Fashion Briefing: Against all odds, web3 loyalty programs are flourishing

June 30, 2023 Mary

This week, we take a deep dive into the recent growth of web3 fashion loyalty programs from Lacoste, LVMH and Dior, and the reason brands are separating them from their existing loyalty programs. Scroll down to use Glossy+ Comments, giving the Glossy+ community the opportunity to join discussions around industry topics.

Fashion brands have increasingly launched loyalty programs to increase the engagement and lifetime value of customers. As a result, consumers now have a wide variety of choices when it comes to brands offering benefits, leading to many of them dropping out of loyalty programs that don’t offer personal value.

To counter this, brands are increasingly introducing innovative loyalty programs, which they’re offering exclusively to emerging web3 communities. Within the last month, digital product-based loyalty programs that have come to market include Lacoste’s UNDW3 NFT card, Dior’s B33 sneakers and Louis Vuitton’s Via Trunks.

With web3 communities known for their brand loyalty, offering perks and continuous opportunities to collect points is a worthy investment for brands. Although there has been a significant NFT market cooldown, some initiatives are thriving, especially with brands like Lacoste and Adidas that have been honing their community over the last couple of years. For its part, Adidas has 31,200 Discord members and 50,000 Twitter followers. And both brands have sold out NFT collections.

Adidas has tracked its web3 audience’s engagement via an app called “Confirmed,” announced May 2. This was created in partnership with the authentication platform Tokenproof. App users are able to see and trade the latest drop from Adidas’s web3 project, “Into the Metaverse.” So far, those have included a pair of Superstar sneakers and a hoodie made in collaboration with NFT project partners Bored Ape Yacht Club, Gmoney and Punks Comic. The app will also be tied into member-exclusive launches and NFTs in the future.

For Lacoste, the focus of its web3 loyalty program, launched on June 29, is continuous engagement. Through an UNDW3 (pronounced “underwater”) NFT card users connect their digital wallets to a dedicated, token-gated brand website. Through the site, users can enter locked Discord channels, co-create products, attend events and provide feedback to the brand and its creative studio. Co-creation and community engagement have become the foundation of good web3 brand projects.

“It’s the basis of the reward system that we want to build,” said a Lacoste spokesperson. “In the future, the objective is to build new features that will be plugged into this reward system.”

Lacoste has built up a large web3 community over the last year. In June 2022, it launched 11,212 UNDW3 NFT Genesis passes, which have now been converted to the new UNDW3 cards with the new offerings. The floor price of a Genesis pass was 0.05 ETH, currently around $96. The collection sold out, and dedicated UNDW3 NFT cards have not yet been released. On Discord, Lacoste currently has 50,000 members. Engaged users voluntarily help onboard new members and moderate the channels.

In June, Lacoste launched a Twitter account for Lacoste UNDW3 to grow its web3 community. Its main Lacoste Twitter account has 1 million followers, and the new account has 1,500 so far. According to the brand, the idea is to migrate some of the Discord engagement to Twitter, as it is a more widely used platform.

On the UNDW3 site, users can also take part in quests, through which they can level up their NFT card based on their engagement and wins. “We will have some creative contests — but even saying good morning every day or discussing subjects with the community on Discord will earn you points,” said the spokesperson. “If you do the online quiz or play the alternate reality game, you get points.”

Points allow users to climb a leaderboard. Those placing in the top 10 annually will receive unique prizes from the brand, like trips to Paris, visits to the Lacoste factory and VIP shopping experiences. This gamification and reward system is common among web3 loyalty programs, which are known for rewarding engaged customers with a more immersive brand experience than traditional loyalty programs.

In addition, Lacoste is keen on users exchanging and selling their NFTs along with their accrued points. That’s unlike Louis Vuitton, which has made its Via Trunks non-transferrable. “It’s all about the customers getting back that engagement ownership,” said the Lacoste spokesperson.

A key element of the UNDW3 program and NFTs is that they offer Lacoste the opportunity to collect data on its customers, in order to inform the development of future valuable experiences and rewards.

Lacoste is aiming to be an exception, considering the typically low adoption of the gaming elements in these types of programs. It is doing this by offering unique opportunities as rewards. “Web3 loyalty and reward programs are in their infancy, with low user adoption rates, due to friction around end consumer usability and the lack of composability typical of traditional web2 programs,” said Megan Kaspar, managing director of web3 investment at investment firm Magnetic. “The software integration is also not yet seamless or composable.”

In the future, Lacoste plans to connect elements of its web3 and web2 loyalty programs. The main Lacoste loyalty program, “Le Club Lacoste” has millions of members, though the spokesperson declined to provide a more specific number. Perks of the four-tier program include birthday gifts, welcome gifts and private sales.

Lacoste previously experimented with gaming through a Lacoste x Minecraft collaboration in March 2022. For next year, the plan is to launch gaming projects that rely less heavily on web3 elements, yet still bring traditional users into digital worlds through gaming.

“Recruitment of new customers will come from gaming and digital fashion, [both of] which we want to accelerate and explore while making them very easy to understand and use,” said the brand spokesperson. “Digital identity and digital fashion have been becoming more important in the last few years, and we as a brand are looking to increasingly explore them both.”