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This month, five notable Web3 influencers shared strikingly similar posts: they’d been invited by Louis Vuitton to visit the ancestral home of its namesake founder, in Asnières near Paris, and they were eager to share how the brand’s 170-year history had informed its new product offering. Naturally, they invited their followers to learn more and, hopefully, buy in.
In Web2, this type of influencer marketing is normal. In Web3, this was a first. But, as Louis Vuitton prepares for the big rollout of its new Web3 offering, called Via, it has turned to tried-and-true methods that it hopes will appeal to both established clientele and crypto natives. The success of Via depends on the buy-in of both this new crowd and those who are accustomed to luxury prices and practices. If successful, it could provide a morale boost to the wider ecosystem — though some in the Web3 community have their doubts.
The five “Via Guides” — some known by first names or alter-egos such as “Betty” or “Seedphrase” — were tapped by Louis Vuitton to help explain its first NFT sale to their legions of followers. In exchange, they received one of the pieces. At €39,000 each, the phygital “Treasure Trunks” are moderately sized silver cases linked to a digital twin that grants access to buy additional products and experiences available only to the holders. On top of that, they are “soulbound”, meaning that holders can’t sell them. After hand-picking interested buyers last week, the sale opened on Friday — just one week after the Tweet threads — with just 201 trunks available to buy.
As of Tuesday morning, Louis Vuitton had transferred at least 88 of the 201 trunks. Some were gifted, and others ostensibly purchased. The financial transactions, which were available in both crypto and fiat currency, happened separately on Louis Vuitton’s own channels, so the public blockchain records only show when pieces were airdropped and to which crypto wallets. Ledger CXO and former LVMH chief digital officer Ian Rogers and DJ Steve Aoki bought one, among others. (Louis Vuitton declined to comment.)
Rogers, who is still an advisor to LVMH, says he paid full price (in fiat currency) because of the same reasons he buys any collectible: he is a fan of the brand, appreciates the craft, is keen to be a part of the community and thinks it will at least hold its value, if not increase. “I’ll judge success on if they follow through for these customers, offer us things that are unique and limited in supply relative to demand and make us feel like a part of the Louis Vuitton family.”
The next big moment happens today, when the new holders are hoping to get an early read on if their investment was worth it.
The first exclusive-to-Via product is slated to be revealed during Pharrell Williams’s first show as the creative director of Louis Vuitton men’s. While holders can’t resell their trunks, they can sell their access (via digital NFT “keys”) to these additional products. Thus, if people couldn’t score a Treasure Trunk, they might still want to acquire a piece of the story. This could pave the way for the kind of investment-worthy resale value with which “blue chip” NFT collectors are accustomed, and it means that Louis Vuitton could earn revenue on each of these secondhand sales for the life of the product.
That’s a lot of “ifs”, and the relationship between fashion and Web3 is tenuous. But already, Louis Vuitton’s approach highlights just how far luxury fashion has come in its embrace of NFTs and digital twins. It also shows that the world’s top luxury brand knows that a fully Web3 experience — anonymous and hands-off — is a mismatch for the luxury vernacular.
The timing: Tricky, or tactical?
Louis Vuitton is launching Via at a complicated time. It’s “in the midst of a sustained crypto winter, a flailing NFT market and the SEC is breathing down the necks of [crypto exchanges] Binance and Coinbase”, says Matt Maher, founder of M7, a tech-focused consultancy working with luxury brands on Web3 and metaverse strategy.
“I was surprised by the timing,” Rogers says. “I don t know the answer as to ‘why now’, but my assumption is — Pharrell.”
