The Role of Gaming in the Luxury Industry

Augmented reality, virtual reality, in-game experiences, virtual influencers... the new playground for luxury houses.

New generations are driving the emergence of new habits, new consumer environments, and the development of new technologies. This is the challenge for luxury houses: finding the right balance between the past, the present, and the future. Between current clients and owners, and the customers of tomorrow.

On the occasion of Louis Vuitton's 200th anniversary on August 4, 2021, it is worth understanding how brands are adapting their communication strategies to these changes.

📈 Challenges for luxury houses

"Generations are now defined by technology, not by age." This is what Louis Vuitton CEO Michael Burke says regarding the metaverse era.

But how can a brand adapt its digital strategy to reach new environments while preserving what luxury houses call Brand Equity, characterized by:

Brand reputation
Desirability
Perceived quality
Attractiveness
The major challenge for this industry is to carry out communication initiatives that help strengthen this brand equity—which is essential for their longevity. Just like the in-store experience, all digital experiences offered by the brand must be consistent and relevant to its values.

In this article, we will discuss augmented reality, virtual reality, and in-game experiences to highlight the boldness, the gamble, and the risk-taking of certain players—to our great delight.

We will specifically address the case of digital advertising, which has evolved and innovated tremendously in recent years and now makes it possible to meet these delicate challenges unique to this industry.

👾 AR & VR applied to Fashion & Luxury

Augmented reality

Faced with government restrictions, augmented reality experiences proved to be an alternative solution to physical in-store experiences. They have multiplied to engage fans with brand products and give them the opportunity to consume and purchase online.

In March 2021, Adidas virtualized the fitting room, allowing users—via a Snapchat Lens—to try on the new Adidas Originals ZX 2K Boost Pure directly on their feet. The quality of the experience is impressive!
In April 2021, the British fashion house Burberry introduced its new Pocket Bag collection via augmented reality. The experience is available directly on their website.

Burberry augmented reality experience
Also in April 2021, watchmaker IWC Schaffhausen leveraged this technology by launching an app that allows users to virtually try on a watch using their mobile camera.

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Virtual reality

Augmented reality isn't the only technology to benefit from the Covid era. Beyond store closures, many fashion shows were unable to host live audiences. Since people couldn't travel, several major brands successfully brought these events into everyone's living room through virtual reality experiences.

Balenciaga, always a pioneer in its communication, showed its bold side once again. 330 VIPs received a personal, scented letter accompanied by a virtual reality headset to discover their Fall 2021 collection.
Dior had already made headlines in 2015 with the launch of Dior Eyes, which allowed fans to immerse themselves backstage at a fashion show to observe the models and makeup artists.

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Virtual influencers

As influencer marketing continues to grow, virtual influencers have started to emerge. If you haven't heard of Lil Miquela yet, her Instagram account is worth a look. And wait for it... as of August 2021, the young fictional influencer has 3 million followers.

This is enough to attract many brands looking to associate themselves with a strong, committed personality beyond a physical presence.

🎮 Taking the leap into gaming?

With the pandemic, the gaming industry has completely exploded. Valued at $160 billion, this market is larger than the film and music industries combined.

How can a brand venture into this new universe while protecting its reputation and brand equity? It is a risky bet that more and more major luxury players are willing to take.

Let's start with Louis Vuitton, which, for its 200th anniversary, released its mobile video game, Louis: The Game, available on iOS and Android. By taking control of Vivienne, the brand's mascot, players can unlock stories about the development of Louis Vuitton through various quests.

But Louis Vuitton is no novice in this field, as the brand had already developed a retro-style game in 2019: Endless Runner. It is still available on their website!
The brand also engaged with this market by signing a partnership with League of Legends in 2019, where a "skin"—a virtual outfit—was created for one of the strategy game's "champions." Furthermore, for the LoL World Championship finals in Paris, the trophy was transported in a Louis Vuitton trunk to the center of the AccorHotels Arena stage.

Animal Crossing: heard of it?

This game—which is similar to The Sims—allows you to play as a character in a virtual world that you can fully customize. Fashion houses got in on the game and uploaded their latest designs. This created a huge buzz on the platform and across social media. Among them are Jacquemus, Marc Jacobs, Dior, Chanel, and Valentino... quite the list. 🙂
For your information, the latest version of Animal Crossing, "New Horizons," outsold FIFA 21 in 2020. That should give you an idea of the phenomenon.
At the end of 2020, Balenciaga presented its Fall 2021 collection in the form of a game where the user is immersed in a futuristic world set in 2031. With a simple QR code, players can join the adventure from any computer or smartphone.

Afterworld: The Age of Tomorrow

In December 2020, Gucci announced a collaboration with The North Face and a partnership with Pokémon GO, allowing players to try on and purchase products at 100 "PokéStops" linked to pop-up stores for the collection.
It is worth asking what game luxury brands are really playing:

Betting on developing a new economy by marketing their branded products. One might imagine they want to get ahead of the proliferation of counterfeits by using Non-Fungible Tokens (NFTs)—digital certificates of ownership linked to blockchain technology. We all know this is one of their major challenges in the real world.
Reaching audiences through new technologies to build their brand image.

🎯 The role of digital advertising

As we have seen, the luxury industry is currently facing two challenges:

Adapting to new habits to continue maximizing reach among target audiences. Gaming, and entertainment in general, are now an integral part of our lives. Brands must innovate and venture into new environments.
Protecting their reputation and preserving brand equity. Luxury houses must remain consistent across all the physical and virtual experiences they offer.
This is why the industry is so sensitive and demanding regarding the environments where it advertises. The issue of brand safety is therefore crucial.

Here is a list of the criteria we can control in digital advertising today:

The delivery context.

It is possible to target a pre-selected list of media or exclude numerous sites to protect the brand. We can also target specific article contexts using semantic tools, or exclude them (such as anxiety-inducing topics like COVID).

Exposure frequency.

Billing for viewable impressions only.
Choosing the most impactful and rich formats for the advertiser.
Digital advertising has evolved significantly in recent years to offer new, innovative experiences for advertisers that align with the new habits of younger generations.

In-Game Advertising.

Some ad networks have specialized in delivering advertisements directly within video games by building partnerships with publishers. It is entirely possible to target specific types of games.

AR & VR Advertising.

Console advertising. Platforms like Xbox and PlayStation offer ad placements on their homepages and stores, while providing advertisers with data segments relevant to their brand.

Twitch.

Since opening up to programmatic advertising in 2021, Twitch has become a compelling channel for advertisers looking to reach younger audiences, specifically within the gaming and broader entertainment sectors.

YouTube.

Despite various brand safety challenges, advertisers can maintain control over their ad environment by using targeting methods such as specific channels or URLs. Lifestyle and gaming communities are highly active on the platform.
Finally, media or semantic targeting allows you to control your ad delivery down to the specific publisher. We have access to numerous entertainment media outlets to offer you.

Brand safety is a critical issue for every brand, but it is especially vital for the luxury industry. That is why it is important to define your Brand Safe Profile—clearly identifying which sites, apps, or contexts align with your identity, and conversely, which ones must be excluded from your ad placements.

Klox is here to listen and would love to learn more about your needs to help you implement your digital marketing strategy.

We already support several brands, including Dior, in defining a modern communication strategy tailored to new consumer habits, both in France and internationally.

We would be delighted to assist you as well if you have needs within the broader gaming landscape.