According to a recent report from Cointelegraph Research, non-fungible tokens also known as NFTs are aiming for $17.7 billion in sales by the end of 2021. This only proves that NFTs played a huge role in the crypto space in the previous year.
Given the growing trend in NFTs, a large number of mainstream brands have started launching NFTs. Bain & Company as well as Farfetch, an online luxury fashion platform, stated that digital interactions with customers are becoming significantly important to brands. With this, NFTs that are tied directly to brands and their customers are now more essential than ever.
Utility for Fashion NFTs
The utility behind NFTs is said to be the key to the success of fashion brands in the crypto space. According to Karinna Grant, co-chief executive officer of The Dematerialised, a digital fashion marketplace, utilities provide purpose and value to NFTs.
Similar to the real world where customers can use a physical card to do certain actions such as access a club, utilities can also be used in multiple ways. It can serve as a membership pass, it can provide an ability to wear an asset in a game or it can be used to incorporate a sustainability or responsibility benefit for the purchasers of the NFT.
According to Grant, “Karl Lagerfeld’s “x Endless” collection provided an opportunity for owners of Karl collectibles, an IRL and URL ticket to a brand event in Paris in 2022, which will feature another launch where only Karl holders will be invited to take part.”
Avery Akkineni, president of VaynerNFT, an NFT consultancy agency, on the other hand, shared how he helped Coach, a global fashion house, as it launched its first-ever NFT collection. It featured eight Coach Holiday animals from the brands’ Snow City digital game. Each digital Coach NFT grants the initial holder one complimentary made-to-order physical rogue bag in 2022.
These examples above only prove that fashion NFTs must be able to provide some sort of consumer engagement that will allow brands to interact with their customers both in real life and in the digital world.
Fashion NFTs in the Metaverse
Some names have now started to explore NFTs in the metaverse. Pet Krewe, a pet apparel e-commerce company, for instance, recently opened its first digital commercial space called “ShibaVerse.” According to the brand’s founder and chief executive officer Allison Albert, Pet Krewe has now started promoting its brand by featuring its NFT pet clothing in a Metaverse containing balloon dogs called “Shibaloons.” Pet Krewe’s NFTs can be worn as unique designs that will fit the Shibaloons. Albert stated that these NFTs will also serve as next-level marketing or brand engagement as it connects the brand with dog-loving customers in an entirely different manner.
Fashion label Mishka has also entered the world of NFTs with its collection of 6,696 NFTs known as “The Keep Watch Crew” or simply “KWC” featuring its iconic eyeball logo. Greg Mishka, founder of Mishka NFT and the Keep Watch Crew explained that KWC will be their customers’ ticket to MISHKAVERSE where lifetime discounts and exclusive merchandise await.
Fashion NFTs and the Physical World
According to Grant, connecting physical items to digital NFTs is still a critical part of the adoption process for nonfungible tokens as most first-time NFT owners tend to believe that physical products are more valuable compared to digital ones.
On the contrary, Akkineni mentioned that sometimes NFT holders don’t redeem their physical items. She added “VaynerNFT did a collaboration called “Anwar Carrots x Veefriends,” which was a collection sold at Nordstrom and made available to all “Self-Aware Hare” NFT holders. It was only after some reminders that the holders did claim the physical items.”
The Future of Fashion NFTs
Grant stated that The Dematerialised is excited for “behavior-changing launches,” however, it is important to note that brands will still encounter challenges along the way. Grant specifically identified three main obstacles: First being a shift in thinking when it comes to the value of Web3 and digital ownership. Second, she explained that understanding the purpose and narrative of an NFT launch is important. She added: “We support launches that are part of long-term strategic commitments to Web3, not a marketing gimmick to briefly drive revenue.” Lastly, she pointed out that major brands might experience challenges as they ensure a 3D asset design pipeline in-house.
Despite these challenges, Grand is looking forward to a brighter future for fashion NFTs: “Mainstream adoption will come as more major fashion brands, influencers and creators get involved.”