Ferrari said it will extend its scheme to accept crypto payments for its luxury sports cars to its European dealer network from the end of this month. It follows an initial launch in the US last year.
By the end of 2024, the Italian automaker plans to expand this scheme further. This will include other dealerships in its international network, in countries where crypto is legally allowed.
The Maranello, Italy-based manufacturer explained that the decision is a response to growing demand from Ferrari’s wealthy customers. These customers are showing increasing interest in using digital currencies for their high-end purchases, the company said.
Several crypto industry executives suggested that the strategy primarily serves as a branding move for Ferrari.
Wealthy Seek Frictionless Payments
Tom Dunleavy, CFA, a partner at MV Global, stated that crypto payments are becoming increasingly common. He believes the trend kickstarts from luxury items and will eventually spread to more affordable goods, following the typical path of new technologies.
Dunleavy shared that when he bought a car in the US a few months ago, he wished he could have used USDC for the transaction. Instead, he had to transfer the funds to his bank account, get a certified check from the bank, and then bring it to the dealership.
“Removing frictions are what the wealthy desire and crypto solves that in many cases,” he said.
Using Crypto to Attract Image-Conscious Consumers
Consumers often select products that mirror their identity, values, and goals — a concept central to advertising theory.
According to Vijay Pravin Maharajan, CEO at bitsCrunch, Ferrari can leverage crypto adoption to connect with a demographic of wealthy, technologically adept individuals who embrace cutting-edge financial solutions.
“This move will likely resonate with consumers who see themselves as pioneers in adopting new trends and technologies, enhancing their personal identity through association with a prestigious brand like Ferrari,” he said.
Maharajan said that high-level executives might be hesitant to adopt crypto payments until its profitability is undeniably clear. However, if Ferrari’s venture proves successful, a trend of other luxury car manufacturers could follow suit in the near future.
Demographics Shift
Adam Koprucki, founder of RealWorldInvestor.com, noted that traditional Wall Street professionals like bankers and lawyers are no longer the primary buyers of cars like Ferraris.
The rise of cryptocurrency has minted a new generation of young millionaires who prioritize convenience and may be more receptive to Ferrari’s embrace of crypto payments, he said.
“So if they can pay with crypto it makes the transaction extremely seamless,” he said.
Koprucki suggested that the typical Cadillac buyer might not be heavily invested in cryptocurrency. However, for ultra-luxury vehicles like Ferraris, the target demographic becomes crucial in determining whether crypto adoption would be beneficial.
Luxury Brands Expected to Embrace Crypto to Woo Younger Customers
Erik LaPaglia, Propy’s chief strategy officer, believes that prestigious global brands should capitalize on the potential of digital currencies by incorporating them into their business operations.
“Not only will it raise its stature with a younger and more diverse customer base than it currently might engender otherwise, it also allows for optionality down the road,” he said.
LaPaglia suggests that accepting crypto is just the beginning for Ferrari and other luxury brands, and a logical next step in their business development.
“They need to meet their customers where they are. And as those brands look to target a younger audience, I would only imagine that a good percentage of their potential customer base has asked about paying in digital currency,” he said.
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