The metaverse – or Web3 – is a new and widespread concept that few can define. But the excitement is very real: several major luxury brands are already spending millions to secure a place in this parallel world. This is the case of the LVMH Group, which has begun to adapt its multi-channel strategy to explore the opportunities offered by this new virtual world. Frank Le Moyle, CIO of the luxury group, agreed to this interview to tell us more.
Defining Web3, unlike Web 2.0 that heralded the emergence of social networks, is very complex…it includes the issue of blockchain and NFTs (non-fungible tokens) but also virtual reality. Does the outbreak of the metaverse mean for you the end of screens as well as physical sales channels?
Frank Lumol: I don’t think we’re going to be saying goodbye to our screens anytime soon, things are speeding up but there’s still a kind of immaturity around the metaverse. The physical channel will continue to exist so that we can replicate high-quality immersive experiences in virtual stores.
The main topic is to know the virtual reality that we want to develop compared to what exists in the physical world. This is an additional question that must be addressed in order to better write current technologies.
I wouldn’t say the debate is about technology or which channel to adopt as such. It is rather a question of the product chosen and the resulting customer experience, the process of personalization and the freedom to express individuality in the service of society.
LVMH shares the conviction that the topic is important and that we must embed our physical products into the metaverse, without being content with simple virtual copies. The digital twin is not beneficial in itself, so more attention should be paid to the complementary experience.
Entertainment is what is most talked about today. But the concern for luxury in the world of video games is not new…
In fact, the concern for luxury did not appear to the world of gaming in 2022 and we have always forged a conviction of the opportunities that it can present. LVMH very quickly maintained its connection with this world of entertainment.
Louis Vuitton, for example, has teamed up with Riot Games to design a character from League of Legends and more recently, the brand developed a mobile game called “League of Legends.”Lewis: The GameWhich provides information and anecdotes about its history. Games allow our customers to discover our products differently, with exclusive services and in another form of magic.
The difference today is the access of blockchain to gaming, which guarantees secure and tamper-proof transactions as well as unlimited personalization of the gaming experience.
“We are not interested in selling virtual sneakers for €10. We are not here for it,” Bernard Arnault recently said, referring to the speculative setbacks that contributed to the bursting of the Internet bubble in the 2000s. What is your opinion?
I don’t pretend to speak for Bernard Arnault, but I think you should understand what he’s saying from the fact that LVMH doesn’t base its business model on selling sneakers. Our luxury brands value their expertise and knowledge of craftsmen and designers. We won’t compete with streetwear for the simple reason that our goal with the metaverse is to show off our ingenuity and the way our products are made.
So we won’t stop at creating “digital single threads” – in other words, creating NFTs that have no physical equivalent – and we won’t only sell our existing products through new channels. Of course the metaverse can bring in new clients, including younger ones, but the primary goal is to enhance our heritage and know us better, particularly by inviting visitors to visit our leather goods workshops virtually.
Additionally, since the NFT marketplace relies on blockchain to operate, we will also be able to link our physical products with digital certificates of authenticity that guarantee their owner full ownership. The metaverse will reconnect the customer with the history and knowledge of our products.
Metaverse is often dehumanized in the messages promoting it, while promised new interactions will appeal to the emotional and sensual. It’s a very general term and we like to talk about Web3 about three topics that drive us: the proof of authenticity thanks to the blockchain, the NFT marketplace and its potential for creation as well as the virtual world linked to images. 3D and customize avatars.
Can you tell us more about your NFT strategy?
On the topic of NFTs, we have to be honest because all the luxury players are figuring out the topic. But these are no strangers to this because everything that falls under the field of artistic creativity is connected with our activity, for the simple reason that luxury clients have always shown a strong affinity for art.
On the other hand, there are brands that reproduce virtual copies of their existing products. On the other hand, brands that create exclusive virtual collections that can then be reproduced in the physical world. We’ve already started imagining parades in the metaverse where users can purchase NFT products before they’re even in store.
Last year, Dolce & Gabbana, AZ Factory and Givenchy teamed up with graphic designer Chito, and Louis Vuitton with artist Beeple and new artistic director Nigo de Kenzo, decided to sign the holders of one of his pieces from his collection. Draw to win exclusive NFTs.
We can also mention Hennessy, who offered a virtual and real sale of two limited-edition bottles of cognac for 70.47 Ethereum, or more than 200,000 euros. The luxury brands’ concern for NFTs is to provide customers with a guarantee of authenticity as well as exclusive access to preview events, for example.
To adapt our omnichannel strategy to this booming segment, we also plan to establish the position of “Head of NFTs and Collectible Metaverse” in the near future. We will have the opportunity to talk more about it at the upcoming Vivatech exhibition next June, where a speech is scheduled from LVMH to make some announcements on the subject.
<<< Read also: Sebastien Borget, co-founder of Sandbox: “For the metaverse to truly create value, brands must not reproduce what is in the real world.” >>>
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