Despite Market Volatility Luxury Brands Look To Stay Hip With Crypto
The Digital Wears Prada
Throughout 2022, cryptocurrencies like Bitcoin (BTC) have seen their values plummet. Rising inflation and the Federal Reserve’s rate hikes have cooled investors’ appetites for growth-oriented assets, including digital tokens. That said, there’s some brands that are still interested in the space, citing long-term potential.
Last month, for example, Kering SA (PPRUY) announced both Gucci and Balenciaga would start allowing customers to pay with crypto. For Gucci, the pilot program is located in New York and four other US cities. Balenciaga’s program will test in New York and Los Angeles. Also in May, luxury watchmaker Tag Heuer (LVMUY) announced it would accept crypto payments in the US.
Attracting the Under-30s
Industry observers say while online shopping has exploded in recent years, luxury ecommerce has slightly lagged behind. Younger shoppers, meanwhile, are increasingly comfortable with making digital purchases and owning digital assets. A large number of people under the age of 40 have invested in digital currencies, especially in the US.
In an effort to keep up with the shift and capture the attention of the younger audience, multiple brands are experimenting with crypto to grow their under-30 consumer base. This includes Gucci, Burberry (BURBY), Prada (PRDSY), and Versace (CPRI).
Farfetch in Focus
Last week, Farfetch, which operates an online marketplace and offers products from more than 1,400 luxury brands, announced that VIP customers will be able to use Bitcoin, Ethereum (ETH), Binance Coin (BNB) and other digital coins for purchases in the coming months. Its CEO says luxury brands are looking to be where consumers are today and where they’re going tomorrow.
Farfetch’s revenue checked in at $2.3 billion in 2021, up 35% year-over-year. Some of its physical stores have already tested the acceptance of crypto, such as Browns, a department store in London. It seems to be more than just a phase for the UK-based company.
Although the crypto space is struggling recently, some still believe in the underlying technology that is popular with younger consumers. These are the shoppers that are more inclined to make digital first purchases, which may be why some brands want to be active in the space even if there are growing pains along the way.
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