From today to the Metaverse
The forces shaping NFTs are driving the art, collecting and luxury sectors into the future.
Each new era stirs up both trepidation and enthusiasm. Some of us are on the verge of experiencing a new "Roaring Twenties," albeit reinvented, and others a new Renaissance. Some of us are approaching it with excitement and others with great apprehension and fear. But what is becoming increasingly clear is that technology is now an intrinsic part of our lives, and we are witnessing the blurring of the boundaries between the virtual and physical worlds.
The past decade has seen more technological progress than ever before. And the world of art and luxury will not be left behind. As technologies advance, the processes of consumption are being transformed, and the art and luxury sectors are undergoing transformations never before seen. Art, jewelry, collectibles and other unique, digitally-connected luxury products will bring exposure, transparency, traceability and circularity to these products, properties and creations.
Generation Z already accounts for one third of consumers. They were born into a world of social networks and ubiquitous smartphones. They are an informed generation that seeks authentic relationships above all else. They mobilize for good causes, they believe deeply in direct relationships without intermediaries and, at the same time, they are also analytical and pragmatic when it comes to purchasing decisions. They have arrived on the scene along with a new way of living: the digital life in which experiences are more important than possessions, and what matters most is where you are, what you are doing and how you are experiencing it.
The new terms NFT, DLT, Web3, Metaverse, Artificial Intelligence and Augmented Reality only hint at what will happen in the art, collecting and luxury sectors in a short time. It is challenging to think that these unique objects that we now collect, display and show off can be used to interact in another world of augmented reality that brings us some more layers, while we enjoy this new gamified experience. In this sense, connected works provide answers to transparency and circularity; they empower clients and encourage freedom, fantasy and exclusivity, creating a direct link between artists, designers, brands and their consumers.
We must consider new technologies as a formidable vehicle that will transform us into better people, bring us progress in all fields, including the sensory field, so that we can enjoy experiences that had eluded our grasp until now. However, we should not view it as a threat or as ushering in a false perception of reality. Seen from an old-fashioned point of view, digitization may seem frightening, but it can also bring us more knowledge and a better experience.
Fulfilling this destiny requires mastering these technologies and maximizing their benefits. How? Definitely with unique pieces connected to their digital twins (NFTs). Why? Because the traditional possession and enjoyment of unique physical pieces will not disappear. On the contrary, their value will increase and go much further with the help of technology that will bring new layers to the experience of creation, purchasing, enjoyment and possession, ensuring a powerful channel of communication, an increased level of trust, and a digital identity that guarantees authenticity in a way that is transparent, secure and immutable. And best of all, it also guarantees that each piece is unique, that it is what it is and is made in a specific way, and this increases its value. It can also give us access to its use in and out of the Metaverse, providing a new experiential layer with exclusive access to unique experiences in both the physical and digital worlds that intertwine with each other to form a new reality.
At this point, you may ask, how this will happen. What does this digitization entail? What do these NFTs or Digital Twins bring to the table? Where are we heading? I will attempt to answer these questions briefly below:
NFTs bring more value to the pieces and generate new streams of revenue by revolutionizing workflows and production flows, empowering self-expression and the narrative of the brand itself and/or the artist, facilitating co-creation with users and/or clients.
NFTs promote the circular economy and provide the means for more informed decisions, more trust, secure access to secondary markets and a higher conversion rate.
NFTs ultimately help artists, creators, brands and the industry forge closer relationships with the user/client and a new business model where secondary market profits are retained for creators and brands, in contrast to how things have worked up to now.
We are heading toward digital life inside and outside the Crypto universe... communities of people united around common interests represented by their tokens. Although the essence of these communities lies with their origins in decentralization, the manner in which we exchange, publish and access content has still not evolved. Up to now, all communication is based on centralized platforms that are disconnected from the cryptographic world. We use Twitter, Wechat, Signal, Discord, Telegram, etc., but the time is coming to experiment with a new way of communicating as well, one that protects community members from hackers, does not collect personal data from users and provides features made explicitly for token holders. As there is a larger critical mass of users, we are heading toward the development of strong, interlinked communities that will eventually introduce native web3 solutions to regain control of the infrastructures that they also use to communicate, and those technologies and companies that have fraudulently monetized our personal data by means of wrongful use will be displaced from the market.
Unique and connected works of art, collectibles, antiques or jewelry may seem far removed from our current reality, but they are not; some of us are already exploring these paths. We are building a future where the creator/brand/consumer relationship throughout the blockchain will be based on transparency, trust, security and culture, and not on the use and misuse of captive marketing techniques, and the only thing we know for sure is that tomorrow, you will wish you had started today.
Zuger Partners AG offers strategic consulting services with expertise in the art and luxury sector focused on successfully going digital, providing the keys to implementing the right digital strategy with NFTs and providing coordination, access and relationships with leading technology companies and specialized platforms in the market through its subsidiary The Embassy of Art. Zuger Partners also offers boutique financial services in raising capital, restructuring and strategic consulting. Zuger Partners is the promoter of the Luxembourg-based investment fund, Kryptos, and the Anglo-Swiss technology venture capital company, Quantum Ventures.
The Embassy of Art's services are aimed at renowned artists and small and medium-sized enterprises with high-quality products and brands that can use our services as a Strategy and Innovation Department.
If you wish, we would be honored to accompany you on this journey into the future.
We can help you find the right answers to the main questions you should ask yourself before implementing a digital strategy with NFTs:
What is the objective?
Why do we need NFTs for this specific purpose?
How will we manage the relationship with our client today?
Which community are we targeting?
What purpose will our NFTs serve?
What volume do we have? To which part of our products do we have the desire and ability to give this new functionality?
What marketing and client relationship actions are we developing now, and which ones are likely to be digitized or hybridized?
Can we back up our claims of sustainability, authenticity and exclusivity?
What is the overall picture in our sector? What are others doing?
What platforms are already in existence, and in which direction is this market evolving?
What does this imply for my production process?
Should I implement the strategy with a white label platform or a single platform?
What will it cost? How will I benefit?
Disclaimer
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This newsletter is provided for educational and discussion purposes only and does not constitute an offer. Opinions and projections contained in this publication are provided as of the date of publication, may be inaccurate, and are subject to change without notice. Prospective investors should not treat these materials as legal, tax or investment advice. No recommendations are made with regard to investing in Zuger Partners AG or any other investments.