Redefining luxury experience through the metaverse

Abstract

Luxury Goods market is a nearly $270 Billion dollar industry globally and is expected to rise of $352.84 Billion dollars by 2027. However, with the rise of the digital revolution, the definitions of a luxury item have broadened beyond the traditional definitions of what a luxury item entails. One of the major drivers behind the digital luxury revolution has been the Metaverse universe, that has clearly provided a platform for luxury to expand its domains without diluting their value. It is quite confusing for people to differentiate between premium products and luxury products. There are certain brands that are associated with luxury, Louis Vuitton, Chanel, Armani, Patek Phillipe etc. For some people, even Fossil, Hugo Boss etc are luxury products. While common perception correlates luxury with the price of the product, but true luxury is not about the price of the product. True luxury is aspirational. Translating this aspirational value into the digital space, where accessibility and usage can be easily proliferated and massy, becomes a challenge for a luxury brand trying to enter the digital landscape. At the same time, the rising wealthy class has resulted in a increased need for luxury products in the market, which again goes against the puritan view of controlling the supply. A need to adapt and change, while enhancing profitability has resulted in many mass-brands introducing premium offerings while traditional luxury brands producing affordable and accessible lines. This has also created a diffused understanding of luxury and a luxury landscape that encouraged rise of masstige products. In this report, we look at the how luxury brands are adapting to the digital revolution, while trying to navigate the sharky waters of brand equity, heritage, aspiration and profitability.