Non-fungible tokens, or NFTs, have become one of the most discussed markets in the crypto space this year. A recent report from Cointelegraph Research found that NFT sales were targeting a record $ 17.7 billion by the end of 2021.
This could very well be the case, as a number of mainstream brands have started to launch 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 peers is on the rise when choosing to purchase a product.” As such, non-fungible tokens tied directly to brands and their consumers are now more important than ever.
Understand what utility means for fashion NFTs
While it should be noted that mainstream labels like Adidas, Dolce & Gabbana and others have already released NFTs, the usefulness of non-fungible tokens is proving to be the real key to a fashion brand’s success. Karinna Grant, co-CEO of The Dematerialized, a digital fashion marketplace, told Cointelegraph that utilities are what gives the purpose and value of non-fungible tokens:
“Just like in real life, where a physical card can scan you for club access, a utility can be anything from using the NFT as a membership pass to the ability to carry an asset in. a game, or to incorporate a sustainability or social responsibility benefit for NFT buyers.
Grant noted that The Dematerialized experimented with multiple forms of utility with each of the NFT fashion drops launched by the platform. She explained that previous versions included utilities such as wearing or playing with a 3D asset in augmented reality, or unlocking access to brand communities. “With Rebecca Minkoff’s sold-out NFT collection in September, NFT’s top tier unlocked VIP access to brand experiences for a year. and a URL ticket for a branded event in Paris in 2022, which will feature another launch that only Karl holders will be invited to attend.
It has become clear that fashion NFTs need to offer some type of consumer engagement, enabling brands to interact with people in the physical and digital worlds. Avery Akkineni, president of VaynerNFT – an NFT consultancy firm – told Cointelegraph that while the usefulness of some NFTs may just be for art, brands that launch NFTs require more in-depth functionality based on an existing community.
For example, Akkineni explained that VaynerNFT recently helped global fashion house Coach launch their first NFT collection, which Featured eight Coach Holiday animals from the brand’s digital Snow City game. Akkineni added that the launch of NFT also celebrated Coach’s 80th anniversary, which resulted in the creation of 80 unique digital art pieces featuring the eight Coach holiday animals.
Akkineni explained that each NFT Digital Coach also grants the right to initial holders to receive a free physical rogue bag on order in 2022. in a way that would not market their intellectual property or require consumers to pay for anything ” , she said. To effectively interact with the coaching community, Akkineni mentioned that the NFT Coaches were given away for free from December 17-24 this year:
“The NFT Coaches could be claimed on the Polygon blockchain. Coach made sure not to market too early and researched the space to assess demand to see if his audience was interested in NFTs.
Mode NFTs must also work in the metaverse
The fact that brands must now interact with consumers both virtually and in real life has also added an additional layer of technical utility to NFTs. As the latest luxury goods report from Bain & Company states, “new keywords and phrases – such as metaverse, large-scale personalization, and tech stack – will emerge as the industry grows. and will evolve “.
As such, some companies have started exploring NFTs in the metaverse. For example, Pet Krewe – a pet clothing e-commerce company – recently opened a digital shopping space in the Metaverse community known as “ShibaVerse”. Allison Albert, founder and CEO of Pet Krewe, told Cointelegraph that the company promotes its brand by showcasing its NFT pet clothing in a metaverse containing balloon dogs called “Shibaloons.”
According to Albert, Pet Krewe’s NFTs will be worn as one-off designs tailored to the Shibaloons. While Albert pointed out that these costumes can be held and traded on different Shibaloon dogs within ShibaVerse, Pet Krewe is using this digital shopping space as another form of brand engagement or marketing. “We can connect with dog loving customers in a dog-centric metaverse. This reaches our customers in a completely different marketing element. “
18-year-old fashion label Mishka also entered the NFT space with their famous eyeball logo. The 6,696 NFT collection 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 the most iconic and well-known brand element. by Mishka, both for fans and for the streetwear and fashion community.
Considering the brand’s strong user base, Mishka explained that KWC 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 on integrating Web3 elements into their website. “This would allow consumers to check the NFTs they own in order to access exclusive pages and drops through the website.”
Do fashion TVNs always have to be linked to physical objects?
While the utility of fashion NFTs goes beyond simply providing digital items connected to physical goods, some in the industry believe that it is still one of the most important functions. For example, Grant noted that connecting physical elements to digital NFTs is an essential part of the process of adopting non-fungible tokens of all categories. She elaborated:
“We have a very interesting shared perspective with our current community, with half asking for more physics and the other half asking for more digital only. However, when we do polls outside of our current community, the figure is much higher. This makes sense because new or new owners of NFTs tend to still have more traditional beliefs that physical products are more “valuable” than digital products. ”
Echoing Grant, Mishka commented that it’s important to have physical items that can be claimed or obtained by acquiring something in the Metaverse, as most consumers still live in the “real world”.
That’s why it shouldn’t come as a surprise that a traditional fashion brand like Coach has offered NFT holders physical bespoke rogue bags. Interestingly though, Akkineni mentioned that sometimes NFT holders don’t trade their physical items, which has turned out to be the case with other drops associated with consumer brands. “VaynerNFT did a collaboration called“ Anwar Carrots x Veefriends ”, which was a collection sold at Nordstrom and made available to all NFT“ Self-Aware Hare ”holders. It was only after a few reminders that the holders claimed the physical objects, ”she commented.
Fashion NFTs will be a trend
The rise of NFTs in 2021 demonstrated future growth for major brands. While companies like Nike have already taken steps to enter the metaverse, other labels will follow. This has become the case as the world moves towards digital business models, which have also been helped by the rise of COVID-19. For example, Albert explained that Pet Krewe is still unsure of how COVID-19 will play out in 2022, noting that current supply chains are still disrupted:
“We need to hedge our bets on alternative sources of income. Entering a metaverse that aligns with our own corporate values means we can add additional revenue streams through artistic NFTs and digital wearable devices.
Grant further noted that The Dematerialized is excited about “behavior-changing launches,” which include the use of NFT to disrupt physical production methods. However, it’s important to stress that brands will face challenges along the way.
According to Grant, fashion brands will face three main hurdles, the first being a change in mindset when it comes to the value of Web3 and digital property. Second, Grant explained that it’s important to understand the purpose and story of an NFT launch: “We support launches that are part of long-term strategic commitments to Web3, not a marketing gimmick to generate briefly income. “
Finally, Grant pointed out that it will be difficult for big brands to secure an in-house 3D asset design pipeline. Still, Grant remains optimistic about solving these challenges: “Mainstream adoption will come as more and more big fashion brands, influencers and designers get involved. “