From Tiffany to Tanishq: Luxury Brands are Moving Onto NFTs and Metaverse

Picture Source: New York Post

With the rising popularity of Web 3 and augmented reality, uniquely curated experiences have become essential to reaching out to Gen Z and Gen Alpha consumers. This is how jewellery brands are moving onto NFTs and Metaverse

This digitally savvy generation, from Gen Z to Generation Alpha, likes to own things with just a swipe. They are technologically advanced and no doubt, becoming the next target market for the brands. So, as the light is shifting to a new audience who live more on the other side of the screen—the online universe—luxury brands are steering towards the era of digitization. And, it's no lie, NFTs have already taken the spotlight in recent years.

Before Non-Fungible Tokens (NFTs) or say the cryptographic assets came into the picture, they were all about gaming and tech. NFTs were created on platforms like Ethereum to represent ownership of unique digital assets within video games such as in-game items, characters, or virtual real estate and often certify ownership of a specific item or content to those who had a digital wallet to own an NFT.

Slowly, these unique digital assets entered the world of art, entertainment, heritage, and fashion and even celebrities took it to another heights. You might not know, but Amitabh Bachchan's one NFT was sold for 7 crores and X's (formerly Twitter) co-founder, Jack Dorsey's first tweet NFT was traded for $2.9 million ('deep breaths').

Over time, different industries and niche brands stepped into the metaverse, and NFTs became a means of certifying ownership and authenticity for the digital and physical assets, the brands sold to their customers in the form of Non-Fungible Tokens, contributing to a wider horizon for its purpose and meaning, as we see it today.

Picture Source: Medium

At the foremost of the list, one of the luxury brands that embraced NFTs as their mode of trading digital assets with tech-savvy customers is Tiffany & Co.

In August 2022, this luxe New York City jewellery company posted a tweet that read, "We’re taking NFTs to the next level. Exclusive to CryptoPunks holders, NFTiff transforms your NFT into a bespoke pendant handcrafted by Tiffany & Co. artisans. You’ll also receive an additional NFT version of the pendant."

Tiffany's collaboration with CryptoPunks—launched as NFTiff—successfully sold out 250 NFTiff passes "amounting to an astonishing 7,500 Ether (approximately $13.5 million), in just 22 minutes" according to the research. Along with a unique on-screen experience, Tiffany ensured the holders who wanted to wear NFTiff pendants in real life were invited to their nearby stores to collect them. The truth is undeniable but NFTiff was one of the most expensive yet popular NFT projects on the Ethereum platform of blockchain technology.

Picture Source: Gem Atlas

Web 3 Technologies are getting into the mainstream day by day. But one of the pivotal impacts, from where the hype for metaverse among several industries has grown its roots, is when Facebook teamed up with Meta. It made several Indian companies start experimenting with metaverse tools and non-fungible tokens (NFTs), especially.

Titan's Tanishq—the first Indian jewellery brand to get into Metaverse—launched its exquisite wedding jewellery collection, titled 'Romance of Polki' in a 3D display on Metaverse. The visitors, by scanning the QR code, had access to online try-on experiences and it created a space for guests to socialise with each other, making it a more innovative and fun thing.

The non-exchangeable characteristic of NFTs is what makes these digital assets one-of-a-kind. Not only does this latest cryptocurrency give a fresh virtual experience and on-screen interaction for the customers to delve into, but it also offers luxury brands to explore and experiment with cool and immersive 3D tools.

Moreover, with NFTs, luxury jewellery brands can easily showcase their digitised collections to a wider horizon of audience and invite them to interact with them with virtual and immersive AR experiences—making NFTs a step closer to innovative marketing.

Are NFTs secure and valuable?

Luxury brands stepping into this NFTs-built world also ensure that their customers enjoy the experience while playing it safe with an added layer of security. The major speciality of these digital assets is that they can't be replaced or manipulated because they are non-fungible. Now that makes NFTs more traceable, authentic and coded with metadata that confirms its digital ownership.

Simone Faurschou, an award-winning designer and owner of Simone Faurschou Jewellery, says, "Transparency and traceability are much needed in our industry, and this is something that blockchain technology will be able to help with. Since pieces are completely unique and in limited edition, each owner gets proof of ownership with the NFT."

In addition to this, NFT verifies and tracks the transfer ownership of a piece of jewellery which crucially builds the brand's transparency and credibility in the digitised market. A glimpse at what Icecap has done reveals how versatile and beneficial NFTs can be if used ingeniously.

Jacques Voorhees, the CEO of Icecap—the first company to offer investment-grade diamonds using NFT technology—says, "NFTs solve an issue that has long troubled the diamond industry." Unlike tradeable, liquid assets like gold or silver, diamonds are not even 50% of their sold value, once it is purchased from the jewellers. This huge drop in its price makes it avoidable for a large range of potential customers. But NFTs showed that it can make all the tables turn.

With Voorhees's clever solution for the diamond market, Icecap came up with an idea as unique as NFTs are, to the core. It uses NFTs to represent ownership of exclusive gemstones and jewellery. So, after a piece of jewellery is redeemed, it will, with inspection, be transformed into an NFT again for ongoing trading. This digital ownership enables the diamond to be bought and sold at the same price, thereby establishing a publicly accessible two-way marketplace for investors.

Picture Source: The Indian Express

Even an international jewellery brand, L’Dezen by Payal Shah shook hands with Digital Twin—an NFT Marketplace—to create unique digi-physical diamond NFT earrings. "The NFT was asset-backed, i.e. the collector could redeem their NFT to acquire the physical ‘Limitless’ earrings to wear in real life."

These NFTs are making luxury brands initiate trading where customers can also perceive it as a part of their investment. So, it is insured and transparent, leading to responsible trading.

Will NFTs work for luxury brands in the long run?

NFTs—in a clear statement—are increasing their worth as a long-term investment. Created through the process of Minting, NFTs are recorded on the Blockchain Technology. Each new transaction creates a block which further connects with other blocks. For example, if you purchase an NFT it will be created as a new block and the imitation of this creation will be shown to all the users who are a part of that blockchain—that's why making it highly transparent. NFT information being validated by a validator, and the block being closed.

These can work for luxury brands in the long run, if brands create awareness among their audiences. From conventional to convenient, luxury brands need to educate their target audience about NFTs, their working and how they strengthen luxury purchases. By expounding on blockchain as a secure platform for transactions and its resistance to hacking, brands can create trust among people.

Picture Source: Katerina Perez

NFTs that are stored on blockchain but not restricted to the digitised market are a plus point. They are creating values for both ends. If luxury brands are using NFTs innovatively, it can lead to another segment or platform that can raise their potential customers from.

Moreover, as the tech-driven generation, who likes the internet culture, is on its way to become the focal point, the companies really need to gear up with this Web 3 technology. It will only give an edge to their brand strategy. The modern world needs modern solutions and you can't deny how NFTs are becoming the one.