The significant appreciation of Bitcoin has prompted luxury fashion brands and retailers to explore cryptocurrency payment options, seeking to tap into new wealth segments and cultivate loyalty among cryptocurrency investors.
Previously, only a limited number of luxury brands, including LVMH's Hublot and Tag Heuer, and Kering's Gucci and Balenciaga, had adopted this strategy.
Recently, the prestigious French department store Printemps announced a partnership with Binance, the largest cryptocurrency exchange globally, and French fintech firm Lyzi to accept cryptocurrencies, including Bitcoin and Ethereum, in its French locations. This makes Printemps the first European department store to embrace such a payment method. As Bitcoin's value continues to rise, this initiative has piqued the interest of other brands and retailers.
David Princay, president of Binance France, noted, "There have been quite a few calls - it's generated interest," indicating that discussions are underway with additional luxury brands.
S.T. Dupont, a luxury manufacturer of lighters and pens, informed Reuters of its plans to accept cryptocurrency payments in two of its Paris locations before the holiday season.
In the experiential sector, Virgin Voyages has begun offering a $120,000 annual pass for unlimited sailing on its cruise ships, marking its first product that accepts Bitcoin as a payment option.
Despite long-standing warnings from regulators about the high-risk nature of cryptocurrencies like Bitcoin and their limited real-world applications, the volatility of these assets has hindered their widespread acceptance as a payment method.
However, endorsements from U.S. President-elect Donald Trump, who is anticipated to introduce more favorable regulations for e-currencies, have contributed to Bitcoin's record-breaking surges. Analysts from S&P suggest that the narrative surrounding cryptocurrencies is evolving, highlighting that blockchain innovations in financial markets could enhance their predictability.
SEEKING INNOVATIVE BRANDING
Luxury brands have historically aimed to attract wealthy consumers from the technology sector by establishing retail locations in high-end Silicon Valley shopping centers and launching products such as the Hermes HRMS.PA Apple Watch, which merges the iconic stitched leather straps of the renowned Birkin bag maker with Apple’s AAPL.O smart watch.
Currently, the surge in wealth from recent bitcoin peaks—exceeding $107,000 on Monday—coincides with a significant downturn in the luxury market, prompting a search for new avenues of growth.
According to Andrew O'Neill, digital assets lead analyst at S&P Global Ratings, accepting cryptocurrency payments can help brands position themselves as forward-thinking rather than as "a stuffy old brand that's only selling to the boomers."
However, this payment method is primarily symbolic. Retailers typically convert the cryptocurrency back into euros or dollars to mitigate volatility risks, and for many consumers, payment solutions are already considered "something that's been solved" through platforms like PayPal PYPL.O or Venmo, O'Neill noted.
For bitcoin investors who have experienced substantial gains, luxury items such as designer handbags or premium watches present a clear opportunity for portfolio diversification, analysts suggest.
Reflecting the increasing interest from luxury brands, Balenciaga has recently launched a leather card holder designed to accommodate "Stax" hardware from the crypto wallet company Ledger. This black leather accessory, priced at 350 euros ($368), features a keychain and an Eiffel Tower charm, along with an NFC chip embedded beneath the brand logo. Ledger's Stax Crypto hardware, its latest high-end device with a curved touchscreen, retails for $399 at Best Buy BBY.N, while the "Flex" model, resembling a mini Amazon Kindle, is available for $249, and the "Nano" version, which looks like a USB key, is priced at $79.
ENGAGING YOUNGER AUDIENCES
Gregory Boutte, the chief client and digital officer at luxury conglomerate Kering, has articulated the group's approach to technology as one of "test and learn," rather than a passive "wait and see" strategy. He highlighted the importance of adopting new technologies to effectively connect with younger and Asian consumers.
Since 2022, Kering's flagship brand, Gucci, has enabled purchases using 10 different cryptocurrencies for a majority of its products in the United States.
Printemps is actively working to extend its cryptocurrency payment options to New York City, where it plans to launch a multibrand retail outlet in the Wall Street area in March.
The substantial increase in Bitcoin's value during late 2021 prompted considerable interest from luxury brands. Consequently, companies such as Tag Heuer (then under the leadership of LVMH heir Frederic Arnault) and Gucci began accepting cryptocurrency payments for specific purchases in the United States the following year.
A prominent example of cryptocurrency adoption within the luxury goods sector is Eunice Wong, an investor and influencer known as "Eunico," who has recently used digital currencies for luxury acquisitions.
Wong reported acquiring several luxury timepieces, including an Audemars Piguet Royal Oak, using cryptocurrency. She indicated a preference for secondary market purchases, citing inefficiencies in traditional retail engagement with high-end brands.