How brands are experiencing Web3
Web 3.0 is a topic which has generated a lot of excitement over recent years, with cryptocurrency, NFTs, decentralized finance (DeFi) and other blockchain technology going mainstream. Early adopters of Web3 tools are using them to get a better understanding of consumer behavior. These efforts help build companies’ brands and power transparency around supply, production, and distribution, boosting corporate governance and sustainability credentials.
Kering, the luxury holding company, has a team dedicated to Web3, and its brands Gucci and Balenciaga have unveiled several metaverse initiatives. For example, the “Gucci Garden” experience, a collaboration with Roblox, was a promotional virtual environment that people could explore with their avatars for two weeks in May 2021. As part of the event, a digital version of the real-world Gucci bag sold for 350,000 Robux (the cryptocurrency of Roblox), which is $4,115 in real-world money.
L’Oréal has been a forerunner in adopting digital beauty trends since it first announced its intentions to become a beauty tech leader in 2018.
Now, the beauty conglomerate is embracing Web3 and the next digital frontier. The company coined the term “on-chain beauty” to describe the emerging platforms where beauty brands, creators, and consumers will interact, shop, and engage.
L’Oréal has partnered with several Web3 and metaverse startups to reach new consumers and create new beauty experiences. These moves align with the areas the company identified as potential opportunities in the metaverse, including virtual collectibles, avatars, influence, and products.
Since purchasing augmented reality (AR) tech provider ModiFace in 2018, L’Oréal has become a leader in integrating AR into the beauty shopping experience. The company is already making virtual makeup looks for fully digital interactions a higher priority, blurring the lines between physical and digital environments.
Starbucks, which is headed by Howard Schultz, is the premier roaster, marketer and retailer of specialty coffee.
The business engaged in web3 with accepting payments in cryptocurrency, though some critics branded the move a gimmick. However, it appears that Starbucks is more than committed to the idea of embracing Web 3.0.
For example, Starbucks announced that it plans to launch a series of branded NFT collections. Ownership of these digital artworks will have access to exclusive experiences and perks.
The company’s web 3.0 ambitions don’t even stop there, with the business hinting that it wants to create a Starbucks Digital Community Web3 platform. The company claims this platform could have the potential to pioneer the combination of an approachable, widely accessible front-end, backed by the right blockchain technologies that are fast and inexpensive.
Nike was one of the first major retailers to signal interest in virtual spaces and goods. In 2021, it filed several trademark applications outlining its intent to make and sell virtual branded sneakers and apparel. It also established Nike Virtual Studios to focus on blockchain, Web3, and the metaverse in January 2022.
The sportswear giant is already seeing top-line impact from its Web3 efforts. According to crypto market data startup Dune Analytics, Nike has earned over $185M in revenue and royalties from NFTs. This is more than 7X the amount of income earned by the next closest brand, Dolce & Gabbana ($24M).
Nike’s subsequent partnership activity points to the company’s intention to bring its existing community into new digital spaces while also reaching new shoppers. Overall, Nike aims to make digital assets and economies a more significant part of its business model going forward.
In 2019, LVMH joined with Microsoft and blockchain startup ConsenSys to create Aura, a platform to authenticate luxury goods through blockchain. Aura allows customers to trace their products from design to distribution, while providing LVMH additional protection from counterfeit goods and fraud.
In April 2021, other brands like Prada and Richemont’s Cartier joined LVMH to form the Aura Blockchain Consortium. The alliance effectively opens the Aura platform to any luxury brands that want to utilize its blockchain-based solution to track their goods.
Similarly, in November 2022, LVMH partnered with the public company Security Matters to track its raw materials more closely and reduce waste using blockchain.
These partnerships show that LVMH is placing high importance on authenticating luxury goods, down to the raw material inputs. This focus should continue to gain traction across the industry as companies ramp up sustainability efforts.
While some enterprises have already stepped into the Web3 space, some companies are still on the sidelines. From the long term, brands and retailers are competing with streaming giants, gaming platforms, and social media for consumers’ attention through digital content. This challenge will only grow as the rise of shared virtual spaces further transforms how consumers spend their time.
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