Unlocking Luxury and Innovation: Louis Vuitton's Venture into NFTs and Exclusive Member Clubs

Speaker 1: 0:05

Welcome to Marketing Meets Web 3, a podcast that helps marketers navigate the news trends, opportunities and insights surrounding Web 3. Today's conversation is for information purposes only and does not constitute legal or investment advice.

Speaker 2: 0:23

Hello Nick, how are you doing?

Speaker 3: 0:26

Hi Alberto, I'm doing great. How are you?

Speaker 2: 0:29

I'm feeling good. However, I'm feeling a bit sad as well. The first piece of news that we're going to be covering today reminded me that I don't have any cool bags in my bedroom or in my place where I get dressed. The bag is not something I have in my repertoire of clothing, and I am missing this part, I think. Do you have any bags?

Speaker 3: 0:56

You know what? I don't have any bags. I have a suitcase, but I don't have any kind of other luggage, or certainly nothing trendy.

Speaker 2: 1:07

No, it's not luggage. Come on, it's what you're talking about, like manly bags that you just have this bag and then you put stuff on it.

Speaker 3: 1:15

No, but you know what? On my last trip I was thinking I need one of those bags. Do you know where I can find one?

Speaker 2: 1:21

Of course. Of course, yes. So you could get a speedy bag which, with this name, is probably going to be very helpful for you in your travels if you want to get to your place or to the place that you're traveling in a quick manner. So you can get a speedy bag if you have a Louboutin Twasweet Trunk NFT valued at $43,780.

Speaker 3: 1:49

$43,000. Yes, well, you're going to have to know more about this bag before I can plunk down $43,000. But tell me about this NFT.

Speaker 2: 2:00

Yes, so if you have this NFT from Louboutin you know Louboutin, the brand. We've talked about them in the past. They are doing a lot of things with NFTs and, yeah, they just got this arrangement, this collaboration with Farrell Williams, the singer At least, I thought he was only a singer, but he's also a designer. I didn't know this part. So he's also a designer and he's designed this. Well, he's redesigned this speedy bag. This speedy bag, this model of a bag from Louboutin, is actually 100 years old, I believe, and it's been redesigned by Farrell Williams. And you can obtain this speedy bag if you have one of these NFTs that Louboutin put out for sale or made available in the past. So if you have one of these NFTs, then you receive both a digital and a tangible version of the named speedy bag. That's the story.

Speaker 3: 2:56

Interesting. Okay, so our friend Farrell. He's actually the creative director over at Louis Vuitton, so he's making a lot of these interesting decisions around experimentation and keeping Louis Vuitton on the edge of creativity.

Speaker 2: 3:12

I did know this.

Speaker 3: 3:14

I did know this.

Speaker 2: 3:16

I just didn't know that. I thought he was only a singer.

Speaker 3: 3:18

But I'm a music guy, so I learned about his new adventure and fashion through the music side of his career. This made him happy. I guess that's how you cross over from music to fashion. So he's making these decisions. He's helping Louis Vuitton kind of find their footing in new experimental ways, and so what they're doing here with this Treasure Trunk NFT being a sort of unlock right. It becomes this way that you unlock a digital and a physical version of this speedy bag. I think that's a pattern we've seen before in the space where the NFT serves as your key.

Speaker 3: 4:01

What they're also talking about is exclusive perks that go along with holding one of these Treasure Trunk NFTs. What those perks are, I don't think they've announced yet. The cool thing about NFTs and we've talked about this many times before is that once a customer has one of those NFTs and it's their key, if you will, to unlock these different kinds of perks or benefits. That's kind of a blank slate to create a relationship with customers as Louis Vuitton finds new ways to engage their customers, be it through something experiential, like they're going to go have an experience, maybe they're going to go to a con Like the film festival, or there's going to be some other event that's exclusive and sort of aligns with their audience's preferences and the things that they want to enjoy. Because they have that Treasure Trunk NFT now and it's an unlock, they can keep delivering as much value as they think is appropriate for their customers to create that relationship and have that ongoing conversation. This is a pattern we've seen before. I think this is a pattern we're going to keep seeing play out.

