Trend: Luxury brands are using web3 to elevate their consumer experience and drive dynamic engagement
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Luxury brands are some of the most successful at creating not only hype — but generational loyalty — around high-quality products. Just consider some of history’s most long-standing luxury fashion houses, like Louis Vuitton and Prada, which have been around since 1854 and 1913, respectively. For any brand, let alone those selling luxury products at high price points, these institutions’ longevity reveals several powerful truths about how luxury brands can mix time-tested strategies with disruptive new tactics and technologies in order to succeed in a big way.
Using web3, luxury brands have the opportunity to retain — and better understand — their customers by offering captivating yet accessible experiences that turn the act of buying any product into something more: an enduring digital connection.
What do luxury brands do best? In an increasingly saturated market, they’re experts in maintaining a loyal customer base of people willing to pay high prices. They do this through unmatched brand recognition, audience analysis, and conscious evolution.
While the toolkit around these strengths has evolved (it’s safe to say customer analytics looked different in 1854 than it does today), it’s an ability to keep up with the times while carefully expanding on their prestigious reputation through experimenting with new technologies that has helped them thrive.
However, the way these technologies come to life for brands is not always equal in delivery, optics, and impact. In web3, we’ve learned that simply “doing it” is not the same as “doing it right” when leveraging web3 to grow and retain an audience.
This realization becomes even more pressing when you consider how fast web3 technologies evolve, which is both a potential hurdle and a massive opportunity for smart brand leaders.
If you want the best ROI, you need to consider what’s working and why.
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The emerging, ideal fit for web3, NFTs, and luxury
Disruptive innovation often thrives at a philosophical level as much as a technological level — and this is undoubtedly the case for web3 and NFTs. In luxury and fine art, NFTs provide digital provenance, transparency, and proof of authenticity in an industry where counterfeits and murky ownership history have long halted progress, reputation, and customer confidence.
In luxury, art, and digital fashion, for example, onchain assets can be tracked and verified by anyone. This access to entirely new sets of transparent data has become a complete game changer for the next generation of investors, owners, artists, and brands.
For brands that launch products, sell assets, and create onchain experiences that blur the digital and physical, they can deeply benefit from what web3 data infrastructure provides.
- Wallets are the new emails – Every brand is on the hunt to collect more contacts or leads, and the most common way to do this is still an email or SMS pop-up form. This kicks off a brand’s automated ‘welcome series’ for converting or nurturing leads. Wallets are just as easy to create and connect from site to site, but can carry much more personalized data at first glance than an email address.
- Tokens are the new cookies – Brands can ‘read’ what tokens are in a given wallet as soon as it connects to their website or app, and instantly glean actionable consumer behavior data. Not only can brands tell if a given consumer owns one on their NFTs, but also those from other brands as well – along relevant transactional data such as trading history, selling prices, holding periods, etc. And that’s not all!
- Tokengates are the new login/signup pages, including paywalls – Today, brands ask you to login with your email address in order to validate your membership and show you personalized information. This is powered by their customer data platform, which synthesizes all the available demographic and behavioral information they have on each customer, and links each profile to their email login. This infrastructure is inherently siloed from all the other information that each customer has sprinkled across other brand’s customer data platforms, and limited even internally by how integrated a brand’s various consumer touchpoints are on the backend. Moving a consumer’s data profile to the blockchain can enable the same if not smoother login/signup, but also power a more powerfully personalized experience with less tech infrastructure to build and maintain.
Wallets, tokens, and tokengates can leverage both onchain and off-chain data, which means a combination of both public and private data. Tokens can be seamlessly distributed or earned or updated dynamically in response to virtually any consumer touchpoint: newsletter signup; survey, poll or game; online or in-store purchase; digital or physical product; ratings and reviews; follow and engage on social media; attend a digital or physical event; refer a friend. And since tokens metadata can link to arbitrary, rich and dynamic datasets, this evolutionary infrastructure enables a whole new world of personalization possibilities for luxury brands and beyond.
Welcome to the future of customer analysis, engagement, and retention: a stepping stone to knowing your customers and delighting them through experiences and personalized opportunities that will keep them deeply excited for what's next.
