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Fashion brands are launching NFTs by 2022

Nonfungible tokens (or NFTs) have been a hot topic in the crypto world this year. A recent report from Cointelegraph Research found that NFT sales are aiming for a $17.7 billion record by the end of 2021.

This may be true, since many mainstream brands have started launching NFTs. According to recent research from Bain & Company and the online luxury fashion platform Farfetch, digital interactions with consumers are becoming increasingly important for brands.

Understanding what utility means for fashion NFTs

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Understanding what utility means for fashion NFTs

While it’s notable that mainstream labels like Adidas, Dolce & Gabbana and others have already released NFTs, the utility behind nonfungible tokens is proving to be the real key to a fashion brand’s success. Karinna Grant, co-chief executive officer of The Dematerialised, a digital fashion marketplace, told Cointelegraph that utilities are what give nonfungible tokens purpose and value:

“Just as in real-life, where a physical card can scan you access into a club, a utility can be anything from using the NFT as a membership pass to the ability to wear an asset in a game, or incorporating a sustainability or social responsibility benefit for purchasers of the NFT.”

Grant noted that The Dematerialised has experimented with multiple forms of utility with each of the fashion NFT drips the platform has launched. She said that utility features have been included in previous releases, such as the ability to wear or play with 3D assets in augmented reality or accessing brand communities. Rebecca Minkoff’s September sold-out NFT collection gave the highest tier of NFTs VIP access to brand experiences for one year. She added: “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.”

It’s become clear that fashion NFTs must offer some type of consumer engagement, allowing brands to interact with individuals in both the physical and the digital worlds. Avery Akkineni is the president of VaynerNFT, an NFT consultancy agency. He told Cointelegraph that, while some NFTs are useful for art’s sake, brands launching NFTs need deeper functionality based on an existing community.

For example, Akkineni shared that VaynerNFT recently helped the global fashion house, Coach, launch its first NFT collection, which featured eight Coach Holiday animals from the brands’ Snow City digital game. Akkineni added that the NFT launch was also in celebration of Coach’s 80th birthday, which resulted in the creation of 80 unique digital art pieces featuring the eight Coach holiday animals.

“Bella the Penguin” from the Coach NFT collection. Source: VaynerNFT

Akkineni explained that each digital Coach NFT also grants the right for the initial holders to receive one complimentary made-to-order physical rogue bag in 2022. She stated that Coach wanted to explore the new world of NFTs but not commercialize their IP nor ask for money from consumers. To efficiently engage with the Coach community, Akkineni mentioned that the Coach NFTs were given away for free during Dec. 17-24 this year:

“The Coach NFTs were claimable on the Polygon blockchain. Coach made sure not to commercialize too early and to learn about the space to gauge demand to see if their audience was interested in NFTs.”

Fashion NFTs must also function in the Metaverse

The fact that brands must now interact with consumers both virtually and in real-life has also added an extra layer of technical utility to NFTs. As Bain & Company’s latest luxury goods report states, “new keywords and phrases — such as metaverse, personalization at scale, and tech stack — will come to the fore as the industry grows and evolves.”

As such, some companies have started to explore NFTs in the Metaverse. For example, Pet Krewe — a pet apparel e-commerce company — recently opened a digital commercial space in the Metaverse community known as “ShibaVerse.” Allison Albert, founder and chief executive officer of Pet Krewe, told Cointelegraph that the company is promoting its brand by featuring its NFT pet clothing in a Metaverse containing balloon dogs called “Shibaloons.”

Source: Pet Krewe

According to Albert, Pet Krewe’s NFTs will be worn as unique designs that fit the Shibaloons. Albert said that the costumes can be worn on Shibaloon Shibaloon dogs, but Pet Krewe will use this space to engage customers and market its brand. “We can reach dog-loving customers through a dog-centric Metaverse. This is reaching our customer base in an entirely different marketing element.”

The 18-year-old fashion label Mishka has also entered the NFT space 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 Keep Watch Crew told Cointelegraph that Keep Watch was the most well-known and iconic branding element of Mishka for fans as well as the streetwear and fashion communities.

Andy Milonakis KWC NFT. Source: Mishka

Given the label’s strong user base, Mishka explained that the KWC NFTs are the next chapter for the brand. “The KWC allows you to enter what we call the MISHKAVERSE. He explained that immediate utilities include lifetime discounts as well as exclusive merchandise. Mishka said that the label is currently working to integrate Web3 elements into their website. “This would allow for consumers to verify the NFTs they own in order to access exclusive pages and drops via the website.”

Should fashion NFTs still be tied to physical items?

While the utility of fashion NFTs goes beyond offering digital goods connected to physical items, some industry professionals believe this is still one the most important functions. Grant pointed out that the process of converting physical items into digital NFTs is crucial for all non-fungible tokens. She elaborated:

“We have a very interesting split perspective with our current community, with half asking for more physicals and half asking more digital-only. The figure is higher when you look beyond our current community. This makes sense as first-time or new NFT owners tend to still hold more traditional beliefs that physical products are more “valuable” than digital ones.”

Echoing Grant, Mishka commented that it’s important to have physical items that can be claimed or achieved by acquiring something in the Metaverse since most consumers still live in the “real world.”

This is why it shouldn’t come as a surprise that a mainstream fashion label like Coach gifted NFT holders with physical made-to-order rogue bags. Akkineni noted that NFT holders sometimes don’t redeem their items. This has been proven to be true for other consumer-facing brands. “VaynerNFT collaborated on “Anwar Carrots and Veefriends”, which was sold at Nordstrom and made accessible to all Self-Aware Hare NFT holders. She said that it was only after some reminders to the holders that they had claimed the physical items.

Fashion NFTs will be a trend

The rise of NFTs in 2021 has demonstrated growth moving forward for major brands. While companies like Nike have already taken steps to enter the Metaverse, more labels will follow suit. This has become the case as the world moves toward digital business models, which have also been promoted by the rise of COVID-19. For instance, Albert explained that Pet Krewe is still unsure of how COVID-19 is going to play out in 2022, noting that current supply chains are still being disrupted:

“We need to hedge our bets on alternative revenue streams. Entering into a metaverse that aligns with our own company values means that we can add additional revenue streams through art NFTs and digital wearables.”

Grant further remarked that The Dematerialised is excited for “behavior-changing launches,” which include using NFTs to disrupt physical production methods. It’s important to note that brands will encounter challenges along the journey.

According to Grant, there will be three major obstacles for fashion labels. The first is a shift in thinking about the value of Web3 or digital ownership. Grant explained that it is crucial to understand the purpose and story of an NFT launch: “We support launches that form part of long-term strategic commitments to Web3, rather than a marketing gimmick that temporarily drives revenue. “

Grant also pointed out that maintaining a 3D asset design process in-house will prove difficult for large brands. Yet Grant remains optimistic that these challenges will be resolved: “Mainstream adoption will come as more major fashion brands, influencers and creators get involved.”

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Henry Hickshttps://nonfungibletalk.com
NFT and Crypto Enthusiast. Loves Travelling and Exploring the Metaverse!
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