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 Aim for a record $ 17.7 billion until the end of 2021.
This may very well be the case as a number of mainstream brands have started bringing NFTs to market. To According to recent research by Bain & Company and online luxury fashion platform Farfetch, digital consumer interaction is becoming increasingly important for brands. The report explicitly states that “the digital interaction with colleagues when purchasing a product increases”. Therefore, non-fungible tokens that are directly linked to brands and their consumers are more important than ever.
Understand what utility means for fashionable NFTs
While it’s noteworthy that mainstream labels like Adidas, Dolce & Gabbana, and others have already released NFTs, the utility behind non-fungible tokens turns out to be that real key to a fashion brand’s success. Karinna Grant, co-CEO of The Dematerialized, a digital fashion marketplace, told Cointelegraph that utility companies give meaning and value to the non-fungible tokens:
“Just like in real life, where a physical card scans access to a club, a utility can be anything from using the NFT as a membership card to being able to carry an asset in a game, or a sustainability or social item to integrate. Advantage of responsibility for buyers of the NFT. “
Grant noted that The Dematerialized experimented with multiple forms of utility with each of the fashionable NFT drops the platform launched. She explained that previous versions included utilities like carrying or playing a 3D asset in augmented reality or unlocking access to branded communities. “With Rebecca Minkoff’s NFT collection sold out in September, the top tier of NFTs unlocked VIP access to branded experiences for a year.” URL ticket to a brand event in Paris in 2022, which will offer a further introduction to which only Karl owners will be invited. “
It has become clear that fashion NFTs need to provide some type of consumer loyalty that enables brands to interact with individuals in both the physical and digital worlds. Avery Akkineni, president of VaynerNFT – an NFT consulting agency – told Cointelegraph that while the utility of some NFTs can be simply for the sake of art, Brands bringing NFTs to market require deeper functionality build on an existing community.
For example, Akkineni said that VaynerNFT recently helped global fashion house Coach launch its first NFT collection, the presented eight Coach Holiday animals from the brand’s Snow City digital game. Akkineni added that NFT’s launch was also on the occasion of Coach’s 80th birthday, resulting in the creation of 80 unique digital artworks featuring the eight Coach holiday animals.
“Bella the Penguin” from the Coach NFT collection. Source: VaynerNFT
Akkineni stated that each digital coach NFT also gives first-time owners the right to receive a free, made-to-order physical rogue bag in 2022, a method that doesn’t commercialize their intellectual property or ask consumers to pay for anything, “said she. In order to efficiently contact the coach community, Akkineni mentioned that the Coach NFTs were being given away for free from December 17th to 24th this year:
“The coach NFTs were claimable on the polygon blockchain. Coach was careful not to commercialize too early and to research the space to gauge demand to see if the audience was interested in NFTs. ”
Fashion NFTs must also work in the metaverse
The fact that brands now need to interact with consumers both virtually and in real life has also given NFTs an additional technical benefit. As the newest luxury items from Bain & Company report notes that “new keywords and phrases – like metaverse, large-scale personalization, and tech stack – come to the fore as the industry grows and evolves.”
As a result, some companies have started researching NFTs in the Metaverse. For example, Pet Krewe – an e-commerce pet apparel company – recently opened a digital trading room in the Metaverse community called ShibaVerse. Allison Albert, founder and CEO of Pet Krewe, told Cointelegraph that the company is promoting its brand by showcasing its NFT pet apparel in a metaverse of balloon dogs called “Shibaloons”.
Source: Pet Krewe
According to Albert, the Pet Krewe NFTs are worn as unique designs that match the Shibaloons. While Albert pointed out that these costumes can be kept and exchanged on different Shibaloon dogs within ShibaVerse, Pet Krewe is using this digital commercial space as another form of branding or marketing. “We can get in touch with dog-loving customers in a dog-centered metaverse. With this we reach our customer base in a completely different marketing element. “
The 18-year-old fashion label Mishka has also entered the NFT room 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 the Keep Watch Crew, told Cointelegraph that Keep Watch is the most iconic and recognizable brand element of Mishka, for fans as well as the streetwear and fashion community.
Andy Milonakis KWC NFT. Source: Mischka
Given the label’s strong user base, Mishka stated that the KWC NFTs are the next chapter for the brand. “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 was working on incorporating Web3 elements into their website. “This would allow consumers to check their NFTs to access exclusive pages and drops through the website.”
Should fashionable NFTs still be tied to physical items?
While the utility of fashion NFTs goes beyond simply displaying digital items in conjunction with physical goods, some in the industry believe that this is still one of its most important functions. For example, Grant noted that connecting physical items to digital NFTs is a critical part of the process of adopting non-fungible tokens of all categories. She stated:
“We have a very interesting shared perspective with our current community, with one half asking for more physical data and the other half only asking for digital data. However, when we conduct surveys outside of our current community, the number is much higher. This makes sense because first-time owners or new NFT owners still tend to have the more traditional belief 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 accessed by purchasing something in the Metaverse, since most consumers still live in the “real world”.
Because of this, it should come as no surprise that a mainstream fashion label like Coach gave NFT owners with physical, made-to-order rogue bags. Interestingly, however, Akkineni mentioned that NFT owners sometimes fail to redeem their physical items, which has been proven with other drops related to consumer-facing brands. “VaynerNFT did a collaboration called Anwar Carrots x Veefriends, a collection that was sold at Nordstrom and made available to all NFT owners by Self-Aware Hare. Only after a few memories did the owners claim the physical items, ”she commented.
Fashion NFTs will be a trend
The surge in NFTs in 2021 has shown that big brands are growing steadily. While companies like Nike have already taken Steps to Enter the Metaverse, more labels will follow. It is as the world is moving towards digital business models, which was also fueled by the rise of COVID-19. For example, Albert stated that Pet Krewe is still unsure how COVID-19 will play out in 2022, noting that current supply chains are still disrupted:
“We have to hedge our bets on alternative sources of income. By entering a metaverse that corresponds to our own corporate values, we can tap additional sources of income through art NFTs and digital wearables. “
Grant went on to note that The Dematerialized is enthusiastic about “behavior changes,” which include the use of NFTs to disrupt physical methods of production. However, it’s important to point out that brands will face challenges along the way.
According to Grant, fashion labels will face three main obstacles, the first being a rethinking of the value of Web3 and digital ownership. Second, Grant stated 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 Web3, not a marketing gimmick to increase sales in the short term.”
Finally, Grant pointed out that securing an in-house 3D asset design pipeline will be a challenge for big brands. Grant remains optimistic, however, that these challenges will be solved: “Mainstream acceptance will come when more big fashion brands, influencers and creatives get involved.”
