2022 may have been the year of excitement for Web3, but 2023 appears to be the year in which the plans are put into action. Luxury brands are now shifting their focus to concrete applications that are closely tied to physical products rather than digital-only assets that exist solely for the metaverse.
The ultimate goal is to utilize cryptocurrency and digital assets for transactional purposes.
Luxury in Web3
The luxury goods industry has gradually embraced Web3, and several brands catering to this market have succeeded in establishing a presence in the space. However, there’s more to it than simply tapping into a sector that’s willing to spend large sums of money. These brands are also bringing their loyal fan base to Web3.
Ralph Lauren recently announced a partnership with BitPay to accept cryptocurrency at its new store in Miami’s Design District for the first time. The new offering also includes a cryptocurrency-based experience that includes gifting NFTs through a multi-tiered partnership with the online leisure community Poolsuite, which it says is “deeply rooted in the Miami lifestyle.”
According to Merrick Theobald, BitPay’s Vice President of Marketing, consumers are gravitating toward using cryptocurrency to buy luxury goods due to its popularity and the emergence of easy-to-use platforms. In an interview with CryptoPotato, the executive stated:
“One of the most difficult aspects of widespread cryptocurrency adoption will be educating people about blockchain technology, wallets, and how to properly send digital assets to the correct addresses. These are all critical points that both consumers and merchants should be aware of.”
According to data compiled by BitPay, almost 20% of items purchased with cryptocurrency last year were luxury goods. This includes gold, jewelry, watches, exotic cars, boats, real estate, yachts, and handbags. While cars and yachts accounted for 20% of the total figure, jewelry and apparel accounted for 15%, and watches accounted for 12%.
The American apparel retailer’s decision to test the waters in Web3 reflects a growing trend of luxury goods becoming popular with the cryptocurrency crowd. But what does this mean for the future of cryptocurrency payment adoption?
Cracking the Mainstream Appeal
For true cryptocurrency adoption, everyday essentials must be paid for with cryptocurrency or digital assets. This has been a controversial topic for the most part. However, Theobald believes that this trend will soon follow, with luxury goods paving the way.
“As digital assets gain traction, I believe we’ll see a trickle-down effect from luxury goods to everyday essentials being paid for in cryptocurrency. In fact, we’re already seeing this happen in real-time with El Salvador adopting Bitcoin as legal tender and many online merchants beginning to offer cryptocurrency payment options at checkout.”
The executive also believes that peer-to-peer transfer services and education will serve as an effective on-ramp for cryptocurrency as more people demand an alternative in the transition to a digital economy.