Why Gucci Will Accept Cryptocurrencies – A Preview Of The Future?
Gucci clients will soon be able to pay for the luxury fashion they buy in cryptocurrencies like Bitcoin BTC, Ethereum ETH, Ethereum Cash ETC, Dogecoin DOGE, shiba inu, wrapped bitcoin, life Coin, and other digital currencies in select U.S. stores.
Starting at the end of May, Gucci will accept cryptocurrencies in five stores – in the Miami Design District, Rodeo Drive in Los Angeles, Wooster Street New York, Atlanta’s Phipps Plaza, and The Shops at Crystals in Las Vegas. The move comes as the luxury brand tries to attract young shoppers to its stores and create a camaraderie among early adaptors of the crypto technology.
“Gucci is always looking to embrace new technologies when they can provide an enhanced experience for our customers,” said Gucci president and CEO Marco Bizzarri in Vogue Business. He continued, “Now that we are able to integrate cryptocurrencies within our payment system, it is a natural evolution for those customers who would like to have this option available to them.”
Other luxury retailers are also testing crypto payments. Off White announced that its flagship stores in Paris, London, and Milan have begun accepting payments in crypto coins. There are no payment limits, and it will only offer refunds as store credit. In contrast, Gucci plans to offer returns for cryptocurrency purchases in cryptocurrency.
There are, of course, additional retailers that now will accept cryptocurrency in the United States. These include Whole Foods, Starbucks SBUX, Home Depot, Microsoft MSFT, Shopify, and PayPal PYPL. They are not luxury brands like Gucci, but all want to align with younger customers (and anyone else embracing these new currencies). One can expect more companies to adapt and accept the new coins. Designer Philip Plein declared himself “the crypto king” last summer after becoming the first brand that accepted digital tokens as payments. He is expanding his London store and says he has at least one bitcoin transaction a day. A report says that he now has 150 bitcoins equal to about $5.8 million.
Gucci has developed a Web-3 focused team; further, it has purchased and is developing digital real estate on The Sandbox SAND2, a blockchain based real estate platform. Adidas and Al Dente, among others, are also developing land there. In a related move, Gucci was the first luxury brand to release an NFT; its one-of-a-kind film sold for $25,000.
POSTSCRIPT: Cryptocurrencies have been very volatile in price. One has to wonder whether that volatility for the merchandise being sold by public companies will adversely affect these companies.
Gucci is owned by Kering, and it could affect reported sales and earnings, directly impacting the owners of Kering adversely. I point out that Bitcoins traded during the pandemic in the mid-$60,000 range, but last night it closed at $36,277. I see unhappy customers when this occurs, and I also wonder how stores make a profit when there could be wide swings of retail prices.
A young friend who has some cryptocurrency assured me that the coins are easy to trade in any country and, therefore, he likes the new currency. Just as retailers have had to adapt to touchless payments that became popular during the pandemic, they will have to find a way to manage any new payment forms like this that gain traction among their target customers.
By Walter Loeb