The world of crypto-bros and digital creators is no longer limited to non-fungible tokens. Luxury brands are also joining the fray by 2022.
Taking advantage of the value NFT ownership provides as well as the technological innovation they offer, a growing number of brands are partnering with market-places, crypto-artists, and other NFT-experts.
By the end of Winter 2021, 17 percent of brands in the Vogue Business Index worked with NFTs. Through elaborate partnerships and structures, strategies have developed from art projects and digital collectibles to tokens that grant special perks.
A four-minute film inspired by Gucci’s latest collection and produced by filmmaker, Floria Sigismondi and creative director, Alessandro Michele was auctioned by Gucci as its first NFT in April. NFTs have also been used by other brands, such as Dolce & Gabbana, Balmain, Jimmy Choo and Givenchy.
According to Morgan Stanley, the marketplace for luxury goods could be dominated by metaverses, games, and NFTs by 2030.
It may seem absurd to pay a premium for non-existent clothes, but it is no less absurd than paying premiums for handbags, watches, perfumes, and other tangible items whose quality is comparable to that of cheaper alternatives.
‘Redeeem NFT’, Troika’s new NFT marketplace, provides a platform for luxury asset-backed NFTs and lists a variety of exclusive luxury products, including handbags, wallets, shoes, and collectibles.
NFTs are valued by market demand, and their individuality often drives this value higher. It’s the same principle the luxury industry uses, such as Hermès’ limited edition Birkin bags that drive a frenzy about obtaining them.
So much buzz is being generated around their potential explosive combination partly because NFTs and luxury goods are both based on scarcity. It is also worth exploring whether NFTs can help resolve some pain points in the luxury industry.
As an example, luxury brands can demonstrate that their products are ethically sourced, sustainably certified, and made using certain materials and artisan techniques. Furthermore, it means telling the story of products – it means showing that they have a past and a future.
NFTs offer something better: blockchain. Using a digital ledger to tell a product’s story makes sense since, in a sense, the blockchain is a story – a complete, unalterable record.
Fashion will be a driving force in the NFTs, not only because of the fashion houses and designers themselves but also because of the many companies that will create resources for them.