Williams’s appointment provides a “tailwind”, Maher says. That’s because in addition to being a mainstream celebrity, Williams is also the chief brand officer of “blue chip” Web3 brand Doodles, whose floor price is now about $3,000. Notable Doodles collectors include Aoki and Tiffany Co. EVP of products and communications Alexandre Arnault, who acquired his when the floor price was more than $33,000. (Both Tiffany and Louis Vuitton share a parent company in LVMH, whose chairman and CEO is Arnault’s father, Bernard Arnault; Alexandre is a longtime friend of Williams’s and was the one who called to say he was being offered the Louis Vuitton job.) In this way, Williams himself is an ideal crossover artist between Web2 and Web3.
The Via guides aren’t sure exactly when or how the Pharrell item will be revealed or made available. “That’s the exciting part,” says Daniel Maegaard, one of the influencers who travelled to France. “We just know that one of the items will be debuted in Pharrell’s show. That alone will be so incredibly valuable, because it’s his debut show for Louis Vuitton.”
Boosting morale on both sides
Many see the Treasure Trunks project as a vote of confidence in the long-term viability of the technology. “I see this as a big positive for the overall industry, because it gives credibility to our space,” says Maegaard.
Crypto and NFT investor Maegaard is known as “Seedphrase”, the persona he created for his Cryptopunk, which is the only one-of-one of the PFP collection that was made. Seedphrase now has almost 200,000 followers on Twitter. Maegaard also owns the Dolce Gabbana “Lion Crown” NFT (bought in 2021 for about $1 million), in addition to many other high-value NFTs and traditional products from luxury brands.
Another of the Via Guides is Megan Kaspar, a crypto and Web3 fashion investor through FirstLight Capital and Red Dao, which owns the $1.27 million Doge Crown NFT from Dolce Gabbana, and has invested in digital fashion startups such as DressX, Tribute Brand and The Fabricant. “Louis Vuitton’s tokenisation of real-world assets brings legitimacy to Web3,” Kaspar recently tweeted. “Louis Vuitton is onboarding their traditional Web2 consumers into Web3. Via trunks represent a stride towards this ‘digital-first’ paradigm.” She added that the project is an alternative to the speculative approach that characterised earlier NFT projects, and that details such as the ability for customers to connect their crypto wallets directly on the brand’s website illustrates a reimagining of online identity.
Rogers says the soulbound token approach was unexpected, but “genius” because it removes speculation. “As a customer, the fewer they sell, the better. If these tokens hadn’t been soulbound, I’m guessing they would have sold out immediately to speculators [who would buy it for the sole purpose of selling it on to make a profit].”
Non-speculative releases and use-cases of the technology past simply flipping and trading is something that has been much needed,” tweeted Betty, the founder and CEO of NFT collection Deadfellaz. “This is a considered yet brave and innovative endeavour from a brand that leads an entire industry — released through their main platform, on their main socials, facing firmly forward.”
Overcoming resistance
That doesn’t mean that collectors of expensive PFPs will necessarily be all-in. Many in the Web3 community have become notoriously inhospitable to what they perceive as big brands coming in for a “cash grab”, meaning the goal of making money without contributing to the community in a way that feels meaningful to them.
Some Web3 leaders have criticised the price point of the LV project, the artistic partners, the chosen influencers and more. Michael Tommasiello — who, as the recently appointed CEO of NFT collection Starcatchers, has been working to expand the intellectual property into a lifestyle brand — called it a missed opportunity to partner with emerging artists. The artist known as Woman.NFT criticised the Web3 influencers for using Web2 tactics to promote a traditional brand.
Just as fashion can be resistant to new technologies and communities, Web3 often still pushes back on traditional fashion. “I find it shameful that this community that I love has gone so quickly from, ‘When are traditional brands coming to Web3?!’, to ‘Don t come to Web3 like that!’,” Rogers says.
Maegaard calls this a “gatekeeping” mindset, which he says can be driven by the fear that brands will come in and change the dynamic for profit. (A similar shift happened a decade ago when brands discovered the power of Web2.) “A lot of people have a hard time understanding it when they see a brand come out of nowhere and announce a sizable investment into a collectible. You will see people who are going to hate on this,” he says.
