Non-fungible tokens, or NFTs, have become one of the most talked about markets in the crypto space this year. A recent report by Cointelegraph Research found that NFT sales are targeting a record $ 17.7 billion by the end of 2021.
This may very well be the case, as a number of traditional brands have started rolling out NFTs. According to recent research from Bain & Company and the online luxury fashion platform Farfetch, digital interactions with consumers are becoming increasingly important for brands. The report specifically states that “digital interaction with colleagues is on the rise when choosing to purchase a product.” Therefore, non-fungible tokens linked directly to brands and their consumers are now more important than ever.
Understanding what utility means for fashion NFTs
While it is noteworthy that mainstream labels like Adidas, Dolce & Gabbana and others have already released NFT, the utility behind non-fungible tokens is proving to be the real key to a fashion brand’s success. Karinna Grant, co-CEO of The Dematerialised, a digital fashion marketplace, told Cointelegraph that utilities are what give non-fungible tokens purpose and value:
“Just like in real life, where a physical card can scan access to a club, a utility can be anything from using the NFT as a membership card to the ability to wear an asset into a game, or incorporate a ‘sustainability or social activities. benefit of responsibility for NFT buyers “.
Grant noted that The Dematerialized has experimented with multiple forms of utility with each of the NFT fashion drops launched by the platform. He explained that previous versions included utilities such as wearing or playing with an augmented reality 3D asset or unlocking access to the brand’s communities. “With Rebecca Minkoff’s NFT collection sold out in September, NFT’s top tier unlocked VIP access to the brand’s experiences for one year.” He added: “Karl Lagerfeld’s” x Endless “collection has provided an opportunity for owners of Karl collectibles, a and the URL ticket to a brand event in Paris in 2022, which will feature another launch at which only the Karl owners will be invited to participate ”.
It has become clear that fashion NFTs must offer some kind of consumer engagement, allowing brands to interact with individuals in both the physical and digital worlds. Avery Akkineni, president of VaynerNFT – an NFT consulting firm – told Cointelegraph that while the usefulness of some NFTs may be simply for the sake of art, brands that launch NFTs require deeper functionality built on an existing community.
For example, Akkineni shared that VaynerNFT recently helped global fashion house, Coach, launch its first NFT collection, which In the foreground eight animals Coach Holiday from the Snow City digital game of brands. Akkineni added that the launch of NFT was also on the occasion of Coach’s 80th birthday, which resulted in the creation of 80 unique digital art pieces featuring Coach’s eight holiday animals.
Akkineni explained that every NFT digital Coach also grants the right for initial holders to receive a free to order physical rogue bag in 2022. “Something Coach wanted to do was explore this new world of NFT, but he wanted in a way he wouldn’t market. their intellectual property or would ask consumers to pay for anything, “he said. To interact efficiently with the Coach community, Akkineni said the NFT Coaches were distributed for free from December 17 to 24 this year:
“Coach’s NFTs were claimable on the Polygon blockchain. Coach made sure they didn’t market too early and knew the space to measure demand to see if their audience was interested in NFTs.
Fashion NFTs must also work in the Metaverse
The fact that brands now have to interact with consumers both virtually and in real life has also added an extra layer of technical utility to NFTs. As Bain & Company’s latest luxury goods report states, “new keywords and phrases – such as metaverse, large-scale personalization and technology stack – will come to the fore as the industry grows and evolves.”
Therefore, some companies have started exploring NFTs in the Metaverse. For example, Pet Krewe, a pet apparel e-commerce company, recently opened a digital retail space in the Metaverse community known as “ShibaVerse.” Allison Albert, founder and CEO of Pet Krewe, told Cointelegraph that the company is promoting its brand by showcasing its NFT pet clothes in a Metaverse containing balloon dogs called “Shibaloons.”
According to Albert, Pet Krewe’s NFTs will be worn as one-of-a-kind designs that fit the Shibaloons. While Albert pointed out that these costumes can be kept and traded on different Shibaloon dogs within ShibaVerse, Pet Krewe is using this digital commercial space as another form of engagement or brand marketing. “We can connect with dog-loving customers in a dog-centric Metaverse. This is reaching our customer base in a completely different marketing element. “
Eighteen-year-old fashion brand Mishka has also entered the NFT space with its famous eyeball logo. The collection of 6,696 NFTs is known as “The Keep Watch Crew” or “KWC” for short. Greg Mishka, founder of Mishka NFT and Keep Watch Crew, told Cointelegraph that Keep Watch is Mishka’s most iconic and well-known branding element, both for fans and the streetwear and fashion community.
Given the label’s strong user base, Mishka explained that KWC’s NFTs are the brand’s next chapter. “The KWC is your ticket to what we like to call the MISHKAVERSE. Immediate utilities include lifetime discounts and exclusive merchandise, “he explained. Mishka added that the label is working to integrate Web3 elements into their website.” This would allow consumers to verify the NFTs they own to access exclusive pages. and drop via the website “.
Should fashion NFTs still be tied to physical objects?
While the usefulness of fashion NFTs goes beyond simply offering digital items linked to physical goods, some in the industry believe this is still one of the most important functions. For example, Grant noted that linking physical elements to digital NFTs is a key part of the process of adopting non-fungible tokens of all categories. Has elaborated:
“We have a very interesting split perspective with our current community, with half asking for more physical material and half asking for more digital only. However, when we investigate outside our current community, the figure is much higher. This makes sense. as first-time or new NFT owners still tend to hold more traditional beliefs that physical products are more “valuable” than digital ones. ”
Echoing Grant, Mishka commented that it is important to have physical items that can be claimed or obtained by purchasing something in the Metaverse as most consumers still live in the “real world”.
This is why it should come as no surprise that a mainstream fashion brand like Coach has gifted NFT holders with made-to-order rogue bags. Interestingly, Akkineni said NFT holders sometimes don’t redeem their physical items, which has proven to be the case with other drops associated with consumer-facing brands. “VaynerNFT did a collaboration called” Anwar Carrots x Veefriends “, which was a collection sold to Nordstrom and made available to all” Self-Aware Hare “NFT owners. It was only after a few reminders that the owners claimed the physical items, “he commented.
Fashion NFTs will be a trend
The rise in NFTs in 2021 demonstrated forward growth for the major brands. While companies like Nike have already taken steps to enter the Metaverse, other labels will follow suit. This has become the case as the world moves towards digital business models, which have also been promoted by the rise of COVID-19. For example, Albert explained that Pet Krewe is still not sure how COVID-19 will evolve in 2022, noting that current supply chains are still broken:
“We need to protect our bets on alternative revenue streams. Entering a metaverse that aligns with our corporate values means we can add additional revenue streams through artistic NFTs and digital wearables.
Grant further noted that The Dematerialized is keen on “behavior-changing launches,” which include using NFT to disrupt physical production methods. However, it’s important to point out that brands will face challenges along the way.
According to Grant, fashion houses will face three major hurdles, the first of which will be a mindset shift when it comes to the value of the Web3 and digital ownership. Second, Grant explained that it is important to understand the purpose and narrative of an NFT launch: “We support launches that are part of long-term strategic commitments to the Web3, not a marketing gimmick to briefly increase revenue.” .
Finally, Grant pointed out that it will be difficult for major brands to ensure a 3D asset design pipeline in-house. However Grant remains optimistic that these challenges will be solved: “mainstream adoption will come when more big fashion brands, influencers and creators are involved.”