With today’s technology, we may now all take digital shopping for granted, but this was a pipe dream only 20 or 30 years ago. Fast forward,
and Web3 – the next iteration of the internet – is leading the next digital revolution. But it is NFTs (non-fungible tokens) and the metaverse – a new immersive 3D world enabled by Web3 – that are gaining the most attention in the luxury sector for their potential to engage with consumers in entirely new ways and, in doing so, open up new sources of revenue, brand equity and customer acquisition.
Web3 refers to the next iteration of the internet that is built using decentralized blockchains with a focus on creator and community-run networks73. The vision for Web3 includes cryptocurrencies, NFTs (non-fungible tokens), metaverse, decentralized finance and more
– with users having more control over, and a financial stake in, the web communities to which they belong74.
The metaverse remains an evolving concept but can perhaps best be thought of as immersive space that connects the digital and real-world lives of users. By incorporating technologies like AR, virtual reality (VR), AR Cloud, Internet of Things, 5G, artificial intelligence and blockchain, the metaverse offers new digital ways to work, learn, shop, socialize, and relax75.
While some metaverse experiences do not require users to be present in an embodied form, for others an ‘avatar’ is a required – a 3D representation of oneself (photorealistic or fantasy), which the user controls.
A non-fungible (meaning non-replaceable, ‘one-of-a-kind’) token is a unique digital code that represents a digital asset which could be an image, audio, music video or item in a video game. An NFT is secured and stored on a blockchain with immutable metadata and ownership history76. NFTs also offer the potential for ‘smart contracts’ which allow the creator to embed royalties within the NFT. Such royalties ensure the original creator of the NFT receives a percentage of the sale price each time the NFT is traded on a secondary market.
Source: De Beers Insight Report