. The main character planning and operating this concept store is the Italian luxury brand Salvatore Ferragamo.

Expand your brand experience with Phygital
Luxury brands are starting to build strong relationships with consumers through the 'Phygital' strategy. Phygital refers to a combination of digital goods such as NFTs in a physical space or product. As the number of consumers who value the value of 'experience' rather than simply purchasing products at offline stores is increasing, it is to go beyond simply displaying major products in a nice way to provide a unique experience.

Bulgari introduced phygital products with the 'Octo Finissimo Ultra', known as the world's thinnest watch at 1.8 mm thick. It emphasizes that consumers can embrace all the historical moments of the brand just by wearing the watch on their wrist, and this is possible because of the QR code engraved on the top left of the watch dial.

If you scan the QR code with your mobile phone, you can get all information related to the watch, including the history of how this watch, which is a limited edition of 10 pieces worldwide worth more than 500 million won (£332,695), was produced and distributed. Going beyond simply having a super-expensive luxury watch, you will experience the real high-end essence of having a brand story on your wrist.

In addition, watch buyers receive NFTs made of the watch material. By holding NFTs, it is a strategy to evoke a kind of sense of belonging that the luxury brand is sharing everything from beginning to end, and to draw out a strong bond between the brand and consumers.

Digital certificate of authenticity NFT, add high-end value
Since last year, the most active use of NFT by luxury brands is 'digital certificate of authenticity'. NFTs are characterized by the fact that all related information such as ownership and sales history is stored based on blockchain, making it impossible to forge or alter. It can also effectively cope with the long-standing challenge of the luxury industry, the 'war against counterfeits'. The related industry has been identifying counterfeit products in various ways, such as the product's unique number, engraving, guarantee (guarantee) card, and hologram sticker. These days, when online purchases of luxury products are becoming more frequent, the industry is trying to alleviate consumers' anxiety about counterfeit goods by using the latest technology called NFT.

The three leading global luxury companies LVMH, Richemont, and Prada previously established the 'Aura' blockchain consortium last year. The genuine product authentication system using this will be introduced in earnest sequentially from the second half of this year. The products of these companies receive a unique digital code given by Aura during the manufacturing process. Since the electronic chip is embedded in the product, consumers are issued a digital authenticity certificate linked with the product when purchasing the product. The certificate contains information about product history and proof of ownership throughout all stages from production to sales.

Prior to this, high-end watch brands Vacheron Constantin, Piaget, and Breitling also formed a consortium called 'Ariani' to root out counterfeit products. The related industry predicts that this kind of 'NFT alliance' of luxury brands will further expand.

Luxury industry to account for about 20% of the entire NFT market

Compared to the NFT craze that has been blowing since the beginning of last year, the current market view that interest in NFT has somewhat softened is also prevalent. This is because the numbers visible to the eye are not good, such as a sharp drop in the daily trading volume of the NFT representative trading platform OpenC. However, it is highly likely that the active use of NFTs in the luxury industry will continue to provide a unique experience, strengthen a strong network with consumers, and enhance the scarcity value of genuine products.

Morgan Stanley has predicted that the NFT market will reach $300 billion (about 397 trillion won) by 2030. It is predicted that 56 billion dollars (about 74 trillion won) of this will be related to the luxury industry.

The luxury industry, which has already been recognized for its brand and product value on the global stage, has many areas where it can differentiate itself by providing consumers with physical experience (actual products) and ownership of virtual assets called NFTs at the same time.

Dolce & Gabbana (D&G)'s NFT collection 'Collezione Genesi' announced last year is a representative example. All of this NFT collection, presented in collaboration with the NFT market UNXD, belongs to Dolce & Gabbana's design series Alta Moda, Alta Satoria, and Alta Joelleria lines. For those who own both real clothes and NFTs in the real world, they were able to exclusively enjoy future events planned by Dolce & Gabbana. The reaction was hot. After its launch, it recorded a winning bid of 1885.73 Ethereum (approximately 6.7 billion won).

Thanks to such great success, Dolce & Gabbana also created its own NFT community, 'DG Family'. If you purchase a DG Family Box NFT, you are also given the right to purchase real products first. The trouble of 'open run' can be reduced, and a solid community between consumers and brands is naturally formed through NFT. According to related industries, Dolce & Gabbana's use of NFTs is highly likely to expand throughout the luxury industry.

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