The world of the luxury industry is almost impossible to understand by those who don’t shop from high-end stores because it seems pointless to buy something at a very elevated price when you could easily find a very similar piece that is much cheaper.
The difference is that buying luxury goods is also about the experience beyond acquiring a product. Shoppers are investing in the lifestyle associated with the products and get a sense of belonging when purchasing from a specific brand. It’s like belonging to an exclusive group, something many people want to enjoy.
However, an unexpected change in the industry is the increasing adoption of cryptocurrencies. They’re pretty different, as much of the allure of luxury shopping comes from the allure of the history associated with the brand, while crypto is a much newer addition to the market. But the next time you see someone buy Bitcoin p2p, it might just be that they’re getting the money they need to buy a designer bag or a pair of shoes.
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Seamless experience
One of the main reasons this partnership makes sense is that cryptocurrencies allow seamless e-commerce transactions. Shopping online has become more popular during the past couple of years, owing mainly to the days of the pandemic and lockdowns, when buying from online stores was the safest option. However, the general public became accustomed to the ease and comfort of buying things with just a few clicks and having them delivered to their doorstep.
With crypto, customers can complete transactions much quicker. This is especially helpful, mainly when quick transactions are necessary, such as during the sales season. There’s no need for extra card verification or a lengthier process overall. Used correctly, they will also minimize or even completely eliminate the risk of fraud.
Blockchain fashion
Although the blockchain is well-known for its connection to crypto transactions, analysts believe that it can be used for several other processes as well. Within the fashion industry, it can be used to determine product authentication.
Counterfeits are a big problem for the luxury industry, but provenance tracking would eliminate the uncertainty surrounding a product’s origins. Brands can establish transparent policies and become more trustworthy in the eyes of their customers.
Fashion entrepreneurs will also feel more empowered to showcase their creations, as the blockchain can help them create crowdfunding for their collections that bypasses the troubles of the more traditional models. Independent designers have a better shot at gaining recognition this way.
The blockchain can also be used as a way to determine sustainability by tracing all steps of the supply chain to ensure the items were produced using ethical work practices and eco-friendly materials.
The brands
So, what brands work with cryptocurrencies and allow customers to pay with digital coins for their purchases? Although there are hundreds of coins available out there, Bitcoin is the preferred option for most, owing to its relative stability compared to the altcoins.
Gucci was one of the first luxury brands to adopt crypto payments both online and in brick-and-mortar stores in the United States. In 2022, it became the first company to accept ApeCoin payments, showing its support for Web3 initiatives. It already accepted Dogecoin by this point and, of course, Bitcoin and Ethereum as well.
Balenciaga also accepts Bitcoin and Ethereum. A spokesperson for the brand even addressed the volatility issues by saying that the company is thinking and planning for the long term so that the shifts are not of major consequence.
TAG Heuer, a luxury watch brand focused on high performance and heritage designs, allows buyers to pay up to $10,000 in cryptocurrencies. But it’s not just fashion brands joining the crypto hype.
Luxury resorts and hotels like Soneva and Kessler Collection accept crypto payments for five-star tourist experiences. In 2022, a 40-meter yacht was purchased for $9.7 million. English e-commerce company Farfetch, which focuses on delivering luxury goods, also accepts crypto payments.
The platform offers extra guidelines on how to place an order you will pay for in crypto. It advises the prospective customer to be mindful of sending the funds to the wrong address, which means the money will be lost.
NFTs
The crypto hype targets the younger demographics of consumers, particularly the crypto-wielding Gen Z and Millennials. These buyers are more likely to see fashion as an investment and expensive clothing, footwear and accessories as an alternative investment.
The non-fungible tokens have created a similar craze among the clientele, and the industry responded in kind. An ever-growing number of brands have begun working with NFTs.
Prada is one of the best-known examples, but YSL, Gucci, Louis Vuitton, Dolce & Gabbana and Burberry have also launched their collections. Some of them are focused on the clothes themselves and are actually digital renditions of the garments, but some are merely ways to launch virtual characters and add different prints. Most of the NFT collections were limited-edition only, making them highly coveted among consumers who are always looking to get their hand on rarer items, following Bitcoin’s policy of scarcity.
Balmain had a surprise collaboration with Barbie, while Tiffany & Co. released a collection dedicated solely to CryptoPunks holders titled “NFTiff.” The gemstone pendants were roughly 30 ETH per item. Ferragamo offered NFTs to the first customers of their physical store in Soho, New York, and even allowed shoppers to customize their tokens, with all the costs covered by the brand itself.
Moncler also offers 500 NFTs associated with iconic Maya 70 jacket designs. In honor of Louis Vuitton’s 200th birthday, the fashion house released an immersive game experience that combines NFTs with the brand’s heritage and takes the player through 200 worlds. The aim is to find 200 birthday candles and collect them.
To sum up, even if a collaboration between luxury and cryptocurrencies might seem peculiar, there are many things that bring the two together. Most importantly, they are focused on delivering unique experiences and products, something that has become increasingly desired in the contemporary world, in which conspicuous consumption is everywhere and products are so easy to acquire.
