Countless individuals assume the luxury fashion industry differs from other business sectors today. However, the principles remain the same. They must fully comprehend the competitive marketplace today to remain successful. NFTs serves as a good example of how these industries collide.
The average person might not see how blockchain technology would be of benefit to the fashion world, but it is. In fact, companies today may wish to establish an NFT gallery to share with consumers. Before doing so, however, the company must understand what an NFT is and how it is of benefit to the fashion world.
What is an NFT?
NFT stands for non-fungible token, a form of cryptographic asset created using blockchain technology. These tokens allow people to exchange items of value through a channel unable to be replicated.
NFTs have been in use since 2012 but didn’t become popular until 2017. This is when Crypto Kitties hit the scene. People obtained these digital assets and could breed or trade them. At one time, the kitties traded for up to $140,000.
NFT in Fashion
The fashion world recognizes it must jump on the tech train, something it didn’t do when e-commerce first took off. It has since realized its mistake, and changes are being made. Gucci introduced a one-of-a-kind sneaker in 2021 as an NFT, and luxury watch brands are offering auctions using NFTs. Dapper Labs, digital couture house, and Johanna Jaskowska came together in 2019 and offered a digital dress that sold for $9,500. That same year, Louis Vuitton used blockchain-based tokens to guarantee the authenticity of an item.
What This Means for the Future
Microsoft and Consensys came together to establish the Aura platform. This platform serves as a blockchain system that consumers can use to follow the origins and life cycle of items they buy. The Fashion Institute looked into the importance of tracking purchases in the eyes of consumers and found that this is crucial today, as consumers have become more interested in a customer-centric world. Fashion icons find they can protect their intellectual property and its technology using NFTs. This technology allows them to legitimize their products by legally backing them. They equate a digital asset with the owner’s home, vehicle, and other tangible items.
Luxury brands find using non-tangible tokens provides them with a new way to connect with men and women who have a high net worth. The tokens allow them to tell their story while sharing insight into the brand’s values. Consumers today don’t want to make a purchase. They wish to establish a connection with the company they are giving their money to, and the brand’s story plays a role in this.
For example, younger generations prefer to purchase sustainable items. They worry about their impact on the planet and take this into consideration when spending money. With the help of NFTs, luxury brands find they can create a priceless experience that cannot be replicated and one that is good for the planet. When a company achieves this goal, it increases its brand awareness, engages with the target audience, and improves sales.
The Benefits of NFTs
While an NFT serves as an excellent way to connect with consumers and create loyalty among shoppers, fashion brands must ensure they know how to use the tokens to achieve these goals. A failure to provide a luxury experience turns consumers off. For example, Decentraland, a virtual game, hasn’t achieved success because it doesn’t promote luxury. Fashion companies recognize this and continue to improve the experience.
EverestCoin, a play-to-earn gamefi platform, is working to improve NFT fashion. It is currently building a game on Metaverse, one that will tie into the DeFi ideology. This ideology guides the luxury fashion world and the crypto world today.
The NFT Marketplace in Fashion
While companies such as EverestCoin have become adept at navigating the NFT world, the same isn’t true for many luxury brands. Smaller brands seem to have more success in this area. Fashion boutique brands send out NFT pitches routinely, with many of these brands offering twin products, one physical and one digital. When a person wins an auction for one of these items, they receive a one-of-a-kind item and its digital equivalent.
The fashion world serves as the perfect home for NFTs. People view these tokens as art rather than utility. Michael Osei-Wusu, also known as Indigo Suave, studied film and visual arts at Princeton. Today, he is blending art with technology, and the fashion world needs to follow his example. When a brand does so, consumers will take notice.