How do luxury brands not just "do it," but "do it right"?
Web3 empowers an entirely new, digitally-native generation. As The Relevance's Nicole Booth wrote in The Drum, these users "seek modern, online experiences" led by luxury brands who want to "maintain exclusivity while fostering a sense of community" among their customers."
Referencing web3 success stories from iconic luxury brands like Louis Vuitton Moet Hennessy (LVMH), Prada, Cartier, Tiffany, and Balmain, the article outlines web3's potential to improve the technological infrastructure of luxury and art (traceability, IP, verification) as well as the philosophical (creativity, collaboration, perceived vs. received value).
For Louis Vuitton in June of 2023, realizing this potential recently came into full effect. In June, the brand dropped a few hundred limited VIA Treasure Trunks, priced at €39,000 (around $41,600). The trunks were digitized versions of LV's iconic luggage trunk piece, and upon the successful purchase of the token, buyers will receive its physical counterpart (or twin).
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Why was this approach particularly brilliant, considering its extremely high price point, full waitlist, and current market conditions? Here are a few reasons why:
- Easy onboarding experience and loyalty-focused mechanics: The Treasure Trunk tokens (non-transferable “Soulbound” tokens, which are forever linked with their original recipient and cannot be traded), gives the brand clear visibility and insight into their audience — i.e., their biggest, most likely to spend customers). Additionally, the trunks could be bought in fiat or cryptocurrency, offering a more approachable and frictionless buying experience.
- Reading between the price tag: Who would spend nearly $40K on a digital trunk? Well, how about someone who already is interested in spending, say, $11K on a vintage, unverified trunk and, as a savvy, forward-looking investor, is interested in the NFT’s potential to unlock additional, valuable experiences for years to come.
- Following Louis Vuitton’s initial trunk drop, they released the first exclusive product from the collection — a Pharrel-designed Orange Speedy Bag (purchasable for $9K). This structure is about appealing to an audience who ultimately want exclusive access to high-value physical assets in a more exciting, gamified way that personifies and also elevates your brand ethos and history.
- Careful, strategic planning: Louis Vuitton was smart enough not to go too "big" on their first drop, which could have distanced their diehard supporters (those who were most likely to spend) and appear impatient or ingenuine to a web3-native audience. Rather, they made their way into web3 by launching Louis the Game. In the mobile game, users collect exclusive “NFT postcards” to learn more about their brand and engage with interactive, IRL experiences. It’s a similar community-loyalty-focused approach to Starbucks Odyssey’s limited edition stamps and one that didn’t require potentially unpredictable reliance on outside web3 communities (i.e., Tiffany x Cryptopunks, Adidas & Prada x gMoney).
Future-Proof Luxury Brands Must Deliver Fun, Dynamic and Forward-Looking Experiences
World-class artists and the historical, cultural, and traditional institutions that handle their sales have also made their way into web3. The playbook for those institutions has drastically changed. At Mojito, we've brought Sotheby's into the era of web3 through digital art auctions with artists like Sam Spratt, whose immersive art project, LUCI, culminated in The Monument, a gamified experience that invites collectors to embark on a journey where they must acquire multiple NFTs to engage with Spratt’s paintings, thus unlocking other exclusive perks.
Similar to the strategy of Louis Vuitton and most recently, the French fashion house Maison Margiela, The Monument brilliantly blurs the lines between traditionally physical assets and unique digital access, successfully attracting big spenders to niche, yet still "accessible" (i.e. open to anyone willing to spend) experiences.
In November, Maison Margiela made waves with the launch of their debut web3 drop — a gamified experience where collectors can collect all 24 tokens, numbered 0 to 23, an immediately recognizable play on the brand’s iconic numeric label design. Similar to Louis Vuitton’s Treasure Trunks, Margiela used non-transferable soul-bound tokens and an instantly recognizable visual identity that would quickly grab the attention of their audience and get them excited for the opportunity to claim high-value future drops.
