Sascha Rowold: Web3 can redefine luxury, but it needs a long-term vision

Sascha Rowold, LVMH’s Interim CMO/CDO, spoke at the “Adoption 2024” conference in Tokyo last week. Here is what we took away from his talk.

The luxury industry and Web3 technologies seem like a match made in heaven, both valuing creativity, innovation, and exclusivity. However, the presentation unveils a stark disconnect between the two worlds. Sascha, a luxury insider and brand veteran who has previously made Birkenstock a global success story, provides a critical yet constructive analysis of the current landscape.

Several high-profile attempts by luxury brands to integrate Web3, primarily through NFTs, are examined. Loro Piana’s NFT-linked t-shirt (retailing at around USD 1,800), Hublot’s watches with accompanying NFTs, and Rimowa’s limited-edition suitcases all fall short of demonstrating the revolutionary spirit of Web3. Even Louis Vuitton’s ambitious “Via Treasure Trunk” project, while garnering significant media attention, hasn’t translated into tangible value or sustained buzz. These examples expose a fundamental misunderstanding: creating depreciating digital assets (such as NFTs that go to zero value) contradicts the very essence of luxury, which thrives on enduring value and exclusivity.

The root cause of this disconnect lies in the communication chasm between the tech-driven Web3 space and the story-driven luxury industry. While luxury brands excel at weaving captivating narratives of heritage, craftsmanship, and aspiration, Web3 companies struggle to articulate their value proposition in a language that resonates with luxury executives. Instead of highlighting brand impact, the focus remains on technology, preventing Web3 from being truly woven into the fabric of luxury brands.

To bridge this gap and unlock Web3’s transformative potential, the Sascha proposes a multi-faceted approach. Patience and a focus on longevity should replace short-term hype cycles. Web3 initiatives must align with core brand KPIs, showcasing their contribution to brand equity and customer lifetime value. Instead of force-feeding technology, brands need to engage consumers authentically, educating and inspiring them by showcasing the benefits of Web3 in a relatable way. The vast marketing power of luxury brands can be harnessed to tell compelling stories that demystify Web3 and highlight its potential.

Don’t just build technology, build stories. Luxury thrives on narrative, not ones and zeros.

Furthermore, Web3 experiences should be designed to offer genuine value and exclusivity, going beyond mere financial incentives and appealing to the aspirations of luxury consumers. Buying a USD 40,000 trunk only to be rewarded with the opportunity to purchase other limited USD 9,000 clothing items will not be sufficient. Providing scarce experiences, such first row seating during fashion week, is a completely different, and brand-aligned proposition. Crucially, every initiative must strengthen the brand’s image and heritage, ensuring that embracing the new doesn’t come at the cost of diluting the old.

Ultimately, Web3 has the power to redefine luxury, fostering inclusivity and accessibility while preserving the core values of heritage and craftsmanship. Achieving this vision requires a paradigm shift. Technologists must evolve into brand builders, prioritizing value creation and storytelling. Simultaneously, luxury brands must embrace the transformative power of Web3, weaving it into their DNA instead of treating it as a passing fad.

The future of luxury is inclusive, not exclusive. Web3 can bridge that gap, but we need to build the bridge together.

The path forward is clear. By working in unison, the luxury industry and the Web3 community can usher in a new era of luxury, where technology and tradition harmonize to create truly meaningful and enduring experiences.

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