Do UHNWIs Get an NFT-shaped Hermès Birkin?

Non-tradable tokens appear everywhere you look these days, and the world of luxury is not exempt from hype – after all, there is huge earning potential. But it’s a new world out there, a wild west of the mysteries of fraud, swindling, theft, impersonation, and copyright law. Even when such headaches are priced in (aren’t such dangers part of the excitement of a new frontier?), labels run the risk of more traditional and longer-lasting issues. For example, loss of hard-earned reputation.

The “MetaBirkin” lawsuit recently pitted luxury retailer Hermès against Los Angeles-based digital artist Mason Rothschild, who describes himself as a “Web3 cowboy” on his Instagram account. It is a warning of the copyright implications of crypto art. Rothschild had created several digital assets (called “MetaBirkins”) as part of a collection of 100 digital NFTs inspired by the Birkin bag. Previously with Eric Ramirez “Baby Birkin”, 3D animation of a pregnant Hermès Birkin bag. All this was completely unauthorized.

The “Baby Birkin” NFT was sold at a Basic.Space auction for $23,500. Photograph: Mason Rothschild

Hermes was not happy. Rothschild for alleged “trademark infringement and watering use of the iconic Birkin name”. Fashion Business.

However, Rothschild claims that “MetaBirkins” is a work of art and is therefore protected by the First Amendment (which guarantees freedom of speech). According to him, these digital assets provide interpretation.”On the animal cruelty inherent in the manufacture of Hermès’ ultra-expensive leather bags

The Hermès and Rothschild case sparked a debate about trademark issues, unfair competition, and trademark dilution. It also showed that there is a demand for luxury-inspired NFTs. Indeed, “MetaBirkins” has risen significantly since its launch and has “closed to real Birkin levels – some selling as much as £40,000 crypto equivalent”. Elle magazine reports.

Despite the demand for Mason’s collection, it’s good to be skeptical about the long-term potential of NFTs, which lack the support of the luxury homes they “reference”. Some speculative acquisitions will continue to make headlines, but shows alone will not ensure sustainable growth. Often, investors will steer clear of them for fear that user interaction is based on fake information. Also, NFTs who claim to be inspired by brands risk being sued, causing their value to fall. Worse still, the brand may chase the buyer.

This is especially true given what luxury groups now do for themselves. Industry leaders like it Louis Vuitton, Gucci, Prada, Burberryand Givenchy they have already launched their own digital assets. And even Hermès is reportedly looking into the metaverse. “we are curious and interestedAxel Dumas, chairman of the board of directors of Hermès, told shareholders on April 20.

Naturally, the smartest thing for companies would be to connect NFTs to the best-selling products offered in the physical world. Imagine Hermès releasing limited edition NFTs linked to Birkin bags. In contrast, standalone NFTs will be more difficult to value, given that immutable tokens do not manage the same affinity and are not (yet) status tokens. Hermès can play the famine card – even in dematerialized reality.

Of course, it would shut itself off from a sizable chunk of traditional consumers who don’t interact with digital assets. This is far from trivial. 2021 poll by security.org66 percent of Americans had never heard of NFTs before, 14 percent had heard of NFTs before the survey but were unsure of what they were, 18 percent of respondents said they were “somewhat familiar” with NFTs, and only 2 percent said they were very stressed that. Familiar with NFTs, bought or sold them.

But this number will only grow. Now is the time for businesses to make NFTs work for them. Because for obscure brands like Hermès and Chanel, missteps can be fatal. If they become too accessible, they may lose their exclusive appeal – all reason for being. Even in a post-famine world (especially) they have to envision a scarcity strategy.

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