Speaker 3: 5:09

I think the other thing, too, that they're doing here is with a price tag like $43,000, I don't know about you, but that's a little out of my price range for a bag, is it Really A little bit? I'm more maybe the sub-1,000 and beyond that maybe the sub-$100. You can tell that I don't have very good bag taste, but their audience obviously knows bags a lot better and they understand the value of bags. The way they've priced this NFT, I think, aligns with their luxury ethos. They're definitely targeting their core customers who are used to paying really high prices for luxury items. They're not trying to use Web 3 as a method to pivot into a new audience, so much as creating a new way to engage the people that they're already creating relationships for their existing customers, those people that understand the value and just see this Web 3 aspect as a value add. This is an interesting lesson. Again, we've seen this before in the space, but curious. What do you think?

Speaker 2: 6:14

I like that comment that you made because in the past justifiably or maybe not a lot of comments have suggested that people that are interested in crypto and NFTs are people who are gambling. We have this idea of a person that likes these kind of digital assets. What Lovudon is doing here, in a way, is creating NFTs that appeal to their audience, to the audience that they have already, to people that are willing to pay over $10,000, $20,000, $50,000 for a bag. They are making these people see that NFTs could also be a very interesting thing. That is within the things that interest these kind of people and this kind of person. In a way, it's making this cool enough, if that's one way to put it for this audience. When I say cool, it could be said in any other way, but what I mean is that you are basically appealing to your audience and you're making NFTs that are ready for this kind of person. In the past, we probably had this very narrow version of who could be interested in these digital assets and NFTs. Before we called them NFTs. I guess now this could be called more like a digital collectible, which I guess sounds more like the kind of asset that they're trying to sell in here.

Speaker 2: 7:49

Another thing that we were talking about when we came across this piece of news and I think it would be very interesting for you to share your thoughts on this is that the other day I was in TikTok for no reason and I came across this account, and this account is basically a guy looking at strange things that he sees. In one of his videos he's looking at people in the runway, in a fashion runway, showcasing designs that nobody would ever try on and nobody would ever put on themselves to work in the street. Basically, the guy is showing his face, his expression, when looking at these designs. So it's something that is beyond normal or beyond reality, but that it somewhat makes its way to what becomes normal in the future. This all happens thanks to these fashion companies. You had a comment or an insight on this that I would like for you to share.

Speaker 3: 9:02

Yeah, the insight here is that, particularly in the fashion world, we see this a lot, where you have runway fashion, which is very high fashion, it's fashion. You've got these very esteemed designers that are doing crazy things with clothing. To your point, nobody would wear this stuff right, most people wouldn't even try it on. But what that's doing is these designers. They're experimenting. They're experimenting with material, they're experimenting with technique, they're experimenting with flow, they're experimenting with color. They're doing this all in a very large or a very big, exciting, interesting, shocking way. While we might look at that and say, well, that's not for me. I would never wear that Again. Most of us never would what inevitably happens is those designers then inform the designers that are a layer down that now are making maybe more luxury, but everyday clothing. Those designs influence the designers beneath them, which are the everyday clothing designers. Right, those are the clothes that you or I might wear. Inevitably, what happens is some of those ideas and those patterns and those trends they make their way down to even the clothes that you and I are wearing every day. That's where things like seasonality come from. When there's a new fashion trend that probably got started on a runway somewhere, that idea then made its way through the entire production chain for clothing until it's been made more accessible. It's something that I can go in and I can try on and say, yeah, I like that. This happens in other industries too.

Speaker 3: 10:41

Another idea that comes to mind is cars. You have the idea of a concept car. These concept cars, they're wild, they're way out there, they're very high performance or they're very high technology. Of course, you couldn't ever produce that car. You couldn't make that car a roadworthy car. What it does is it starts planting seeds and ideas and opportunities for experimentation to make elements of that car more roadworthy that do make their way into cars that we drive every day.

