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Powered by blockchain technology, NFTs have enriched many different industries with their innovative technical solutions. The fashion industry in particular has diversified its creative opportunities and benefited immensely by incorporating NFTs into its industry practices.
This article explores ten ways in which NFTs are contributing to the growth and development of the fashion industry.
1. Collectible fashion NFTs
Fashion is a deeply embedded cultural concept that, among other things, enhances the ways in which people express themselves. With the metaverse market reaching $47 billion, more people are spending time in the virtual world, creating a growing appetite for digital clothing collectibles.
Traditional fashion designers are beginning to realize that virtual fashion could eventually become the norm. It therefore isn’t surprising that brands like Gucci are selling digital assets like a bee-embroidered Dionusys handbag for $4,115. Although the bag is not an NFT and has no value or usage outside the Roblox platform, this move by an industry leader shows the intent of luxury fashion brands to invest in and develop the digital goods market.
Since non-fungible tokens provide immutable digital ownership, big brands are minting NFTs and selling them on digital fashion marketplaces. For example, luxury brands like watchmakers Hublot and Jacob & Co. have designed exclusive NFT-based fashion pieces. The Jacob & Co. SF24 Tourbillion timepiece sold for a whopping $100,000, making the wristwatch retailer one of the first fashion brands to successfully launch an NFT watch.
2. Fashion exhibitions in the metaverse
COVID-19 induced lockdowns and travel restrictions have compelled luxury brands to exhibit their products in virtual worlds. Big brands like Christian Dior, Balenciaga, the Prada Foundation, and others have ushered in a digital revolution with their virtual fashion shows.
Auroboros was one of the first companies to launch a digital-only, ready-to-wear couture collection at the London Fashion Week. Standing at the intersection of innovative technology and high-class design, the ‘Biomimicry’ collection was an immersive experience in digital fashion.
In February 2022, Everyrealm hosted the ‘Metaverse Fashion Week’ in the Second Life digital world that attracted over 40,000 attendees. The high-end designer and New York Fashion Week veteran, Jonathan Simkhai, exhibited his digital wearables in this fashion show. One of Simkhai’s NFT designs sold for $3,000, entitling its new owner to physical garments from the Fall / Winter 2022 collection.
In March 2022, Decentraland hosted its first ‘Metaverse Fashion Week’ in collaboration with the NFT marketplace, UNXD. The four-day gala affair hosted a series of virtual events including catwalk shows, panel discussions, digital storefronts, and immersive after-parties. Guests could even buy physical and digital items from brands like Hugo Boss and others.
3. "Phygital" NFTs
Phygitalization—the process by which physical products and services seamlessly integrate with the digital world—is gradually impacting the fashion space. Some of the biggest fashion brands are now developing twin digital stores to offer both digital and physical collections simultaneously.
For example, the luxury brand Bulgari is set to launch an exclusive 10-edition Octo Finissimo Ultra watch with an engraved QR code. Upon scanning the code, owners will have access to digital art NFTs, along with information to verify the watch's authenticity.
Another major brand, RTFKT, sold 600 pairs of real-digital sneakers for $3.1 million in collaboration with digital artist Fewocious. Users can simultaneously wear their physical sneakers in real life and in the metaverse. In December 2021, Nike acquired NFT and blockchain company RTFKT to bolster its digital transformation strategy
4. Digital designs for gaming avatars
Similarly, Louis Vuitton designed its own game called ‘Louis: The Game’ to celebrate 200 years of the brand and pay tribute to its founder. The game developers named the protagonist Vivienne, who runs and jumps around six different worlds to collect postcards, candles, and memorabilia.
Players can customize their character with signature Louis Vuitton virtual clothes like their monogram prints. Additionally, Beeple has designed 30 NFTs that players can only find in the game.
Louis Vuitton has also introduced new adventures and NFT rewards, including a raffle for distributing ten brand new NFTs to the players. Each NFT will show Vivienne wearing different digital clothes that players can use as avatars or display as profile picture (PFP) NFTs.
Burberry has also partnered with Mythical Games to launch an NFT collection within the multiplayer game Blankos Block Party. Besides its Blanko character, Sharky B, sporting the TB Summer Monogram print, other branded NFT accessories—pool shoes, jetpack, etc.—are being sold in-game.
5. Virtual land acquisition
Digital fashion can only thrive in a digital world, so it’s no surprise that fashion houses are now buying up virtual spaces. For example, Adidas bought 144 plots of land in The Sandbox metaverse for more than 400 ETH, equivalent to almost $1.7 million. Users visiting Adidas’s Sandbox plots will have exclusive access to virtual experiences and merchandise.
