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L’Oréal and Louis Vuitton Moet Hennessy (LMVH) have both taken tentative steps into the metaverse. Senior leaders explain how they’re approaching this new space – from deciding which brands in their portfolios are best suited to the emerging environment to how they find the budget to fund their experiments.
There’s no shortage of brands dabbling in the ‘metaverse,’ creating something of a FOMO moment in the industry. Nike launched ‘Nikeland’ last year and now boasts over 7 million visitors to the metaverse story. Gucci claims that over 18 million people have engaged with it on Roblox, setting in motion a wave of luxury brands trying to replicate its success. This week at the Cannes Lions festival the program is littered with sessions on the buzzword du jour, while agencies including Publicis (which currently has over 1,000 staff now working on metaverse projects), McCann and Wunderman have set their stalls early by creating their own experiences.
L’Oréal and LMVH are already some way down the line with their metaverse strategies. But that’s not to say they are any the wiser than those just starting out. Both are keen to stress they are still very much in ‘experiment’ mode, still trying to understand its various iterations and the long-term potential.
Here’s what they’ve discovered.
L’Oréal is prioritizing three brands for its metaverse trials: YSL, Mugler and NYX Professional Make-up.
Testing the waters on NFTs, it recently launched a branded digital wallet. People can claim up to 10,000 free NTFs from L’Oréal to store in this wallet, and throughout the year they can be used to unlock exclusive digital experiences, real-world events and product drops.
There’s no measure of success on this activity – it’s simply about getting its customers used to engaging with the brand in new web3 environments.
“We want to lay down the foundations and understand what beauty will look like there and rooting the brand DNA there. We’re looking at it through the prism of community,” explains Asmita Dubey, chief digital and marketing officer at L’Oréal.
“We’re thinking about immersive experiences. We know that we will go from 2D to 3D beauty, so what does that look like? And from there we’re looking at virtual influence, avatars, products and collectibles. We’re exploring all of that to understand the new visual codes, the new ways people see beauty [in the metaverse].”
More broadly, she’s looking at forging new partnerships with companies and individuals L’Oréal hadn’t previously considered.
“There’s a diverse new ecosystem of partners that we need to start working with. We’re working with new tech platforms, we’re partnering with Ariani – a rising platform in web3 – and companies in the world of crypto. We need to partner with a very new ecosystem,” she continues.
This is most developed with NYX. It’s a make-up brand targeted at professional make-up artists largely through social media marketing.
But it’s now thinking about how the brand can empower a new generation of creators, and has set itself the task of what Dubey describes as “the first-ever decentralized record label for creators in web3.”
“There are so many 3D artists today who are doing phenomenal work on face and they’re into the digital beauty and make-up artistry. That’s where we’re starting. It means the brand will engage with more 3D artists, animators and even software engineers. We will start working with blockchain experts,” she says.
It’s making headway in that effort. NYX recently collaborated with Sandbox to create 8,000 Pride avatars that were ‘made up’ using the brand.
Taking a slightly different approach is LMVH, the luxury giant that houses brands including Givenchy, Louis Vuitton and Christian Dior.
It’s hired Nelly Mensah into the new role of ‘head of metaverse and crypto,’ indicating that it sees this as a serious revenue generator down the line. Mensah is a Deloitte Digital alumna and previously led beauty giant Sephora’s digital and innovation efforts. She now heads up all web3 and metaverse efforts globally for LVMH.
“We’re really thinking about four use cases primarily,” she explained. “One is client storytelling and immersive brand experiences. It’s about transparency, traceability and tracking for authenticity. We’re also looking at digital twins and having an extension of all of our product offerings in the virtual world that allow for personalization and expressing yourself. And finally accepting cryptocurrency for payments.”
Part of her role is distilling knowledge to individual brand owners, one of whom is Massimo Paloni, chief operations and innovation officer at Bulgari. Instead of creating an experience on one of the established platforms – such as Roblox – he drafted in Italian creative tech studio Experiency to help it build a metaverse from scratch.
“The metaverses today don’t have high enough quality to support the positioning of a luxury brand. So what we’re doing is creating our own proprietary metaverse. It’s a concept. We’re creating a learning curve, designing spaces. It’s another kind of creativity,” Paloni explains.
“We’re trying to prepare the culture and process of the company. And when the future opens to metaverses able to interact we’ll be ready.”
To get it ready for that moment, the key job for now is to create 3D digital versions of its entire product catalog. It’s a tricky process to make its diamonds look realistic in this space, and it’s taking the agency anywhere from a week to a month to create a single piece of jewelry.
Building a metaverse from scratch and spending weeks at a time creating digital diamond necklaces doesn’t come cheaply.
“Some brands more advanced in this have created their own P&L [for the metaverse]. But at the moment we’re not there,” says Paloni on where the budget is coming from. “The reality is that with innovation the budget is always opportunistic. There was a consensus around this, so we didn’t.”
KPMG, one of the Big Four accounting firms in Canada and the United States, has revealed the opening of its first metaverse collaboration hub to help its employees and clients pursue growth opportunities in the digital era.
KPMG is entering the metaverse with a new collaboration hub that will connect employees, clients and others with Web3. The company is making a collective $30 million investment this year in Web3 experiences, with the metaverse hub as the “signature piece.”
According to a Tuesday report by Fortune, the hub will be focused on education, collaboration, training, events and workshops with Cliff Justice, KPMG U.S. leader of enterprise innovation claiming that it is presently being utilized for such things but that KPMG intends to hire people to build it and expand it over time.
The long-term objective for the company is to examine other potential metaverse use cases such as health care, consumer, retail, media and financial services.
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Laura Newinski, deputy chair and chief operating officer at KPMG in the U.S., said:
“The metaverse is a market opportunity, a way to re-engage talent, and a path to connect people across the globe through a new collaborative experience.”
The companies will continue to explore possibilities in the crypto and Web 3.0 space, co-create new tools and solutions that provide critical insights, launch immersive learning and development platforms, recruit talent to contribute knowledge and help navigate the changing confluence of the physical and digital worlds, among other things, as part of its innovation strategy.
The COVID-19 epidemic sparked people’s interest in the metaverse. There has been an increase in the desire for methods to make internet contact more lifelike as more individuals work and go to school online. JPMorgan, one of the biggest banks in the United States, made headlines earlier this year by publishing a paper suggesting metaverse technology was a “one trillion-dollar opportunity,” along with establishing its own virtual headquarters in the Decentraland (MANA) metaverse.
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