3 pillars of digital luxury

How to create, distribute and capture value in digital luxury markets

A digital luxury item can be anything from: a) a non-fungible token in the form of a virtual product, like Dolce & Gabbana’s the Doge Crown or Gucci’s Dionysus bag that can be used, owned, exchanged, rented or sold in digital environments, b) a token that is a membership card, DAO contribution recognition, a PFP and a social visa, like BAYC or RARE curation token, c) virtual products that are worn in metaverses, like Roblox and Fortnite skins, d) physical products with virtual counterparts, like Diesel’s new PROTOTYPE sneaker and a corresponding NFT, or e) the image of a physical product or a look or a moodboard or any other piece of rare, exclusive or coveted content turned into an NFT and distributed as part of a collection.

Balenciaga launched last week its metaverse business unit. Digital luxury items can become a $56 billion market by 2030, according to a recent analysis by Morgan Stanley. Done right, digital luxury items create cult objects (e.g. Beeple art or a rare BAYC), justify high prices, collectibles, and initiate brands in the domain of intangibles. Digital luxury goods fuel brand growth in mature markets because they relieve the pressure of compressed trend cycles on brands to constantly come up with the new stuff. They also lend a brand a trendy positioning, remove the barrier to a…