In 2023, NFTs will be the holders of exclusive knowledge
What if NFTs (Non-Fungible Tokens) were the best way for luxury to regain some exclusivity on the web? Recent examples show that NFTs can be a private access to exclusive knowledge at a time when knowledge is a guarantee of social status and when brands have been able to sell this knowledge on social networks.
By Prof. Perrine Desmichel21 février 2023
To be in the know or not. This could be the question. Researchers have theorized and demonstrated that there is a divide between luxury consumers who know and the ones who imitate (see the work of Young Han, Joseph Nunes and Xavier Drèze in 2010 and more recently that of Yajin Wang in 2022). Faced with the proliferation of accessible luxury, the real social distinction stems from consumer expertise, from the ability to detect beauty, to get hold of the latest innovation before anyone else and to be able to elaborate on the know-how behind a product. The luxury industry is aware of this and it is not surprising to hear Déborah Marino (DGA Luxury at Publicis) open the last Luxury Paris Summit (December 2022) with the idea that luxury has the mission to "redistribute knowledge". However, more than redistributing knowledge to the greatest number (e.g., on social networks), luxury can also choose to make this knowledge exclusive and deliver it to a few privileged clients. This is what NFTs seem to be offering in several ways.
NFTs at the service of art
First, NFTs can provide exclusive access to art. While NFTs can be a work of art in itself, luxury brands also use them to honor more traditional artists and, as in their foundations, to promote art and culture. This was illustrated by the Printemps Group in March/April 2022, with the promotional operation accompanying the launch of its virtual store. The luxury department store partnered with street artist Romain Froquet, asking him to create thirty exclusive NFTs. These NFTs were offered by lottery to thirty customers of the Virtual store. Then, one of the holders of these NFTs was given a physical painting by Romain Froquet, exhibited at Printemps Haussmann. The operation aimed to reward Printemps customers with a new access to art.
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NFTs at the service of know-how
More and more luxury consumers want to know more about the product they buy. This is certainly the observation made by Thomas Steinemann, CEO of DuBois et Fils (Swiss watchmaking company since 1785). In 2010, this enthusiast chose to buy 200,000 historical watch movements, developed between 1920 and 1980 in La Chaux-de-Fonds and still unexploited.
In the summer of 2021, the brand, which wishes to combine tradition and high technology, has decided to "tokenize" the movement of its next watch, still in the process of being designed. Three hundred and thirty NFTs of the Caliber AS-1895 movement were sold (at CHF 95), giving exclusive access to images and monthly reports on the development of the upcoming model, information on the movement and on the brand. The brand's ambition was to offer a unique experience to a few watch enthusiasts, taking them behind the scenes of a watch’s construction. At the launch of the new model, six months later, all owners of the tokenized movement could choose to buy the final watch (with a ten percent discount), or to resell the NFT (with an increase in value of approximately CHF 140). DuBois et Fils was able to capitalize on the strength of the NFT, which remains an intangible asset but also an act of ownership, just like the movement of a watch, which is an intangible technique, but subject to intellectual property rights. The watchmaker intends to make this new production method his trademark and has already tokenized three of the thousands of movements he owns. This case shows how NFTs can offer a new vision of luxury know-how to a handful of privileged customers.
This model can be exported beyond the watchmaking world to other areas of expertise. Yves Saint Laurent Perfume, for example, recently offered a little over two thousand NFTs to buyers of a bottle of Black Opium. The NFT gave access to exclusive content created by the brand's nose.
The NFTs at the service of the product's history
Finally, thanks to the NFT that accompanies a product, the luxury object can now write its own history. Thus in their project, DuBois and Fils give the possibility to the owner of a watch and its NFT to upload personal photos of the property or maintenance reports of the watch on the blockchain, accessible only with the NFT. Similarly, the watchmaker IWC had, in 2022, coupled its latest Ceramic model with an NFT containing exclusive information about the product (see « The IWC Diamond Hand Club is the first NFT-based membership programme ever created in the luxury industry »). Therefore, we could envisage that NFTs become a guarantor of the watch’s history and by extension of the family that owns it. Inheriting a watch with an NFT would therefore increase the symbolic and affective value of the product. The NFT is then an access key, a hidden story and a history of its own, as if the product and its owner were one.
In short, NFTs can reinforce the ties between luxury and art, luxury and know-how, or luxury and history. However, through these three examples, we can see that NFTs help brands to enhance the value of luxury products and their exclusivity. The digital object is, in the end, still at the service of the pillar of luxury, which is a physical product.
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