Some see that as valid fear leftover from the heady early days. “There is some entitlement, but I think it comes from a good and genuine place of people who care,” says Farokh Sarmad, an NFT collector and founder of Web3 media brand Rug Radio, and one of the Via Guides. “I have not always been extremely welcoming to some things that were value-extractive.”
It’s true that the value proposition of the Treasure Trunks is that an elite few who spend €39,000 will have the privilege of buying more luxury goods. For the top-earning luxury brand in the world, that criticism might seem peculiar; making money is inherently among its top priorities — and luxury customers are drawn to the exclusivity that these high prices afford.
On the other hand, the big-spending luxury customer might not understand why they should create a crypto wallet or why a physical product benefits from a digital twin. This type of tension further highlights the challenges in introducing a luxury fashion Web3 project. “As we have seen time and time again, it is difficult to educate the mainstream on the significance of this and why it makes sense,” Maegaard says. “But, we have to convince the [Web3] natives about why this is a big deal as well.”
A thread from Sarmad acknowledged the hefty price tag: “Though this may come as a shock to Web3 natives, it is in line with the maison’s history of selling luxury goods.” Before the trip, he hadn’t fully understood the depth of the story behind the trunk, he says.
It helps that the guides, like Williams, have participated in previous fashion Web3 projects, and many have taken to using the type of terminology that frequently shows up in luxury press releases, such as “maison”, “code”, “bespoke” and “heritage”. Sarmad (almost 350,000 Twitter followers) is often seen wearing his Tiffany Cryptopunk pendant, in addition to Rtfkt sneakers and other crossover accoutrements. Betty (92,000 followers on Twitter) has offered physical fashion through collabs with partners including Aoki and Wrangler. And, Josh Ong (119,000) is a sneakerhead who consults on and funds NFT projects.
Curating a customer base
While this strategy is a first of its kind, most branded NFT projects partner with influential people and projects in some way. In December 2021, Adidas depended on the NFT influencer, investor and subsequent Web3 fashion founder known as Gmoney. Gucci has partnered with communities including Superplastic and 10KTF. Tiffany Co. tapped into the “blue chip” Cryptopunk community to sell its NFTiff talismans that broadcast ownership in the physical world.
Maher, of M7, says the LV project shares a lot in common with LVMH sister brand Tiffany’s NFTiff approach, because of the high barrier to entry, digital-physical link and accelerated purchase window. This helps “filter out degens in hopes to transition the Web3 elite into traditional luxury consumers”, he says, referring to the speculators who fuelled early hype cycles. The difference is that Via is ongoing, so it has de-emphasised the more techie aspects in favour of details such as loyalty and long-term value. “They’ll take a page out of Nike and Starbucks’s playbooks and do their best to make the Web3 infrastructure invisible,” he says.
In another old-school nod that evokes Hermès’s Birkin bag strategy, Vuitton hand-selects the people who are invited to buy in. This also helps ensure that owners are likely to be willing evangelists. Interested parties were asked to connect their crypto wallets, which enables the brand to see their assets. Criteria includes ownership of LVMH brand or other luxury fashion NFTs, blue chip NFTs, assets worth more than $1 million or an NFT collection worth more than $200,000. They also had to provide their email address, which enables the kind of direct dialogue that traditional clienteling dictates.
Even if there is criticism, that doesn’t mean the project won’t be seen as a success. Again, the NFTiff comparison offers some clues: while Web3 denizens were quite loud in their dislike of the project, the 250 pendants, at more than $50,000 each, sold out in 20 minutes. And the Via journey is just beginning. For now, the first owners of LV’s Treasure Trunks are waiting for their physical twins, and waiting to see what’s next.
“The [Treasure Trunks] customers took a risk based on their belief in the LV team, Pharrell and how seriously LV takes its promise to its customers. For me, that’s a very easy bet,” says Rogers. “To be honest, I’m surprised so many people have questioned that.”
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