Louis Vuitton has its Treasure Trunks, IWC has the Diamond Hand Club, and Prada has its Timecaspule drops. What these three things have in common is that they are digital memberships that offer consumers the opportunity to access exclusive products and experiences that have been built for communities in the metaverse.
Welcome to the new world of the digital VIP, where bragging rights aren’t just about being allowed a glass of champagne and entry to the brand’s private salons. These days, it’s about being hand-selected for the opportunity of paying for an exclusive membership that costs €39,000, or claiming a token through the purchase of a specific watch to redeem online, or being able to get your hands on a digital product drop that lands you an invitation to a fashion show in Milan. Here, hyper-exclusivity is the name of the game.
And what these memberships reveal is how the world of the Very Important Customer is changing from the viewpoint of these luxury brands and, more importantly, how they will evolve. After all, if one of the biggest luxury brands in the world is choosing to forge a path in the metaverse through an exclusive membership programme, it stands to reason that others will follow.
So when Louis Vuitton announced it was launching its Treasure Trunks in early June, it was a signal about its long-term strategy and vision in the digital world. Where only a lucky few can own a NFT and its physical counterpart - making Louis Vuitton’s Treasure Trunks, a rare collectible and a rare opportunity to belong to an exclusive online community where the brand selectively picks who it believes should be members.
Currently available only to those based in the US, Canada, France, UK, Germany, Japan and Australia, those interested were invited to register via a waiting list on June 8. After providing their personal details and linking their crypto wallets, those selected were invited on June 14 to explore the new world of its new digital initiative Via through a private website. Then, two days later, they were given the opportunity to purchase their physically-backed NFT.
And whilst Louis Vuitton’s “Via”, named after the Latin word for road, comes two years after its last foray into the metaverse, which was previously a mobile video game called Louis the Game, it still demonstrates that the brand is paying to play in the digital space.
After all, as LVMH chief executive Bernard Arnault said in an earnings call early last year: “It is not our objective to sell virtual sneakers at €10. We are not interested in that.”
What it is interested in, however, is deepening that relationship with its VIP customers.
For Robert Burke, Chairman and CEO of the Robert Burke Associates, launching these exclusive memberships is about trying to add another layer of richness to the VIP experience.
“It becomes bragging rights for the customers at that level due to the exclusivity,” he told Luxury Society. “This is not about the money for LV, rather, it’s about strengthening relationships with their ultra VIP customers.”
“I don’t think their intention is to make this a mass-market business,” he added. “This is about rare, exclusive, and highly curated products, and similarly to their watch business, it’s more of a passion project and brand building for LV.”
It also allows Louis Vuitton to increase the idea of scarcity and exclusivity, particularly through the new medium of digital assets, said Mario Ortelli, Managing Partner of Ortelli&Co, a strategy and M&A advisory company specialised in the luxury goods industry.
“I am totally convinced that in the long run, there is a market for this, and the brands will capitalise on the money they can make out of the digital assets,” said Ortelli. “Louis Vuitton does not have to rush into something new: it always chooses to launch new initiatives when it believes in the right way for the brand, and it uses all of its investment and know-how capabilities to make a success.”
It’s a view shared by Burke. “It’s important for brands to maintain credibility, reputation, integrity, and image, so they did not want to take a risk with that. Pharrell certainly could have played a role with this decision given the timing,” he said, noting that the brand brought in five Web3 industry experts to help guide them through the process. “LV is always extremely strategic and patient when it comes to a new product offering.”
For Christopher Morency, journalist and consultant, what remains a lingering question is how they maintain the excitement and momentum of such initiatives. “I think it's super smart,” he said. “I will be curious to see how well they roll this out and what the perks/rewards are given within the membership. And more importantly, if they can keep the momentum going.”
“If you create a community, you have to maintain the hype and the perceived value for those who receive it,” said Ortelli. “This is the only challenge I can see, but we know that LVMH has one of the best marketing teams in the world, so I would bet on them being able to keep the enthusiasm going.”
Indeed, when hype goes hand in hand with the bragging rights of having these memberships to brand, maintaining that same level of excitement, interest and curiosity becomes a challenge that luxury brands must maintain to justify their high cost of entry.
“I wonder how they might consider expanding this concept and include more of these memberships or more of these trunks in the future, and how this manifests in the physical world,” said Morency, who was previously at Nanushka as Chief Brand Officer as well as the brand's mother company Vanguards.
“I believe these members can go even deeper,” he added. “What if they gave access to a fashion show, or the secret floor in the top boutiques where there’s always gifting, or a free meal at one of the restaurants that LVMH owns? Meeting some of their talents, or a visit to their factories during the special VIP days where you can actually go and do these things?”
More than a year on from the launch of its NFT Timecapsule collection, Prada’s Crypted community have been offered such experiences as Morency describes, including trips to the brand’s fashion week shows in Milan and to its cultural events such as Prada Extends and Prada Mode.
Likewise, with IWC Diamond Hand Club, its members have enjoyed benefits like access to a token-gated section of its site, such as a microverse on spatial.io, as well as events like private concerts and the opportunity to interact with professionals in sports, music, arts and watch craftsmanship. What’s more, the longer someone holds a membership, the more utilities are unlocked for that individual, demonstrating the kind of long-term approach that Louis Vuitton could consider taking with its Treasure Trunks.
What is important to note is each company must go into how their memberships with their own individual goals and aims of what they want to achieve with their brand. For example, for Louis Vuitton, the trunks are about storytelling and tapping into the unique and iconic history of Louis Vuitton trunks, notes Burke.
And for other brands considering how they might venture into this space, it is worth thinking about what the specific things are that help deepen brand loyalty or enrich your storytelling and consumers’ experience with that.
“These kinds of activities are very good for micro-segmenting,” said Ortelli. “And when you micro-segmenting the customer base of a brand that has billions of revenues, you must ensure that you remain relevant and top of mind for each micro-segment.”
“I think it's gonna be interesting to see how other brands are going to create these membership packages, because yes, the technology is there, but what I really find interesting is what’s in these packages?” said Morency. “Many brands keep it very much connected to selling. Like if you buy this digital product, you get the physical one for free. But it takes a lot more to build deeper loyalty with the brand.”
“How brands can expand these loyalty programmes on different levels?” he added. “Obviously, it’s a huge, huge business for these luxury retailers and brands to speak to the VICs, but at the same time, what is the loyalty programme for the person that buys $50,000 a year of products, or even $5,000 a year? How does this going to trickle down for the majority of the clients in the lower membership programmes? This is just the tip of the iceberg.”
Indeed, who is to say that communities should be for the ultra-rich? Membership programmes could be something that could be expanded across multiple customer segments so long as no dilution occurs to compromise the other levels.
“Brands now are building out universes to such a large extent, but they're no longer fashion brands,” said Morency. “It makes a lot of sense for fashion brands to have a bigger membership programme, not just for the VIPs but overall, because they now have so many touch points with the customer that they can actually offer them a lot more and still own that brand experience.”