Who thought just a few years ago that a digital jacket could be worth $125,000? What even a digital jacket is you may ask…Well, welcome to the new craze and a whole new world of NFTs (non-fungible tokens). A territory you must dive into if you want to stay on top of your competition.
As usual, luxury fashion brands are the first to set the latest trends, and NFTs are no exception. According to the Vogue Business Index, 17% of the featured brands have already tried incorporating NFTs to some extent.
Retail brands like The Hundreds are noticing the potential too. They launched the Adam Bomb Squad NFT collection of 25,000 unique illustrated combinations of the brand’s culture bomb icons and backgrounds. The Adam Bomb character has been around for over 15 years and its popularity is enormous. You can see it on celebrities, at awards shows and Pixar movies, and even on the tallest Times Square billboard. And now, Adam Bombs’ fans can also enjoy owning them as NFTs and erase the lines between identity, community and ownership.
Expanding your brand’s signature offering into the world of NFTs is just one potential benefit you can tap when entering this realm. We will cover many other great uses in a separate article, but for now, let’s take a step back to quickly explain what NFTs are. If you are not completely new to the space, feel free to skip to the next section.
What Is an NFT?
NFT stands for non-fungible token recorded on the blockchain. This simply means that they can’t be exchanged for other items. For example, you could exchange a $50 bill for 10 five-dollar bills. But if your fifty has been signed by Novak Djokovich it will be one of a kind and non-fungible. Each NFT is one-of-a-kind. They are not interchangeable, because each token has a unique value that cannot be replicated.
Let’s further break down this definition and understand what a token and a blockchain is. A blockchain is a decentralized database that facilitates the process of recording online transactions and tracking digital assets in a distributed and open network.
A token is a unit of data stored on a blockchain database. The database is designed to guarantee nobody ever can modify the history of the token’s ownership. Think Bitcoin, Ethereum or other popular blockchains such as Polygon, Solana and others.
When you buy an NFT, you are not just buying the license to use it – you become the owner of the actual asset. Your buying transaction (and proof of ownership) is recorded on the blockchain database. You can hold on to your NFT for as long as you’d like or sell it to someone else if you wish.
Is the NFT gold rush over?
Or is it just the beginning of connecting Web2 & Web3 experiences as a brand-building and customer retention opportunity?
In 2021, users spent more than $44.2 billion of cryptocurrency in NFT marketplaces, up from just $106 million in 2020. And in the first quarter of 2022 NFT buyers spent already over US$37 billion on NFT marketplaces, according to the State of Web3 Report by Chainalysis.
Yet, the initial hype is beginning to clear as NFT price tags level out and as the barriers to entry into the NFT-world have dramatically fallen. Today, any brand or person can create their own NFT (with little, or a lot of know-how), which has led to a flood of NFTs for sale. Add to this the current bear crypto market and you may not see a point in leaving your comfort zone and entering this space.
But don’t be so fast to decide just yet. According to data from Vogue Business, one in five luxury fashion consumers rate NFTs as exciting for the industry. And it is already clear that the excitement spreads throughout retail as well.
Digital fashion is already a thing and it is here to stay. Don’t just take my word for it but look at other big brands’ moves within the industry. Remember the $125,000 digital jacket? Nike acquired its creator company RTFKT at the end of 2021. At the time of the acquisition, the company was valued at a bit over $30mil.
Nike’s CEO John Donahoe named this move “another step that accelerates Nike’s digital transformation.”
You should also take notice of Facebook’s recent rebranding and claim to soon be part of the metaverse. This will definitely push the mass adoption of digital fashion even further. Fashion is all about self-expression and a way to communicate people’s individuality.
With more and more shoppers today seeking ways to represent themselves in the digital world as much as in the physical one, an opportunity for fashion to tap the Web3 potential is wide open. AND it is becoming a seamless experience for end-consumers.
“Whether we like to admit it or not, the digital realm is going to become more and more integrated into our society and into our daily lives. On that basis alone, the fashion industry should care about emerging technologies and ways to benefit, and ways their audience can too. From a brand awareness perspective, appealing to the younger generation and staying in the public’s minds is incredibly important for any business. Industries are always looking at ways to maximize growth, evolve and I think NFTs are likely going to stick around for some time,”
Ryan Marsh from Quantus Gallery, which works closely with digital artists
Nike is not an exception. There are hundreds of retail brands already taking advantage of NFTs to drive sales and boost brand loyalty. Think Walmart, GAP, Adidas, Puma and Taco Bell to just name a few.
Another bell rings for NFTs bright future when you learn that over 30% of sports fans are interested in exploring NFTs, according to a recent study by Statista.
Final thoughts on NFTs for fashion eCommerce
It’s never been a more exciting time to move your eCommerce business to the next level. NFTs hold huge potential, and it’s up to your business to find your own ways to leverage them. NFTs could give you not just a competitive advantage as an early adopter of an exciting technology but also many creative ideas to build and grow your customer community and culture. And we all know that this is what truly makes great brands stand apart and enjoy lifelong success.
How Relite can help?
Before considering whether you should use NFTs for your business, you must understand that it is not about just being part of the next hot thing. It boils down to creating real value for your customers. Stay tuned for our next articles exploring various ways you can incorporate NFTs, along with examples of how the big names did it successfully.
If you are not sure whether NFTs are for you, feel free to get in touch with George, Relite's founder, and schedule a talk to explore opportunities.