In another move towards accessibility, Margiela utilized a free mint on the user-friendly Polygon blockchain with no gas fees and a high token supply with a diminishing number of available NFTs per each “number” of the drop (a nod to their visual identity) — all elements that represent an approachable, yet still limited onboarding experience.
Know Your Consumer (and Product). Then Build Accordingly.
So what do all of these brands who are “doing it right” have in common? From Louis Vuitton to Maison Margiela, these leaders know their products, IP, audience, and how to build long-term loyalty between the two with carefully constructed, dynamic, and incredibly fun experiences that appeal to their highest-spending clientele while garnering attention from a younger generation.
It’s a drastically different approach from the purely speculative digital assets from the “NFT 1.0” era around 2021, where many drops lacked future utility and the opportunity to gain something tangible.
It’s a testament to the potential of web3 that so many institutions are successfully deploying digitally-native strategies to sell their most historic, recognizable products in new, digitally-native environments. These strategies above should be a signal to brands that are looking to better retain, excite, and understand their audience in a time where dwindling attention and consumer competition are at an all-time high. Build accordingly — and if you need some help, contact Mojito to discuss your project requirements and get a demo.
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Adopting the Avatar: the Core of Consumer Customization
A brief playbook for brands building for the digitally-native generation.
According to McKinsey, fashion companies are expected to double their investment in technology by 2023. This statistic was one of many released during 2021's digital assets boom, revealing an important truth: consumers — and especially Gen Z — care deeply about owning their digital identities. In the two years since "NFT Summer," we've learned a lot about the evolution of consumer habits in digitally-native spaces. These insights can help guide the future of how brands operate and consumers engage in virtual environments.
As a short follow-up to our last blog post on how web3 is driving a return to the internet's golden age of customization, we're sharing some additional thoughts on how you can build for the next wave of consumer adoption. This evolution is already showing signs of incredible value for forward-thinking brands like Gucci, Valentino, L'Oréal, Adidas, Nike, and many more.
Web3 Returns the Internet to the Golden Age of Customization
This is what it feels like when the future enables what so many users loved most about the past.
MySpace, StumbleUpon, GeoCities, LiveJournal, Tumblr — the early internet thrived on user-driven, customizable experiences that, while rudimentary in design, clunky in function, and altogether useless for major brands (i.e., not monetizable or targettable), offered humans some of the earliest opportunities for representing themselves online.
Two decades later, across multiple transformational eras of the internet (more on this below), what can we learn from these now archaic — and predominantly extinct — platforms? To start, let's set the stage of the golden age of the web and the subsequent erosion of online customization that followed.
These early platforms referenced above were among the first to offer users a customizable digital sandbox that lacked the restrictions — and intrusive, expensive, increasingly ineffective advertising practices — that is now commonplace across tech. These were platforms on which people created, not platforms on which products were sold.
FAANG companies undoubtedly standardized the internet user experience. These companies built easier ways for people to create and disseminate information while creating the ability for the world's biggest brands to reach these new, content-craving audiences through new experiences and digitally-native business models. However, FAANG-style companies have also contributed to the flattening of the once-loved, now-nostalgic digital aesthetic, eliminating (or narrowing) users' ability to find customization online.
Example: go to StumbleUpon right now, and you'll just get dragged between identical Pinterest boards.
Implementing Web3 CRM: Wallets Are the New Email Address
How to Implement Web3 CRM for Consumers
Your customer relationship management system is your business's beating heart. It’s how you nurture customers, track vital information, and make strategic decisions.
Now that web3 has entered the fold, traditional CRMs can be augmented. So the question is this: Is your brand prepared for it? And what does the future look like?
Brands can expand upon their CRM data with wallets and token interactions to build loyalty in the changing digital economy.
If your CRM is the heart, what happens if it can't support your entire customer base along with their actions and interests? Consumers are adopting web3, and you want to be there from the start.
And with increasingly more limitations on what consumer data brands can collect, store, and use, along with apps and systems that don't talk to each other, brands miss out on data everywhere.
You need web3 CRM capability to connect wallets and token usage to your web2 data to accurately paint a picture of your customers.
Enhancing your CRM with web3, you can track and reward engagement across virtually any physical or digital touchpoint and connect it all in one place to analyze and manage.
