Hailed by the digital world as the natural evolution of internet usage for business, Web 3.0 is gathering mixed response from the world of fashion. This version of the internet is trying to introduce the usage of advanced Blockchain enablement such as crypto currencies and NFTs. Web3 is the third major evolution of the internet. Web 3.0 encompasses both new technology and a new culture for fashion and beauty, characterized by decentralization, co-creation and co-ownership. The luxury goods industry is also experiencing the transformative effects of these emerging technologies.
With this concept at the helm of Web 3.0, some luxury fashion labels have embraced Web 3.0 communities by beginning to accept crypto payments. These in clued: Gucci, Off-White, Farfetch, Hublot, Phillipp Plein, Rolex, Patek Phillipe, Frank Muller, Tag Heuer, Ralph Lauren, and Balenciaga. Regular sportswear and clothing brands too have embraced crypto payments such as: Nike, Hipster’s Paradise, H&M< Dollar Shirts, Aeropostale, ASOS, American Eagle, Aerie and Calvin Klein among others.
However, instead of accepting crypto currencies directly from the customer, brands are opting for crypto currency payment gateways that accept digital currency from the payer on the brand’s behalf and remit that payment to the brand in fiat currencies. However, many brands don’t want to engage as the inflation and the bloodbath of the crypto currency crisis has them apprehensive about dealing with it. They can’t be blamed for showing caution as the “crypto crisis” wreaked havoc in 2022, wiping out vast fortunes.
Web 3.0 to transform luxury goods and services industry
Driven by millennials and Gen Z consumers who are early adopters of new technologies, digital demand for fashion and luxury brands is expected to grow to 25 per cent by 2025 says a Morgan Stanley report. A significant way crypto currency and Blockchain technology are transforming the luxury industry is by creating new business models. Luxury brands are now leveraging Blockchain technology to create unique limited-edition products and newer ways of customer engagement -offering enhanced transparency and security in their transactions. From ensuring the authenticity of luxury goods to providing a seamless payment experience, Blockchain and crypto currency are revolutionizing the way the luxury goods industry operates. Gucci last year built a virtual gallery showcasing NFT (non-fungible token) artwork and vintage fashion items, and rolled out a $12.99 pair of virtual sneakers.
Whilst not in the luxury category, sportswear and clothing brand Nike has embraced it with great gusto. Nike rolled out its ‘Swoosh Community’ in November 2022, with options for members to participate in activations online and in the real world, engage with Nike athletes and creatives and use virtual Nike gear in games. In April 2023, Nike launched its first virtual collection, called Our Force 1, which was co-created by its community. Big brand moments like this aside, consumer engagement with Web3 activations is still on the low side, and it skews towards the young, affluent, male demographic. It is as if the hype over the advent of the “Web 3.0-curious” didn’t percolate to other demographic segments.
Why some brands are fence-sitters
The crypto currency crisis sapped the forward momentum of the emerging Web3.0 marketing landscape, where business leaders were eager to figure out how Bored Ape NFTs could translate to new channels to reach consumers. This is exactly why CMOs of many brands aren’t impressed. This conservative approach cannot be overturned just because Web 3.0 is being hailed as the latest innovation in the worldwide web as the Metaverse proved to be a nightmare with security and other IP address issues. Web 3.0 has to work hard to enable brands see real reasons like improved sales and profits rather than gimmicks. If crypto currencies don’t regain the public’s trust, it is unlikely brands that are skeptical are likely to embrace Web 3.0 for what it is.
