From the Internet Dilemma to the Metaverse Dilemma: Exploring Luxury Brands’ Adoption of Metaverse Technologies

Communications of the Association for Information Systems Volume 57 Paper 54 10-25-2025 From the Internet Dilemma to the Metaverse Dilemma: Exploring Luxury Brands’ Adoption of Metaverse Technologies Noha Tarek Amer German University in Cairo (GUC) Shan Rahman Whitireia and WelTec Jeff Baker University of Texas at Dallas Nicholas J. Ashill Victoria University of Wellington Follow this and additional works at: https://aisel.aisnet.org/cais Recommended Citation Tarek Amer, N., Rahman, S., Baker, J., & Ashill, N. J. (2025). From the Internet Dilemma to the Metaverse Dilemma: Exploring Luxury Brands’ Adoption of Metaverse Technologies. Communications of the Association for Information Systems, 57, 1242-1269. https://doi.org/10.17705/1CAIS.05754 This material is brought to you by the AIS Journals at AIS Electronic Library (AISeL). It has been accepted for inclusion in Communications of the Association for Information Systems by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contact . From the Internet Dilemma to the Metaverse Dilemma: Exploring Luxury Brands’ Adoption of Metaverse Technologies Cover Page Footnote This manuscript underwent editorial review. It was received 06/06/2025 and was with the authors for one month for one revision. Ming-Hui Huang served as Associate Editor. This article is available in Communications of the Association for Information Systems: https://aisel.aisnet.org/cais/ vol57/iss1/66 C ommunications of the A Research Article ssociation for I nformation S ystems DOI: 10.17705/1CAIS.05754 ISSN: 1529-3181 From the Internet Dilemma to the Metaverse Dilemma: Exploring Luxury Brands’ Adoption of Metaverse Technologies Shan Rahman Noha Tarek Amer School of Innovation, Design and Technology Whitireia and WelTec New Zealand 0000-0001-5720-5582 Department of Business Informatics German University in Cairo (GUC) Egypt 0000-0002-9447-4789 Jeff Baker Nicholas J. Ashill Information Systems University of Texas at Dallas 0000-0003-2757-9887 School of Marketing and International Business Victoria University of Wellington New Zealand 0000-0002-7868-6175 Abstract: While luxury brands have widely adopted Internet-based digital technologies, their engagement with metaversebased technologies remains underexplored. This study addresses that gap by examining how foundational luxury principles—sensorial richness, exclusivity, brand prestige, artisanal craftsmanship, and heritage—interact with emerging metaverse characteristics such as digital simulation, democratized access, co-creation, digital aesthetics, and narrative-driven engagement. This tension is conceptualized as The Metaverse Dilemma: the strategic challenge luxury brands face in preserving exclusivity while selectively integrating metaverse technologies. To investigate this dilemma, the study poses two key questions: (1) What are the defining characteristics of metaverse technologies as applied by luxury brands? and (2) How do these applications vary across luxury sectors? Using a refined 8Cs framework, the study analyzes how brands navigate the dual imperatives of innovation and exclusivity. A crosssectoral analysis of 60 luxury brands spanning fashion, beauty, jewelry, watches, yachts, and automobiles reveals sector-specific patterns of metaverse technology deployment. Findings highlight the influence of buyer demographics, particularly age, on adoption strategies. Additional factors include product complexity, the balance between technical and symbolic luxury, the sensorial nature of offerings, sustainability commitments, and the brand’s orientation toward social interaction and community building. These insights inform enhancements to the 8Cs framework, extending its relevance to metaverse contexts. The study contributes to academic discourse by offering a conceptual lens for understanding strategic adaptation in luxury branding. Implications are discussed for researchers, technologists, and marketing practitioners seeking to align luxury brand identity with evolving digital environments. Keywords: Luxury Brand, Metaverse, Adoption, 8C Framework, Customer Experience, Virtual Reality, Virtual World, Artificial Intelligence, Cryptocurrency, NFT. This manuscript underwent editorial review. It was received 06/06/2025 and was with the authors for one month for one revision. Ming-Hui Huang served as Associate Editor. Volume 57 Paper 54 pp. 1242 – 1269 October 2025 Communications of the Association for Information Systems 1 1243 Introduction The luxury sector has long been characterized by its cautious approach to digital innovation. Historically, luxury brands hesitated to adopt information technologies in marketing, retail, and customer service, fearing that digital engagement might dilute their aura of exclusivity (Berger, 2012; Bjørn-Andersen & Hansen, 2011). This tension, termed the “Internet Dilemma” (Kapferer & Bastien, 2012), revolved around whether luxury firms should use the Internet merely for communication or also as a sales channel (Hennigs et al., 2012; Seringhaus, 2005). Over time, however, luxury brands have resolved this dilemma by strategically integrating a limited range of digital tools to uphold their exclusive positioning (D’Arpizio et al., 2021; Kim, 2019; Pantano et al., 2022). As technological innovation accelerates, luxury brands now face a pivotal new challenge: the Metaverse Dilemma. While the Internet Dilemma of the early digital age revolved around reconciling accessibility with exclusivity, the current paradigm is far more complex. The metaverse introduces a disruptive bouquet of technologies such as hyper-realistic simulation, decentralized ownership, collaborative co-creation, and gamified immersion, that fundamentally reshape consumer engagement (Dwivedi et al., 2022; Xu & Mehta, 2022). Critically, these features challenge the very pillars of luxury branding. Decentralized virtual environments erode traditional brand control, while participatory dynamics dilute exclusivity. Simultaneously, the shift toward algorithmic storytelling and digital-first experiences risks commoditizing the sensorial richness and crafted authenticity that define luxury (Dwivedi et al., 2022; Xu & Mehta, 2022). Luxury brands must now contend with questions of brand integrity (ensuring consistent prestige across physical and virtual realms), consumer value (designing digital experiences that resonate with luxury shoppers), and regulatory uncertainty (Holmqvist et al., 2020; Shukla et al., 2024). While early adopters like Gucci, Burberry, and Balenciaga have ventured into the metaverse (Marr, 2022), scholarly understanding of how luxury brands strategically and operationally deploy these technologies remains limited (Christodoulides & Wiedmann, 2022; Murtas et al., 2024). This study examines whether, how, and why luxury brands adopt metaverse-based technologies. Drawing on conceptual classifications of metaverse tec (...truncated)