The Luxury Fashion Industry Embraces the Metaverse
Luxury fashion brands such as Louis Vuitton, Nike, and Gucci have been at the forefront of embracing the metaverse and practically integrating aspects of the technology directly into their business processes.
Predictably, Meta is taking the lead in demonstrating metaverse uses-cases. Its Horizon Worlds is already a major metaverse platform and is constantly evolving, adding new features. Mode.com is elevating its online shopping experience by offering AR furniture placement via smartphone cameras.
The video gaming industry is always ahead of the curve in embracing new technologies. It is currently at the forefront of the sales of digital upgrades. Players can use both real and in-game currencies to purchase exclusive items in the game’s marketplace that they can use to enhance their gaming experience and differentiate themselves from others in the ecosystem. This marketplace is so well-established that in-game purchases now run into billions of dollars.
Fashion and video game demographics generally tend to be younger and have less disposable income compared to the older generations. As a result, some have always questioned whether immersive commerce can generate the ROI that will justify the billions of dollars in investments pouring into the industry. Given such handicaps, can immersive commerce be a worthwhile experience?
For the numbers to work in their favor, tech investors must be able to sell their big-ticket items.
Luxury fashion brands also face a dilemma when moving into such a marketplace. They are coming into a younger market with less disposable and need to sell stuff to these users while still maintaining the exclusivity and prestige associated with their products.
Luxury products and services in the metaverse illustrate how immersive commerce can be incorporated into an ever-changing industry.
Maintaining the Exclusivity
Globalization, e-commerce, and clones have diluted the exclusivity that luxury brands once enjoyed in the fashion world. You can now order replicas of big-ticket luxury items for much less in a matter of minutes. The edge that luxury brands have in the marketplace lies in their exclusivity. Not only are they made to the highest quality standards but the scarcity of these items also means that they are only accessible to those with the means and prestige to buy them.
Just like in the real world, immersive commerce can also be used to create scarcity and exclusivity in digital merchandise. This is already widely practiced in the NFT ecosystem.
Exclusivity can be added to immersive commerce through private rooms and clubs that can be accessed via a private link or QR code. A user in this space can be engaged via customized experiences guided by real people or AI assistants that know their real names and preferences and who spend a considerable amount of time with them.
The virtual luxury space can be put to various uses including video content, 3D product specs, real-time voice-activated chats and other perks to make users in this space feel special. According to some studies, 40% of consumers will spend more if they encounter a highly personalized shopping experience. Such a statistic is promising for brands embracing immersive commerce.
Interactivity is Built Into Luxury
Luxury brand loyalists have very high expectations in their shopping experience. They expect elevated customer support service and an overall excellent shopping experience. This holds true in both in-store and virtual product interactions.
Conventional online interactions on the internet don’t quite deliver this personalized shopping experience. In luxury, a real-life visit to the physical store often delivers an exclusive shopping experience than shopping online. However, not everyone can travel to exclusive luxury fashion stores in Dubai, Paris, London, Madrid, or New York. That means a good portion of luxury brand loyalists will rely on online shopping to access luxury brand experiences.
A study by the GE Capital Retail Bank found that up to 81% of consumers research online before they make a purchase. For brands, this presents a golden opportunity to lock in the eyeballs through a premium interactive shopping experience where consumers directly interact with the products in a metaversal experience.
Several top luxury brands are already delivering on this. Dior, for instance, launched a virtual holiday pop-up store that showcases its line of cosmetic products hosted inside a digital recreation of Chateau de la Colle Noire, the former home of the iconic designer and one of the most iconic properties in France. Consumers inside the virtual Dior home can visit three rooms, the beauty room, the gift finder room along with the fragrance room which matches the unique personality of the shopper, including the perfect perfume. The beauty room in the Dior virtual pop-up store featured a customized gifting experience and virtual try-on. Through the virtual store, Dior offered a highly personalized and unique luxury shopping experience that is simply impossible to replicate on other media such as product catalogs.
An expensive product should preserve its value in its lifecycle. Luxury brands generally outdo themselves in their ability to retain the relationship between the customer and the concierge beyond the point of sale.
Immersive commerce can also play an important role in post-sale support. Customers can use the metaverse with the sales rep who took them on a guide through the brand’s merch and sold them the luxury product.
Brands can tap into the power of immersive commerce to permanently link customers with a person in the company who will be their problem solver and confidante. Because this takes place in an immersive setting, the customer is immersed in an experience similar to that of a physical store. Besides, if a buyer can connect virtually and interact with the same familiar attendant, the trust in the brand grows stronger.
The intersection of luxury and immersive customers will present challenges and opportunities. There will be many successes and flops. Success in the metaverse will require strategic and financial planning that will generate a feasible return on investment.
Luxury brands are well-positioned to benefit from this computing frontier. They have the audience, the resources, and a target market with good spending power.