In the fifth installment of our Metaverse series, we focus on brand counterfeiting in the virtual world. Luxury brands have always been confronted with this issue in the real world and the recent rise of digital channels has amplified it. With little to no clear guidelines of IP rights in the Metaverse, experts from Ykone, an international influencer marketing agency, give us their point of view on the issue of counterfeits, which some brands are already facing.
To fulfill luxury standards, selectivity and exclusivity are a must. In the luxury sector, we know that distribution must be the definition of selectivity and exclusivity. The ultimate objective is above all to control the distribution to guarantee the image and reputation of the house in question. However, luxury houses have been obliged to modify their distribution strategies following the evolution of consumption trends and society at large. Beyond the sale or resale of luxury products, brands, regardless of their positioning, have always been confronted with the same issue, counterfeiting. They succeed, each at their own pace to differentiate themselves through their invaluable know-how, which allows them to spot real products from the fake. In this context of evolution, a new type of sale is possible. For those brands that wish to do so, it’s now possible to buy luxury products not only online but virtually and especially via the Metaverse. Yes, it’s an original and bold idea, but sometimes problematic.
Luxury products VS Metaverse, when opposites attract
The antithesis is that luxury should be a sector that strictly controls its distribution channels, in order to minimize collateral damage and maximize sales. But luxury is also supposed to bring us personal satisfaction through the many experiences (customer, store, purchase) that a sales advisor brings to our visit in the store. This ranges from the sensory experience, to the unique know-how of a house that has a history, a storytelling etc. On the other hand, this prestigious sensory experience no longer exists in the world of the metaverse.
In this virtual world and considering that we have nothing more to learn from these houses that we already know, it would now be a matter of virtually buying a luxury product just because it’s a luxury product. Not necessarily, you may say. It’s true that by reconciling the Metaverse and luxury, the objective is also to touch and attract a new clientele adept of digital but also and especially to give everyone access to a parallel world in another form. Combining augmented reality and virtual reality, the Metaverse aims to integrate us in a parallel world where we could work, socialize and entertain ourselves by buying, via NFT, virtual products, which will officially belong to us but which we will never touch. Once this (somewhat complex) concept has been assimilated, let’s first look to the facts.
A virtual world that faces the problems of the real world.
In our case, we want to focus on a fight that all brands face, counterfeiting. It’s true that imagining a parallel world where we could do everything can be quite dreamy. That’s why many brands have started to innovate by offering their products in the form of NFT. Among them we can find Guerlain, Gucci, Bvlgari, Porsche, Balmain or Nike. In this approach, the objective of the houses is to reach a younger clientele, while offering an innovative customer experience that would reinforce the feeling of rarity and attachment to the brand. As said before with the Metaverse, everything is possible, but then how can brands limit and secure the framework of their product use? This virtual world, for the moment without limits, allows everyone to use a brand’s products as they want. Thus, brands and luxury houses have a strong interest in securing and controlling the use of their image in order to protect their reputation in the face of this new digital phenomenon.
Metabirkin, the virtual variation of an iconic bag: a tribute or forgery?
Every artist finds his inspiration where he wants. But sometimes the inspiration of the content creator tends to slightly reproduce the initial brand.
The Metaverse being a virtual space not very well exploited at all levels and without a really structured framework, Mason Rothschild gave the top start of the brand-artist frictions. After drawing inspiration from the luxury house Hermes and then bringing to life, via NFT, a hundred fur bags representing (heavily) the Birkin model, Mason found himself making excellent crypto-currency profits selling his digital works.
Unfortunately, the house with the big H did not see this declination of mini birkin NFT of a very good eye since the approach of the artist was quickly followed by a legal procedure from the luxury house.
But can we talk about counterfeiting when it comes to a product that exists virtually? For the luxury brands that are keen on this new technology and also as a result of the offer, it seems that the question is becoming more and more relevant. In principle, the legal term, counterfeit, applies to tangible items. However, with NFTs sold in a virtual world, we are dealing with elements that are intangible. Logic would dictate that intellectual property rights should also apply in the virtual world. Nevertheless, it seems inevitable that IP rights will become even stricter than the current ones, since in order to counterfeit an NFT, it would be a matter of copying/pasting the digital work (despite the multitude of codes that are given to us when we acquire them) or changing a small element that would make the difference from the initial work. Finally, we could ask ourselves how this growing phenomenon will be managed and regulated in the future? The question remains.
Source: Retail in Asia