Onboarding customers to create web3 wallets is the first step to getting started. The good news is that, with Mojito, the process is seamless for new users. They can set it up and manage it with an email address. In many ways, wallets have become the new email address, offering more benefits for customers and providing brands with the holistic data and CRM capabilities they need.
Mojito's web3 CRM collects and pulls all these moving pieces from different parts of the web together to create one remarkably effortless customer experience.
In this article, we’ll compare the differences between a web2 and web3 CRM, the benefits of using a web3 CRM, and how Mojito might be the right fit.
What’s the difference between web2 and web3 CRM?
The CRMs most brands use do not facilitate the needs that web3 has—the biggest one being connecting offchain and onchain data and creating an integrated portrait of customers across all physical and online interactions.
Web2 CRMs provide essential data and communication tools to manage emails, SMS lists, social media followers, eCommerce buyers, event attendees, and more.
But it's difficult to connect every data source you'd like to trigger into your web2 CRM, let alone add new data sources in web3.
Brands can instead use a web3 solution to augment their CRM by connecting data sources in a different way that brings everything together. Companies can create the most connected, data-rich CRM they've ever had.
Brands require CRM solutions to capture the entire customer data picture across both the internet and real-life experiences. In turn, they create a community-driven customer base, increase sales, and use their CRM for better connections, communication, and data.
Wallets are the new email addresses
It's no secret that brands are losing data through their traditional channels. Big Tech companies are reigning in how much data you have access to, like Apple limiting cookies, and how brands now get an incomplete picture of their customers.
Additionally, as customers interact with web3, your brand is in the dark until you establish web3 CRM capability.
Web3 wallet addresses are unique identifiers for users on the blockchain. Their address is recorded when they purchase an asset or trigger activity on the chain. With Mojito, onchain and real-life interactions join together in one familiar experience.
As your customers interact with your brand and create or log in with their wallets, you can associate that with their customer profile.
When a customer logs in on your profile manager, they can add their web3 address, resulting in a holistic view of your customer.
This is a huge opportunity for first-party data. Your brand can get direct analytics from your activities through a verified, authentic process supported by onchain and offchain interactions.
Wallet addresses offer a more reliable and extensive way to gather data on customer behavior, help drive engagement, and make better growth decisions.
Cookies are the new NFTs
While traditional solutions suffer from increasingly limited access to cookies, web3 offers brands a bright and better future.
NFTs are non-fungible tokens. A non-fungible token is a digital asset recorded on a public decentralized ledger called a blockchain. It can be verifiably owned and impossible to forge.
NFTs make it possible for someone to digitally own an asset, which has changed the future of technology. But it also provides a unique opportunity for web3 CRMs, engagement, and data.
"NFTs: your ticket into a brand's action." — Michael Litman
Dynamic NFTs utilize live metadata to gather customer information and drive engagement.
Before solutions like Mojito's Dynamic NFT, non-fungible tokens didn't change. And why should they? People wanted a unique digital asset that would last forever and retain or grow in long-term value.
But as web3 matured, so did the perspective on NFTs.
What if the value of an NFT was change?
For example, artists began to experiment as they created NFTs. They would explain that the NFT would change and evolve. This in itself made it valuable and rose in popularity.
Brands would learn how to use it for data and supercharge engagement only a short time later. Traditionally, metadata remained static, but now Dynamic NFTs update metadata based on consumer behavior.
Brands can leverage metadata in many use cases:
Loyalty programs: Customers can join membership communities when they purchase a digital pass with Mojito's traditional, familiar checkout experience. Every time they interact with your brand across any first-party or third-party platform, like redeeming rewards or visiting an event, their token metadata is updated and fed back into your CRM.
Exclusive access: Brands can implement token gating, limiting access to your brand's NFT or memberships. Gate websites, apps, events, games, and more. When customers check in, their activity becomes trackable.
Enhanced membership and subscriptions: Dynamic NFTs allow brands to sell time-access passes with expiration dates. While owners can always retain the NFT, their subscription must be maintained for full access to benefits. Brands use the metadata to identify subscription holders and analyze their activity (while adding a new revenue stream).