Another digital fashion company, Nike, developed a virtual space called NikeLand on Roblox, where fans can connect and collaborate. The immersive 3D metaverse contains Nike headquarters and gaming arenas just like in the physical world. Participants can play games like tag, the floor is lava, dodgeball, or even design their own mini-games.
There’s also a digital showroom where users can showcase their NikeLand avatars wearing exclusive Nike fashion NFTs. They can also purchase virtual clothes like the Air Max 2021, ACG or the Nike Tech Pack.
6. Supply chain management
Counterfeit products have a market share of $4.2 trillion, with the fashion industry being the worst affected sector. In 2020, luxury fashion houses suffered losses of over $50 billion due to fake products flooding the market. This counterfeit menace stems mainly from unscientific inventory management and gaping loopholes in the supply chain. Blockchain-enabled NFTs can help make merchandise authentication simple and seamless with real-time tracing and tracking.
Louis Vuitton was one of the first brands to conceive a blockchain solution for proving the authenticity of fashion products. In collaboration with Prada Group and Cartier, it launched the Aura Blockchain Consortium to reinforce trust and transparency in the fashion industry. The platform helps trace the source of raw materials, track the product during manufacturing, and provide immutable ownership certificates.
Moreover, fashion NFTs can act as digital twins of physical products, with geolocated and timestamped metadata. Thanks to immutable data storage, detecting fraud and duplicate products is now much easier.
7. Upholding sustainability pledges
The global apparel industry has an enormous carbon footprint. Digital fashion houses account for around 10% of global carbon dioxide output, which is more than the carbon consumption of airplanes and ships combined. In 2018, the industry produced more greenhouse gasses than France, Germany, and the U.K. A 2020 McKinsey report suggested that apparel industries would produce around 2.7 billion metric tons of carbon dioxide by 2030 if left unchecked.
Digital adoption is one way to make fashion more sustainable. Fashion companies can cut down on factory output and reduce their carbon footprint and waste production by focussing more of their efforts on NFTs. Not all blockchains are energy efficient, however, so companies that want to create and sell NFTs in a digital marketplace should be aware of the sustainable options that are available.
8. Community building
Digital fashion can be a catalyst for forging vibrant communities of people who are passionate about a cause. As the above section demonstrates, sustainability is important to preserve the planet. And with over 60% of people opting for greener alternatives, fashion companies are innovating to better serve enviornmentally conscious customers.
H&M, who believe in sustainable fashion, introduced ‘Looop’ to recycle old clothes and reduce textile wastes. Later, they launched the ‘H&M Looop Island’ in the digital game ‘Animal Crossing: New Horizons’ to recycle virtual outfits. The company is also reaching out to its vegan customers with PETA-approved digital fashion pieces. H&M is thus positioning itself as an environment-friendly brand, bringing together climate-conscious people in active digital communities.
9. Customer support and management
Crypto-native fashion brands are utilizing the digital space to forge long-lasting connections with their customers. When users own NFTs from a particular brand, they get access to an exclusive community with special perks and benefits. NFTs have thus become an excellent tool to onboard new clients and retain existing ones.
A fashion NFT is not just a collectible sitting idly in the owner’s wallet. NFTs are much more than digital files on the blockchain, and have enormous potential to unlock new modes of communication between customers and companies. For example, customers can redeem physical clothes using their NFTs or get early access to upcoming launches and design drops. Moreover, NFT wallets can become direct channels for communicating seasonal offers and discounts, replacing dull emails.
NFTs are also a great way to help customers contribute to projects they are passionate about. For example, Givenchy’s creative director, Matthew Williams, collaborated with graphic artist, Chito, to design fifteen NFTs on the energy-saving Polygon network. The company has announced its plan to donate the money to a charity that helps clean the world’s oceans.
Another luxury label, Jimmy Choo, collaborated with New York artist Eric Haze to launch 8,888 collectible mystery boxes containing rare cards. Additionally, a digital sneaker was up for auction on Binance where The Jimmy Choo Foundation earmarked profits to support the Women for Women International, a nonprofit that provides support for women who have survived war. Such NFT-based CSR projects can help companies stand out to its customers, forging strong ties based on shared principles.
10. Innovative advertising strategies
NFTs are ideal for marketing purposes since they offer a vibrant ecosystem that appeals to customers. Naturally, early adoption of NFTs in a company’s advertising and marketing strategy will reap benefits in the long run. For instance, Gucci celebrated its 100th anniversary by auctioning its first NFT, Gucci Aria, at Christie’s for $25,000. Gucci then donated the proceeds to UNICEF to support its COVID-19 vaccine initiative and bought ten tons of Carbon Offsets.
The Italian fashion house has now partnered with animated celebs and vinyl dolls creator Superplastic to release the SuperGucci NFT series. The company has decided to enter the metaverse with a new partnership between 10KTF and Gucci Grail NFTs.
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