What exactly is an NFT (Non-Fungible Token) in the fashion industry? Fashion NFTs can take numerous forms, including virtual clothes that customers can wear within virtual worlds, digital content with which owners can engage, and digital twins of physical works.
According to the Vogue Business Index, 17% of the businesses surveyed had some sort of relationship with NFTs in 2021. And, with Morgan Stanley projecting a $25 billion luxury NFT industry, the number of fashion companies entering the market is only growing.
It’s not surprising that fashion NFTs, which meet the demand for increasing digitalization and enable personalization in the online world, are so popular.
Brands are integrating fashion and NFTs together in a variety of imaginative ways, from digital twins that increase the traceability of rare and costly clothing to virtual things that buyers can buy, wear in the metaverse, and collect in the digital realm.
Fashion manufacturers have been purchasing their own NFTs, often in the form of virtual land on which to establish stores and showrooms in order to sell to younger consumers.
Virtual environments like The Sandbox allow users to purchase tracts of land in the form of an NFT, and premium brands like Gucci have jumped right in. Gucci aims to collaborate with the platform to develop an interactive fashion experience based on Gucci Vault, the premium brand’s conceptual realm. Gucci, however, is not alone in the metaverse. For example, Selfridges just created the world’s first NFT department store within Decentraland, where users may view unique NFTs and browse Selfridges merchandise.
A Scalefast survey found that 25% of buyers interested in purchasing an NFT would be more likely to do so if it came with a physical good. Many companies, predictably combine NFTs with real products that customers can touch and wear.
Dolce & Gabbana’s record-breaking Collezione Genesi, the first premium NFT collection to combine digital and physical works, perfectly illustrates this. Winning bidders received both a real and virtual version of the design after paying $5.7 million at auction. Another example is Nick Graham, which has recently debuted its NFT/AR outerwear collection. Purchasers may authenticate their garments on the blockchain and use it to unlock exclusive AR experiences via a QR code embroidered inside each product.
The NFT market’s meteoric expansion in 2021 has slowed, according to Chainalysis statistics, with monthly spending on NFTs falling from more than $12 billion in January to less than $8 billion in April 2022. While growth has slowed, both spending and the number of active purchasers in the market remain significantly greater than at the start of 2021. This is a good indicator because it shows that consumers are still interested.
NFTs will undoubtedly play an important role in the future of fashion, especially as the metaverse evolves to provide new outlets for customers to showcase their digital purchases. Why? Because Generation Z consumers want digitization and personalization. NFTs now provide a new level of exclusivity as well as the opportunity to transform digital designs and collections into highly scarce, precious, sumptuous, and one-of-a-kind collector pieces.
Fraquoh and Franchomme
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