Projections on the Future of the Luxury Industry — Metaverse, AI, NFTs, and more
While the luxury goods industry might not be the first thing you think of when discussing the metaverse, some believe it’ll be a big part of our virtual future.
One such person is Carlota Rodriguez-Benito, Head of Innovation at Chanel Iberia and author of the books "Beauty As It Is" and "LUXE 4Z: Shaping a Landscape for Luxury in 2040".
Carlota joined this episode of Disruption Talks to discuss the future of luxury goods and how brands can explore the metaverse. Carlota explains what her role is like on a day-to-day basis, her projections for the future of luxury, and how this all ties into the metaverse, AI, NFTs, and virtual assistants.
Filip Sobiecki: Could you give us a short personal introduction?
Carlota Rodriguez-Benito: I was born in the US, but my parents are originally from Spain, which is where I live now. My dad’s job meant I moved around a lot, and this helped me meet a lot of people, experience a lot of cultures which really shaped who I am today.
Not long ago, I wrote my first book called Beauty As It Is, which is about the perception of beauty around the world. This brought me into the beauty sector at Chanel. In 2020, we were experiencing a lot of different changes in the industry, and we started working on a project in augmented reality. This was such a transformational project but, for several reasons, it got put on hold. About a year ago, we decided to build an innovation hub in Chanel Iberia, so I moved into the role of Head of Innovation.
What does a day in the life look like for you as the Head of Innovation?
Every day is different, but I think that’s part of being in an innovation team.
We have three pillars we focus on. The first is synergy and collaboration, so innovations on the future of work and how teams can work differently together. The second is efficiency and optimization. We work on processes to make them more efficient and optimize our resources to be more sustainable. The third one is the client experience. This is a big part of our team and is split into two different areas – fragrance and beauty and the boutique side.
Day to day, we work together on projects, proof of concepts, and solve problems that might impact the business and our clients.
What will be the biggest challenge and priority for your team in 2022?
The biggest aim for next year is making innovation culture part of the wider business. Right now, it’s just my team. We have been pushing our innovation projects, but I really want that to be absorbed into the rest of the business and become a part of everyone’s life at Chanel.
Innovation doesn’t just come from one team. It’s something that comes from everyone.
In your new book’s synopsis, you mention that luxury will go through one of the most pivotal eras of its lifetime in the next two decades. Can you elaborate on this?
When I was writing the book and telling close friends and family about the industry’s future and the metaverse, no one knew what I was talking about. Then Mark Zuckerberg came out with Meta and started explaining more about the metaverse. Now everyone’s talking about it.
With Web3, the metaverse, changes in blockchain, we’re seeing a neo-renaissance. On top of that, we’re also seeing big pillars of change like the need for sustainability, the development of Internet of Things, Internet of People, and Internet of Places.
The metaverse and Web3 will change how we live in different ways. Everyone’s used to having avatars on Snapchat and so on already, and this will extend as the metaverse develops. What’s interesting is the concept of ownership in the virtual world and how the luxury industry will come into it.
There’s also personalization and the AI technology that will make personalization almost flawless in the future. Some futurists like Jason Silva, Ray Kurzweil, and other big futurists call this the singularity moment.
The singularity moment is the moment in the black hole where gravity laws don't really apply anymore. In this case, the singularity moment is a parallel of what will happen to us when no rules apply. AI will be a big catalyzer for us to have more personalization in the metaverse, especially through virtual assistants that help us make better decisions on how and what we buy.
How do you anticipate the metaverse having an impact on the luxury sector?
There's so much space for the luxury industry in the metaverse and in Web3.
The luxury industry sets the trends, so the metaverse will be a place where luxury companies can interact differently with their customers and offer a new experience.
If we all have avatars, we’re going to have to dress them, and that’s a big opportunity for fashion and luxury brands. Say you buy a Chanel tweed jacket in real life. We could one day buy its digital twin so that you have that same jacket in both the digital and physical spaces.
Luxury brands will be able to respond to the different needs of consumers in the digital space and explore dressing in various ways. For example, I may not be able to purchase an expensive, high fashion dress, but maybe my avatar can wear one.
There will be a need for more people to work in creating clothing for the metaverse. Luxury coders and 3D modelers can work on replicating the texture of clothing and figuring out what that sounds when you walk by. Maybe the laws of gravity won’t apply to clothing as they do in real life. Clothes may not weigh anything in the virtual world. There are all these different possibilities that we can explore in the metaverse.
