The fashion & apparel industry has been developing new technologies to help it adapt to an increasingly digital world. In recent years, major Luxury brands like Dolce & Gabbana, Gucci, Louis Vuitton, and Burberry have been venturing into the digital space to introduce Non-Fungible Tokens (NFTs) to their product ranges and marketing efforts. According to Vogue Business Index, 21% of the brands had worked with NFTs as of Winter 2021.
Well, we see that NFTs are booming, but what are NFTs exactly and how do they relate to the fashion & apparel industry?
What are NFTs and Fashion NFTs?
Non-Fungible Tokens (NFTs) are unique digital assets where consumers can retain lifetime ownership of traceable and authenticated assets. These tokens can be traded with trust, as all transactions are recorded on a blockchain and transparent. Blockchain technology is a shared & immutable ledger that tracks the continuous movement of NFTs throughout the digital space.
When we talk about the interrelation between fashion & NFTs, they come in various forms such as virtual garments that owners can wear within virtual environments; others may be digital content that owners can interact with or even digital twins of physical creations. NFTs have applications in authentication and virtual fashion.
Authentication: NFTs have the ability to tie themselves with the physical product. With this, the consumers will have both proofs of purchase and proof of authenticity of their product.
Virtual Fashion: NFTs act as a bridge between the physical and virtual worlds. It can be solely virtual by purchasing digital creations and selling them in the virtual stores located in the Metaverse.
Why is Fashion NFTs trending?
Many brands turned to virtual fashion during the pandemic. Fortnite, Roblox, and Animal Crossing have been used as a way to connect with consumers and generate revenue. As we see in the current interest in the metaverse (shared, 3D virtual environments) shows, interest in digital fashion has not wavered in the post-lockdown landscape.
Rather than inducing the trend, the pandemic simply highlighted growing consumer interest in virtual fashion and demand for fun, personalized, and immersive digital experiences – from brand activations within video games to virtual dressing rooms such as YourFit where shoppers can try on clothes virtually and get fit and size recommendations through their smartphone before they buy clothing.
How are fashion & apparel brands capitalizing on the NFT trend?
AR fashion helps consumers wear the apparel they purchase. It is possible by using AR to superimpose digital images over camera footage of the real world. Brands such as DressX and XR Couture are selling virtual garments that consumers can wear using AR technology. Also, retailers like GAP are experimenting with the new try-on technology to boost their revenue. Moreover, brands merge AR with NFTs to create garments that consumers can collect, wear and trade.
Metaverse is the new trend in the market. Brands are offering their NFTs to the customers who wish to wear them in the Metaverse. During the Metaverse, Fashion Week that was hosted on the Decentraland, nearly 70 brands participated in the virtual fashion shows exhibiting their collaboration with famous fashion designers. Moreover, many other brands took this as an opportunity to sell their NFTs to customers who wish to dress their avatars.
Fashion & apparel brands can own NFTs in the form of virtual lands to build their stores and showcase their products. The Sandbox is a virtual world that allows users to buy land in the form of NFT. Also, luxury brand, Gucci is setting up a shop to provide an interactive fashion experience based on Gucci Vault (the brand’s conceptual space).
The Scalefast report portrays that among the consumers who wish to buy NFTs, 25% of them would buy it if the digital asset also comes in the physical form. Additionally, 31% of them wish to buy the NFTs produced by the brands. Surprisingly, many brands are coming up with their NFTs. For instance, Dolce and Gabbana introduced their first luxury NFT collection, Collezione Genesi, which included both physical and virtual works. Another example is that of Overpriced Brand that produced an NFT-linked hoodie that can be scanned to prove authenticity and ownership through the blockchain.
NFTs open up a new era of consumerism, allowing consumers to own assets that can be tracked and authenticated. Additionally, they create a secondary market for creators and consumers, who have previously been excluded from the luxury or fashion industry. Non-fungible tokens can help brands prevent fakes, which is a big issue for them even in 2022. There’s still a lot of experimentation, and the impact will become more evident over time.