Speaker 3: 11:12

I think the same thing is happening with Web 3. With Web 3, we're in this place where we're seeing a lot of crazy experimentation. We're seeing things like $43,000 NFTs that they're not for the every person. There's a very small percentage of the world that's really actually going to use that or give value from that. Some of these patterns like exclusive access, like embracing the community, like creating the surface area to have better conversations with your customers, those ideas and those trends they're going to make their way into our everyday experiences as consumers. When you look at things like membership programs, for instance. You look at things like Walmart Plus and Prime, all of these programs that are designed to create this evergreen and ongoing conversation with the consumer, and it's all because of this access through this membership.

Speaker 3: 12:03

I think we're on the same path with Web 3. I think Web 3 in 10 years we're going to look back and say, oh yeah, remember that crazy idea that Louis Vuitton had when they sold that $43,000 NFT and unlocked that bag. That might be something that's very common for less expensive products, where you're getting the digital version when you buy the physical version, or vice versa, because who knows, by then maybe we are in the metaverse and we have a much more virtual first lifestyle. I guess my takeaway is that we're starting in a very abstract and experimental place and I think this is going to continue to distill its way down to much more practical applications for businesses and consumers.

Speaker 2: 12:44

Well, since you cannot afford a 43,000 back, probably the next piece of news is of no interest for you, but anyway I'm going to go for it. So Indosueth, that's a global wealth management arm of a French bank called Credit Agricole, has launched Le Cloutois or Le Club probably Le Club, but we need to explain this and that is a private NFT driven membership club for their, of course, high-end clientele who can afford these pricey bags. So this is what has happened by Indosueth. The reason why I said Le Cloutois or Le Club is because they're playing with the B. So when you say, when I say Le Club, the spelling is L-E and the space is C-L-U-3.

Speaker 2: 13:42

And you can read this as Le Club, which makes more sense. I didn't catch this before, but I knicked it and when you catch it, when you read it this way, then you realize that, oh, they're making a play here with the three, the club and the Web3 part of the whole idea. Anyway, the point is that this private bank is creating an exclusive membership and is basing this membership on NFTs. And this is cool because I think it's the first time we get to talk of a private bank doing something like this. What do you think?

Speaker 3: 14:19

Yeah. So again, this is probably out of my spending bracket, but this is interesting because we're seeing an industry that typically has either very lightly embraced Web3 or maybe just the crypto side of what we're talking about, and now they're starting to venture into some other ideas like NFT-driven membership. What's interesting here is that this is obviously aimed at a very small slice of their clientele. They're looking for affluent customers who can afford and probably become very good customers or have been very good customers for the bank, and they're offering very specific services that only their affluent customers are really going to take advantage of. But what they're doing here with this membership club is thinking about how do you start creating community out of that, and this is a trend that we've seen more widely with service-based businesses. We've seen it with financial services, where these companies are trying to go above and beyond just a transactional or even an advisory relationship. They're actually trying to create community amongst their customers.

Speaker 3: 15:36

And why that's important is because it reinforces the customer behavior, the customer mindset. You know, when you walk into a club and it's people just like you and you all have similarities and you talk about the same things and you can afford the same level of lifestyle, like there is a. There's something attractive about that to people, I think, and so they look at this and they say I want to stay in the club, right, and so once you get that pass to be in the club, you get the behind-the-scenes view of what it's like to be a client, and now you can get access to things that other clients can't get access to, and so it's a customer segmentation technique at the end of the day. But I think you know this is a pattern again that we'll start to see play out more and more, as businesses are really trying to understand, like where are my highest value customers and how can I provide the best experience to them so that they remain my high value customers?

Speaker 2: 16:27

for a while. We'll be right back after a word from our sponsor.

Speaker 1: 16:33

This podcast is brought to you by Step3, an engagement marketing platform that helps brands build deeper customer relationships. Step3 makes it easy to design custom branded membership programs that include rewards like exclusive content, vip event passes, merchandise discounts and more Unlock new revenue streams. It enhance customer lifetime value with Step3's easy to use, no code tools. Go to step3.io to learn more.

