PARIS — Kering believes that cryptocurrencies are here to stay, and recently invested in a $1.5 billion fund aimed at supporting the growth of Web3, the next iteration of the internet.
The French luxury group was one of the investors behind Katie Haun’s crypto fund Haun Ventures, launched in March, chief client and digital officer Gregory Boutté revealed on Friday in a presentation at the Kering Imagination Lab, the company’s hub for digital innovation in Paris.
And it recently made the leap into digital currencies by giving customers the possibility of paying in cryptocurrencies at Gucci stores, initially in key U.S. flagships. Balenciaga is set to follow suit “imminently” and will also accept cryptocurrency payments on its e-commerce site through specialized payment service BitPay. Boutté dismissed recent volatility as par for the course.
“We’re convinced that cryptocurrencies are here to stay,” he said. “They’re hugely appreciated. A lot of wealth has been created around these currencies. Some of our customers who hold these currencies would like to be able to use them to buy our products, so in order to offer our clients the best possible experience, it makes sense to offer this option.”
He noted that Kering has a “test and learn” approach and would be closely watching developments at Gucci, which launched the option two weeks ago, as well as Balenciaga, before deciding whether to extend the payment system to other brands.
“That’s one of the beauties of having our own platform: it allows us to decide the developments we want to pursue,” he said. Kering last year completed the process of internalizing its e-commerce operations, which account for 15 percent of overall revenues, by integrating Balenciaga and Bottega Veneta.
Through its Kering Ventures fund, the group makes minority investments in start-ups or technologies aimed at serving the luxury customer of the future.
Haun is a former partner at Silicon Valley venture capital firm Andreessen Horowitz, and Kering executives, including chairman and chief executive officer François-Henri Pinault, also met with Marc Andreessen, one of the industry’s most respected entrepreneurs, on a recent trip to California to explore the potential of the metaverse for its business.
Separately, Kering partnered last year in a fund launched by investment firm Cathay Capital that invests in early-stage Chinese companies with high-growth potential in the consumer goods and retail sectors.
“On China and the topic of Web3 and cryptocurrencies, we feel that we have to learn, so we want to work with people that know these areas better than us, to be able to exchange with them on topics of common interest, and for them to help us formalize how these technologies or regions can adapt to that,” Boutté said.
The Kering Imagination Lab, which opened a year ago and is home to 200 employees, will host a hackathon on July 20 and 21 where employees will be encouraged to submit their ideas for how Web3 can drive the luxury business. A jury headed by Pinault will designate a winner, whose idea might be implemented by one of the group’s labels.
Boutté detailed how innovation and data were being used at every stage of Kering’s activities, from 3D product design, which is now used to develop between 30 and 40 percent of carryover styles, to machine-learning algorithms that help Gucci’s planners place inventory in stores with up to 20 percent more accuracy than before.
“Digital is not just about e-commerce. It can be relevant to every dimension in our value chain,” he said. “I think we’re very much ahead of the curve on this, and we have a very open approach to innovation.”
Kering is also bringing its “test and learn” approach to the metaverse, with Gucci selling a digital version of its Dionysus bag on Roblox, and Balenciaga teaming up with Epic Games’ Fortnite.
“There are 2.5 billion people playing video games every month, who are in this metaverse, who use these platforms and spend a lot of time in these virtual worlds. We believe these virtual worlds will be increasingly immersive and present in our lives,” Boutté said. “We think that Web3 and NFTs in particular represent a real disruption and we want to be at the heart of this disruption.”
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