The luxury fashion brands that have entered the world of cryptocurrencies
News Publisher Sep 05, 2023 15:08
There are many reasons why consumers navigate towards luxury goods in ever-increasing numbers. While the hefty price tags are often enough to deter many shoppers from purchasing, others are ready to spend the extra cash for something of superior quality.
Published on: thejoue.com
There are many reasons why consumers navigate towards luxury goods in ever-increasing numbers. While the hefty price tags are often enough to deter many shoppers from purchasing, others are ready to spend the extra cash for something of superior quality. During the pandemic, the uncertain economic situation caused hardship for many. A lot of people were left unemployed during this time. And yet, 2021 and 2022 were some of the best years for the luxury sector. There are several reasons for this, such as the fact that those buying premium products are looking for status and experience rather than a simple item, as well as the fact that retail therapy is notorious for its ability to generate psychological well-being.
The industry has been steadily developing as well. While those that don’t know much about it would say there’s nothing much you can do, and that clothing is still clothing regardless of how expensive it is, connoisseurs would be quick to disagree. The world of luxury fashion has been home to several innovations over the past few years. For instance, you can now use cryptocurrencies to perform a purchase, while others consider the introduction of blockchain systems, such as Ethereum on the market, as a means of ensuring authenticity and eliminating counterfeits.
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Increasing engagement
While cryptocurrencies are still relatively new on the global financial scene, they’ve made quite a lasting impact. Lawmakers and traditional economic systems have started becoming more lenient towards them, looking to integrate the coins into the standard systems as efficiently as possible. And while they’re still not used by most members of the general public, the numbers of crypto holders and users are constantly on the rise.
Over 50 million Americans, approximately 20% of the country’s population, own cryptocurrencies. In the UK, ownership rates stand at 6.2%, a steep increase compared to the 4.95% figures of 2020. As a result, many brands have incorporated additional payment methods on their platforms to accommodate customers who want to pay for their purchases with digital currencies.
Accepting payments
Luxury brands are no exception; several well-known companies have already incorporated this solution into their finances. Gucci is one of the luxury brands most commonly associated with crypto developments. The luxury retailer, famous among fans for its bold designs and prints, has long carried out digital coin payments, estimating that all US stores will soon accept digital money.
In May 2022, Balenciaga announced that it would begin accepting crypto payments starting the following month. Bitcoin and Ethereum are so far the only coins permitted by the brand, as their high market capitalization and popularity make them more stable. Both online stores and brick-and-mortar locations accept crypto, but the brand has announced that it is still discussing the feasibility of digital tokens, given their famous fluctuations.
The luxury retail platform Farfetch has also taken the necessary steps to implement cryptocurrency payments for its customers. Customers shopping from all corners of the world can make purchases using cyber coins. Compared to other brands that often use an intermediary to process payments, Farfetch allows direct payment with cryptocurrencies at checkout.
NFTs
Non-fungible tokens created a veritable craze within the crypto crowd during the late 2010s. And while the trend has somehow winded down, many remain dedicated to them. While a product of the Ethereum blockchain, Bitcoin has recently announced the launch of its own NFT-inspired collection, the Ordinals, which are more or less the same thing.
The popularity of NFTs largely came from their unique status. It is their scarcity that made them so valuable and which contributed to their often record-breaking selling prices. Do authenticity and astronomical value sound familiar? These are the characteristics at the core of luxury fashion as well, which is why it makes sense that the two would join forces.
Italian fashion giant Gucci dabbled into NFTs and the metaverse, being a pioneer in the area. A virtual replica of the iconic Dionysus bag sold for over $4,000, approximately $1,000 more than the real thing. This is particularly noteworthy because, outside of the digital world, the bag cannot be used in any way. The Robux currency, native to the Roblox platform, similarly holds no value outside the online medium. If anything, this is a testament to the fact that luxury fans are dedicated to the experience and symbolic meaning of a material product rather than the item itself.
Burberry released its first non-fungible token as part of a multiplayer game that features several stages, modes, and numerous tasks and missions. Balenciaga has partnered with Fortnite, one of the most well-known virtual games, to create unique looks for some characters. Featuring bodysuits, denim, heavy boots, hoodies, tops and shorts, the characters received a makeover from creative director Demna Gvasalia, who is also the co-founder of Swiss luxury design collective Vetements.
Changes in the market
For many, the acceptance of cryptocurrencies in the luxury fashion sector is proof of the relevance of digital assets. The market is well-established and has a dedicated group of followers and shoppers. This has allowed luxury fashion brands to make decisions based on what they want to do. There’s no doubt that fashion houses and designers will continue to remain popular. Often, even those who aren’t clients know the latest collections. All the smaller, independent or mass-market brands also draw inspiration from their creations.
The fact that the industry was willing to adopt cryptocurrencies and made the changes so quickly shows that digital money is a promising venture for many. Despite their fluctuations, cyber coins and tokens managed to withstand everything, even the more difficult moments of its history. The luxury fashion industry has also demonstrated outstanding resilience, showing that it can maintain its hold on customers even during times of economic recession or a global health crisis.
In fact, it has outperformed several other retail channels, due both to high-income buyers as well as those that are looking to purchase something more expensive because it is more durable and offers a better value for the money.
With all these aspects in mind, it can easily seem that crypto and luxury are a perfect match for one another.
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