Speaker 2: 17:03

What I like from this piece of news is that they are using NFTs as a marketing and community creating tool. So the community creating part you've covered already, but they're also using this in a way to market their product, their services, to a Jhonger clientele. So apparently there are these people Jhonger people, people Jhonger than me that can can be clients of a private bank, and this private bank is trying to appeal to these people. They call them next generation clients that could be interested in NFTs and see that this is a trend that they want to get into. And if they see this happening in a private bank such as this one, they may think, oh, this private bank is cooler, is more Jhonger related or more Jhong oriented sorry kind of private bank and potentially appeal to this Jhonger generation of rich people who apparently exist somewhere. And yes, so I think the marketing part is also interesting.

Speaker 2: 18:16

And another aspect that I found interesting in this piece of news and that we are surprising this happen often now is that these NFTs that they are launching and that they are creating to give access to this community, they are also sell bound, meaning that you cannot sell them. You cannot, I mean, they belong to you. Basically, they are non transferable, and we saw this, if you remember, in the last episode when we were talking about Slurpies. Slurpies a completely different business than a private banking, but they were also doing sell bound tokens, and that was the first time we were talking about this, and I think that's a very interesting and I wonder if we're getting into some kind of trend in here, because Slurpies was doing it apparently because, well, they wanted to be in the safe side when it comes to regulation. In this case, in the case of, in the Suez, doing this with a sell bound token. It could be because of this reason as well, but they are also suggesting other reasons to make this NFT a sell bound one. So what do you think about this?

Speaker 3: 19:26

Yeah. So the takeaway here is that the soulbound NFTs which let's just scratch that word and say that they're non-transferable, because that's really what we want.

Speaker 2: 19:39

I like Salban.

Speaker 3: 19:42

This industry has a really bad habit of naming things in terrible ways but these non-transferable NFTs, then what they do is they kind of give the bank a guarantee that they're targeting the right customer. If you could transfer this membership card, if you will, to anybody you want, I could be a customer of the bank and they know that I'm the right customer in terms of my level of wealth and engagement patterns. But if I transferred that NFT to somebody outside of that circle and now they're in the club, that's not really accomplishing their goal of targeting the right audience. So making these membership passes non-transferable is an important part of ensuring that the target audience that the bank is looking for is being segmented properly.

Speaker 2: 20:33

Yeah, it's all about segmenting people. I guess One other way to segment your audience is to have a different price tag than your competitors or the rest of the industry, or to be located in a region that is far away from your competitors or your other companies in the industry. And I talk about this region differentiation because the next piece of news happened because a couple of people met in a skin in the French Alps, and while skin in the French Alps, they decided to create something, and the thing they decided to create was a Visa certified debit card for on-chain wallets by Nosis. Nosis has been around for a while. It started, I think, as a wallet, and then it's been growing its utility, its services, and has now announced that it's going to launch this debit card, and this one is going to be certified by Visa. Basically, the idea is that, with the cryptocurrencies that you hold in your wallets with Nosis, you will be able to pay with a Visa card and drawing from these funds in this wallet, which for some it may sound as something that makes sense, is normal, but for some others it will come as a surprise.

Speaker 2: 22:10

I think we'll spend a couple of minutes, or maybe a minute, explaining why this could be the case, but, yes, it's usually not the usual way to work, one where you go with your crypto holdings, your stablecoins, your cryptocoins and you go and pay with them in the wall, because they follow different systems than the traditional fiat money, and connecting these two has proved somewhat difficult in the past. So this development by Nosis and Visa is now, for this reason, something that I think makes out of sense and that is a very important change in this industry and also in the way the world is starting to accept cryptocurrencies and holdings in cryptocurrencies and allow them to flow into the traditional commerce. I think this is a very interesting part. I wonder if you've had trouble trying to pay with cryptocurrencies in the past.

