Gaming, AI, NFTs: Will Balenciaga’s big Web3 play pay off?

After a brief hiatus, Balenciaga is gearing up to reenter the non-fungible token (NFT) market. The Kering-owned maison announced the release of an exclusive hardware NFT wallet in collaboration with Web3 spearheader Ledger last month. The case, powered by near-field communication (NFC) technology, is designed to hold Ledger’s new Stax device – a gadget that enables owners to trade, swap, and manage their digital tokens and cryptocurrency. “The Balenciaga team always seems to be beyond the front lines, seeing ahead into the future to where culture will be tomorrow,” Ian Rogers, Ledger’s Chief Experience Officer tells Jing Daily. “When they contacted us about a potential collaboration we were immediately excited.” The pouch comprises logo-embossed soft leather, alongside a logo-engraved, spring-loaded metal ring that can be clipped to a purse, belt loop, or keychain. It’s also customizable with a set of individual charms. According to Balenciaga’s press release, it will be made available to the public in October. The news arrived just days after Balenciaga dropped its latest NFC-connected merch under its Balenciaga Music subsidiary. The capsule line, featuring physical goods embedded with NFC chips, can be scanned using a smartphone to access exclusive content including playlists compiled by musician BFRND (the composer behind all of Balenciaga’s shows since 2017) and a new mini-game concept that takes players through the brand’s iconic show sets over the years. The game is accessible via a dedicated site, WeChat, or on a touchscreen in select Balenciaga stores. Regaining momentum Balenciaga has been slowly chipping away at its Web3 portfolio since 2020; a time when many luxury brands pivoted to digital-first strategies to combat plunging physical sales. In December 2020, the brand released its Fall 2021 fashion collection in the form of a video game, coined Afterworld: The Age of Tomorrow. The project “demonstrated how virtual worlds can provide an infinite canvas for communication and storytelling,” says Barney Lynch, account director at metaverse and gaming platform Geeiq. Then, in September 2021, the house teamed up with Fortnite on a collection of co-branded phygital products. It was peak time to launch, tapping both the game’s existing fervent fanbase alongside the tsunami of consumers that turned to gaming during lockdown. Following its high-profile partnership with Fortnite, Balenciaga’s Web3 ambitions slipped largely under the radar, overshadowed by the widely documented moves of other luxury disruptors, such as Louis Vuitton and Gucci. This year, the maison’s tech roadmap is regaining momentum. Adding to the mix One area Balenciaga is investing heavily in is NFC technology. Via its Balenciaga Music line – the label’s sonic side project first introduced in 2020 – the brand has been consistently releasing physical goods equipped with NFC chips since last year. When scanned, the chip unlocks access to audio playlists exclusively curated by creative director Demna. While the NFC tags aren't connected to the blockchain (the tech is powered by Web2 digital ID facilitator Eon), future trends and Web3 expert Anne-Liese Prem notes that the implementation of the tech still demonstrates Balenciaga's commitment to merging digital-first infrastructure with the physical world. “Balenciaga has been leading the way toward connected fashion,” Prem adds. Lynch concurs. Though simplistic in its execution, he says, Balenciaga’s endorsement is “reflective of how technology is being used to provide elevated experiences in fashion that push it beyond just physical clothing, connecting other artistic mediums and in doing so provide greater insight into the inspirations of those behind the brand.” Engaging China’s metaverse The maison has also expanded its ambitions towards tackling China’s complex Web3 landscape to overtake competitors. Last week, the brand announced a new collaboration alongside Need for Speed mobile China. Available only in the mainland from July 11, gamers can equip both their car and avatars in Balenciaga-branded skins. The brand has previously capitalized on peak retail periods via uber-localized, virtual activations to engage digital-natives. For China’s 520 shopping festival in 2022, the maison released two holiday-themed mini games via its WeChat mini-program, alongside an NFT-powered avatar. It took the same approach for the 520 season in 2023; this time introducing augmented reality into the mix. Again accessed via its official WeChat channel, players entered a special virtual world as farmers wearing items from the new 520 collection, where they were encouraged to learn about regenerative agriculture and complete tasks to win limited edition stickers, wallpapers, and wish cards. Competition heats up Web3 has witnessed a notable shift in perception globally, with luxury consumers becoming more receptive to emerging tech and its use-cases. While wider adoption offers more scope to experiment for brands, it also means expectations are higher. And with almost every major luxury player now having released a Web3-infused project, impressing consumers isn’t an easy feat. “What we are seeing now is a much more measured approach,” says Prem. LVMH competitor Louis Vuitton and fellow Kering-owned Gucci, for example, have earned gold status in the digital realm with their elite Web3 communities. Rival OTB Group’s Diesel and Maison Margiela have similarly introduced their own NFT projects tailored to consumer interests. In 2022, Fendi also released its own selection of tech wearables alongside Ledger, targeting crypto enthusiasts with high spending power. With Balenciaga at risk of lagging behind, the brand is taking a different route to cut through the noise; a move which Geeiq’s Lynch believes is on-brand for the maison. “Balenciaga’s approach to gaming and Web3 has been expectedly idiosyncratic,” Lynch says. For example, during its FW24 collection at Paris Fashion Week in February, the house rode the current artificial intelligence wave by plastering the historic Dome des Invalides in a deluge of LED screens, each rolling their own series of AI-generated images. Despite the AI stunt generating widespread media attention, Prem argues that where Balenciaga really shines is through its commitment to gaming. From the Fortnite collab to its evolving mini-game playbook, Prem notes that gamification is an arena the brand should lean further into to keep the virtual wheels turning. “It’s their way of building a strong community of superfan customers who constantly crave to be surprised and inspired by new experiences,” she adds. As Balenciaga continues to build a brand based on capturing, creating, and challenging the zeitgeist, cracking Web3 is the next logical step. Can a disruptor that has successfully merged luxury with innovation in the physical world pull off the same feat in the digital one, too?

Gaming, AI, NFTs: Will Balenciaga’s big Web3 play pay off?

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Published June 26, 2024

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Gaming, AI, NFTs: Will Balenciaga’s big Web3 play pay off?