The fashion industry has always been at the forefront of innovation and setting new trends. As we enter a new era in which our virtual identities are becoming more prevalent, NFTs open up the fashion world to new digital channels. In the past year we’ve seen some of the biggest luxury fashion brands in the world pave the way for integrating NFT technology with real-world experiences. In fact, a whopping 17% of brands featured in the Vogue Business Index have already experimented with NFTs.

In 2022 Metaverse Fashion Week kicked off in Decentraland with brands like Tommy Hilfiger and Eli Saab leading the way. Fashion devotees could attend highly gated and exclusive fashion shows that would not otherwise be accessible to them in the physical world. It’s no surprise then that NFTs and the metaverse have proved to be a successful avenue of marketing for world-renowned fashion brands.

So, how can fashion businesses take advantage of this new technology, and what benefits can NFTs bring to this exciting industry?

NFTs as a Creative Marketing Channel for Fashion Brands

NFTs serve as a creative channel for fashion brands to use in their marketing strategies. They can be used to build excitement for a product launch and give customers access to special perks such as VIP events, physical merchandise, entry into a gamified experience, virtual fashion shows, or exclusive NFT drops. The list of possibilities is endless really.

However, many companies tend to approach NFTs without any original idea or direction in mind, but rather as a way to make a quick buck through the hype. For some, this may work short-term, but in the long run it is not going to bring much value to a business or its customers. Before implementing NFTs into a business strategy, it’s important to establish a long-term vision of how exactly they are going to be beneficial to the brand and business.

One of the best use cases for NFTs in fashion is community building. NFTs are the perfect tool for building an engaged online community around a brand. In the 2022 Future of Commerce report by Shopify, 40% of brands revealed that they are searching for new ways to interact with customers and vice versa.

NFTs allow for digital assets to be traced and ownership verified, creating a secondary market for creators and consumers to sell their items, which is uncommon in the luxury and fashion industry. Through proof of ownership and authenticity of any transaction, NFTs add a new layer of interaction with collectibles and luxury purchases.

NFTs present fashion brands with an opportunity to provide financial incentive for customers to come back and also invite others to join. For example, brands can offer NFT collectibles which give holders lifetime access to discounts, early access to new products, merchandise drops, or a special platform for NFT holders to talk with each other. These types of personalized experiences encourage an emotional bond and customer loyalty, as well as rewarding buyers for their support.

Flowers of Society, who specialize in sneakers, used NFTs as a way of building up excitement and hype for their product launch. Everyone who bought an NFT from the collection gained exclusive access to the Flowers of Society metaverse community, future collaborations, and limited-edition sneakers releases.

Another way which NFTs can serve as a revenue stream, in addition to physical offerings, is through creating digital experiences in an online gaming world. Although to older generations it may not be appealing, Gen Z’s are certainly naturals when it comes to interacting with the digital world. Fashion brands can collaborate with gaming platforms where customers can complete short games to acquire new shoes, clothing and other accessories for their avatars.

Marketing Success for Fashion Brands Using NFTs

Traditional fashion brands are typically known for slow digital adoption, understandably so as fashion has always been rooted in physical goods. However, due to the pandemic, the fashion industry went in a direction nobody saw coming.

In the past one year we saw the top luxury fashion brands experimenting with NFTs, and enormous amounts of money being spent on digital handbags like the baby Birkin NFT handbag that sold for $23, 500, and RTFKT virtual sneakers representing the physical ones, which generated more than $3 million USD in sales with a limited-edition drop. Other cutting-edge fashion houses like Gucci, Balenciaga, Dolce & Gabbana, and Balmain, also used NFTs in their advertising campaigns to launch new clothing collections.

This has led to the rise of ‘phygital’ items – a combination of physical and digital. Companies such as Xydrobe provide luxury brands a place to be able to move into digital creations in a way that doesn’t compromise their core values of craft, quality and exclusivity. Last year they launched a digital cardigan which was handcrafted by visual effects artists to represent the exact same real garment worn by Harry Styles that now hangs in the Victoria and Albert Museum.

Burberry and Louis Vuitton went even further than just adding a digital counterpart to the physical one. Both Blankos Block Party and Burberry, and Beeple creations and Louis Vuitton, dropped NFTs connected to video games as part of their collaborations. Burberry produced around $375,000 in sales with its Sharky B drop which featured wearable NFTs such as armbands and pool shoes for Blankos characters.

Nike also experimented with NFTs and gaming by partnering up with Roblox to debut Nikeland. Users of Nikeland can choose from a series of pre-built games or customize their own, and incorporate real-life movements into the game and dress their avatars with unique clothing and accessories.

Other brands like Rebecca Minkoff used NFTs to develop brand engagement with a younger audience and raise funds for charities close to the company’s ethos such as The Female Founder Collective. For Minkoff, her brand has always been at the intersection of fashion and technology, and she saw NFTs as the perfect opportunity to experiment with phygital creations and as a way for customers to dress themselves and their avatars and have more immersive online experiences.

All in all, NFTs are not about replacing physical garments, but rather to support fashion houses to tap into a new commodity market and interact with consumers in contemporary and exciting ways. The future of NFTs is unpredictable, we’ve seen massive hype in the past one year, but whether NFTs will become an industry of their own or a supporter, only time will tell.

Leave a Reply

Your email address will not be published. Required fields are marked *