Customer interactions: Brands use NFC-enabled spaces to connect customers with their Dynamic NFTs and events, physical checkout experiences, and more, intertwining digital and physical customer engagement. When someone redeems a reward by scanning a code or object, your brand can track that activity.
Web3 solutions like Mojito use webhooks to send data from third parties back into your CRM. Every time a user takes an action, Mojito sends that data to your CRM and vital tools. Your data is collected, verified, and authenticated in one place, on or offchain.
Mojito offers a cohesive relationship management infrastructure. You can leverage a complete picture of your customers through thousands of interactions involving physical triggers, third-party apps, web2 tools, and web3 activity. Customer actions across the web or in real life can be configured to work with your CRM.
You’ll be able to understand your customers better than ever and reward them for their engagement at a level that was impossible before.
Benefits of using a web3 CRM
You don’t have to worry about a bumpy or complex ride when you adopt a true web3 CRM.
You’ll have all the tools, resources, and tech stack integrations needed to make an enterprise solution for your customers that meets the standards of your brand.
Below are several benefits you can expect when you connect your web2 CRM to a web3 solution.
1. Bring web2 and web3 data together
Mojito facilitates web2.5, meaning instead of "switching" web experiences, brands and customers can use web2 and web3 with no learning curve or friction at all. All is encompassed in one familiar internet experience.
Users can pay with a credit card or crypto and interact with the online apps they've used all these years (as well as easily using web3 apps).
Mojito enables brands to collect and pull necessary data to understand their customers through all web iterations and experiences—all in one CRM solution.
They can use the full power of this web2 and web3 data for events, NFT collections, token gating (exclusive access based on ownership), and other digital ownership experiences.
2. Actionable data for better customer relationships
Every brand wants to improve its customer relationships. Still, as the internet becomes more fragmented, especially with the introduction of web3, improving service and keeping up with expectations will be much more difficult.
Web2 CRMs are not capable of putting all these actions and platforms together.
However, web3 CRM platforms improve customer relationships by incorporating off and onchain activities through a centralized database.
If brands adopt an enterprise web3 CRM, they can meet changing consumer needs and stand out in the market with better and improved relationships thanks to the tools and possibilities web3 offers.
3. Improved sales and marketing strategies
Now, more than ever, your sales, marketing, and customer service teams will have access to the most accurate and transparent data within multiple channels and communities, all in one place. Your CRM can include customer history, preferences, community management details, and more data points within web3.
You can use accurate and more abundant data to analyze customer behavior for improved decision-making. A suitable CRM can also help sales and marketing teams provide personalized messages based on their data, increasing conversions and other KPIs.
4. Next-level customer service
Not only does better, more current information help improve customer relationships but so does the level of service you can provide.
Your team can proactively resolve issues with real-time data collection (for example, tracking customer engagement and pinpointing areas of opportunity), which increases customer satisfaction.
Brands can go beyond positive experiences and create the best problem-solving processes and community-building opportunities for your customers.
5. Greater ROI potential
Web3 CRMs connect your stack, improving overall sales, marketing, and customer service and building long-term loyalty.
These critical benefits offer bigger ROI potential and future growth. By analyzing blockchain activity, brands can track the popularity of certain products, use blockchain-verified data to track inventory and invest in the areas customers are most interested in.
Web3 CRMs also open new revenue streams, like selling digital assets with NFTs. Brands can even test the reception of new physical products by selling limited sample releases with “NFT digital twins” (when a physical good comes with an NFT representation at purchase).
6. Strategic positioning
You can better position your company for the economic shift to the decentralized web with a web3 CRM.
For example, Mojito's web3 CRM also includes "web2.5" features for the transition.
Some customers won’t know how to navigate web3—they’ll want simplicity. Others will want every tool available to them. Web2.5 serves everyone. New users can pay with a credit card and have a user-friendly experience. At the same time, web3 adopters can take full advantage of innovation and opportunities with cryptocurrency payments and more.
Brands will serve web2 and web3 users for the internet's evolution, and they'll have a robust CRM foundation for the new economy.