Speaker 3: 23:18

Well, yes, and I think that's the play here, right Is that crypto has been a little bit of a walled garden when it comes to payments, because you can only spend your crypto if the merchant can accept crypto. So if they accept Bitcoin, great, they accept ETH, great. But that's very few merchants at this stage. A little more common around the world, but not so much in the United States. It's still a small fraction of merchants out there who actually accept crypto directly. So it makes using your crypto in more practical ways, or using it as anything other than a buy and hold investment or any kind of investment. It makes it difficult. It's harder as just an ordinary payment medium, and connecting decentralized wallets to a visa payment network is interesting, because if you want to spend your crypto today, a lot of the ways that you would do that is you would have to send your crypto to an exchange and that exchange then might issue a debit card. So Coinbase has a card and you can spend money from your exchange account, but of course, now you're relying on the exchange to hold your funds. You've seen how that can go the wrong way pretty quickly with places like FTX, and a lot of people are skittish right now about keeping their funds with an exchange, Some feeling that just holding on to your decentralized wallet is the safer way to go. But you're back to that problem of how do I actually use this in a meaningful way without the exchange in the middle, without a card connected to the exchange and without a merchant that accepts crypto. And the reality is, at that point you don't have an option.

Speaker 3: 24:52

And so Visa is creating this interesting connection now between this completely decentralized payment world, which is people holding their funds in their own crypto wallets and connecting that to a debit card.

Speaker 3: 25:04

So now I don't have to go to the exchange. Visa is effectively doing that exchange for me and getting me onto their payment network so that I can interact with merchants who don't even know anything about crypto. And what's cool about that, I think, is that this is starting to open the door to a world where maybe we see a lot less difference between crypto payments and other types of payment methods, and so crypto actually just becomes part of our modern digital lives, very similar to the way that e-commerce just became one of the channels that we use to purchase goods. So, yeah, this is an interesting development. I think they're definitely targeting a smaller audience here. This is a niche of people who have funds in their self-custodied wallets and want to spend those. But again kind of back to the fashion example. This is setting a course and a pattern that will likely play out in the years to come as crypto becomes more prevalent and consumers look for ways to use that crypto in more practical and meaningful ways.

Speaker 2: 26:05

Yeah, I don't know if you remember a few episodes back we're talking about probably maybe it was with a guest we're talking about how Web3 and crypto is going to, or maybe potentially metaverse, I don't remember but we're talking about how these new trends we're going to eventually establish in the way we work and the way we interact with reality, and I think it was you who said that. Well, basically, what's going to happen is that we're going to have Web3 stuff slowly get into our way, in the way we do things, and, without us noticing, we will be in Web3 and apparently nothing changed. But everything changed and in the news that we've covered today, I think we're seeing out of this, because just in the Louis Vuitton one we were talking about, well, you have an NFT and this NFT gives you access to not only another NFT which has happened a lot in the past but in this case also a tangible item. So now you have a digital item and this gives you access to a physical item. Then we talked about private banking and how private banking is starting to use NFTs.

Speaker 2: 27:19

And then we talked about Gnosis and making your crypto holdings available in the traditional commerce, and I wonder whether, in the future, you could see, then your crypto holdings become also managed by a private bank, like they do nowadays with traditional money. So everything in here is somewhat connected and it means it looks like Web3 is slowly getting into everything slowly, of course, because I think this is the first private bank that's doing something like this, and, as we said, gnosis is doing this and it's a big deal because it's probably one of the first and also Louis Vuitton was also the Vuitton in this. But yeah, we're slowly seeing this happen and yeah, it looks like what you said was going to happen is eventually happened. So I guess that's okay. Congrats.

Speaker 3: 28:15

Well, ask me again in five or 10 years. We'll see where this all lands. But I think that's a wrap for the day. So thanks for covering the news with me.

Speaker 2: 28:24

Thank you. Always a pleasure to be here with you.

Speaker 1: 28:29

Thanks for listening to Marketing Needs Web3. If you enjoyed today's episode, please like and subscribe in your favorite podcast app.