How could this affect buying behavior?
A study published not long ago by Dress X showed that 9% of people buy new clothes to take a picture just for social media. Imagine if those clothes were instead digital clothes. Instead of buying a physical designer bag, you could purchase one for your digital wardrobe for your avatar to wear online.
Soon we’re going to see direct-to-avatar purchases which is where brands will be able to sell directly to your avatar.
We already have that in the world of gaming.
Three billion people in the world are into some form of gaming, and we already see with the likes of Fortnite, that people buy different skins and products for their avatars. We’re now seeing luxury companies like Gucci working on the metaverse so that people will be able to buy luxury goods for their avatars.
Could the rise of digital clothing purchases reduce counterfeit products?
If you have digital clothing like an NFT or something encrypted into the blockchain, you could actually track its owners, where it came from, and who created it. This could reduce counterfeit products because there’s a more robust system of proving ownership.
We are now seeing things like the MetaBirkins, which were created by digital designer Mason Rothschild. These were 100 versions of the famed Hermes Birkin Bag designed as NFTs to raise awareness of fur-free luxury goods.
There was also a creator who made a Chanel boutique in the metaverse that you can walk into and experience, but it wasn’t created by Chanel. This raises the question of are these things counterfeit? Luxury brands will have to see where this goes and decide.
Do you think mass adoption of the metaverse will make certain physical products go the way of the physical CD one day?
The newness of things is becoming frowned upon because of CO2 emissions and sustainability issues with mass manufacturing. Buying more new things in the metaverse and having a conscious mindset of having second-hand things in the physical world could become a reality. In a way, the metaverse could help to improve sustainability.
Do you think AI and digital expansion will contribute to further growth in fashion?
Right now, many of us have passive virtual assistants like Alexa and Siri. We ask them about the weather or the best coffee shops near to us.
Imagine a world where Alexa can do more than that and adapt to your behavior as it learns more. Maybe one day, we could have a virtual assistant that tells you there are sneakers in your closet you haven’t worn in six months and suggest you donate or sell them. It might tell you the best places to recycle them or where to buy ones that might be more suitable.
We could even have branded virtual assistants.
Say you want to live the Chanel lifestyle; you could ask the virtual assistant what type of restaurant or hotel would a typical Chanel client go to?
There will be a moment when virtual assistants have enough deciding mechanisms that we’ll be able to control how much they can and can’t control or say. You might tell yourself you’re sustainable and you only use shipping that produces the least amount of CO2, but your virtual assistant knows you sometimes use same-day delivery. Little things like this will be recorded and help virtual assistants become more personalized.
For brands, this could be a game-changer. Imagine a company knowing so much about their clients they can personalize the items they wear, for example, writing their name somewhere, offering personalized shoes or sweaters to make them more unique. This is perfect for luxury brands because the luxury industry is based on desirability, uniqueness, rarity, and exclusivity.
AI will push the fashion industry forward as a whole, including beauty, watches, and fine jewelry.
What is your decision-making framework?
I use two methods. One is having an ecosystem which is about getting people from different fields in innovation together to share thoughts and ideas. This helps us make the big decisions as a team.
The second thing is to always have a sponsor. Whenever I need to make a big decision, I make sure I either have my right-hand person on the team, the team itself, or a CEO who believes in the idea and can give advice. There’s so much uncertainty in innovation so when someone sponsors an idea and has more experience to offer, they can help you push decisions forward.
If you had a magic wand and could give every 12-year-old in the world a new skill or piece of knowledge, what would it be?
It would be to unlearn the fear of failing, the fear of asking questions or asking for help. In school, we’re often taught that there’s a right answer and a wrong answer, a good grade and a bad grade. It can make people afraid to fail or try something new in case they get it wrong.
Losing that fear to ask what might feel like a dumb question is really important. Losing the fear of asking for help means you can progress and learn more. Steve Jobs had a really good point on this. He said something like, “there's only one difference between dreamers and doers. Dreamers have a dream and just keep doing it with their own resources. Doers have a dream and ask for help to make it happen.”
This discussion is part of our Disruption Talks recordings, where we invite experts to share their insights on winning innovation strategies, the next generation of disruptors, and scaling digital products. To get unlimited access to this interview and more insights from industry experts, sign up here.