Luxury brands have always relied on physical visibility (and the status that it delivers) as the core value proposition. For a high-class watch brand, the devotees wear those watches with pride as it says something about who they are and who they aspire to be. It’s for this reason that the current shift towards virtual worlds is setting off alarm bells for luxury brands who potentially need to reimagine their role in a hybrid ecosystem.
How do they compete and thrive in the metaverse? In this article, we’ll explore just that and see if we can get to the bottom of the paradigm shift that brands need to make.
Besides being a tech buzzword, the metaverse actually represents a large swath of different opportunities. The core idea is a virtual world through which we can interact with each other without having to be in physical proximity. The most futuristic version of this is when we don’t virtual reality goggles and escape the physical realm entirely, but it also encompasses more passive virtual interactions such as video games, video conferencing, and even the social media ecosystem that has come to dominate global discourse.
The current iteration of the metaverse seems to coalesce around 5 key pillars:
The metaverse represents potentially the most disruptive new technology in the last couple of years and there is a feeling that, for the first time, it’s ready to transform the world as we know it. The luxury brands that survive are going to be the ones who can transfer their value into these digital worlds in a way that aligns with consumer demand and the native characteristics of the technology.
1. ‘The Technology of the Metaverse, It’s Not Just VR’ by Doug Antin. https://medium.com/swlh/the-technology-of-the-metaverse-its-not-just-vr-78fb3c603fe9
2. ‘Apparently, it’s the next big thing. What is the metaverse?’ from BBC News. https://www.bbc.com/news/technology-58749529
On first glance, it may seem that physical luxury items might disappear in the metaverse because of the lack of tangible reality – however that couldn’t be further from the case. It’s already been demonstrated that digital goods will play a major role in the future of the metaverse because the status and signaling are what these items are actually about. If you look at massively popular video games, players are already spending lots of money buying digital assets to adorn their character and achieve the same sort of social response as someone might get with a luxury item in the real world.
Emboldened by the promise of cryptocurrency, digital assets will become the currency of status in these digital worlds and they will carry the reputation and values of the brands that stand behind them. It’s for this reason that luxury brands must take this shift very seriously and start transitioning into this new paradigm.
Some of the opportunities that are available to luxury brands include the following:
These are just a few of the opportunities that abound in this new world for those who are willing to adapt and move with the times. Of course, there are challenges that come with this as well. Brands will have to deal with privacy concerns, online safety issues, social inclusivity and adoption, and others – but these pale in comparison to the potential.
Luxury brands must take heed of these changing circumstances and start to reimagine themselves in first a hybrid world, and then a fully virtual metaverse. This sort of forward-thinking is going to be paramount for long-term relevance and to reach the new generation who will grow up in this paradigm.
There are exciting times ahead, that is for sure. The world as we know it is about to be disrupted. Where will your brand be? And what will it look like?
Credit: Terry Wong