Is it here to stay or just temporary entertainment?

Affected by the pandemic, the fashion industry posted a 20 percent decline in revenues in 2019–20, according to the latest industry report from McKinsey, in partnership with the Business of Fashion. About 7 percent of companies left the market entirely: either due to financial distress or because rivals bought them.

But 2021 turned out to become a recovery year for the industry, especially for luxury brands. Not just because of the economic resilience of their audiences, but also thanks of engaging with high-value younger consumer cohorts. 

NFT-mania

Digital natives, gen Z-s, are not just having social media dictated consumerism patterns, but are also ready to buy digital goods inside hyper-interactive digital environments like Metaverse. 

Last year brands started to actively explore Terra Incognita, where millions of youngsters spend a significant amount of time. For instance, last May a digital Gucci bag sold for US $4,000 on the VR game Roblox, later on, the platform has collaborated with Tommy Hilfiger, DreesX, Vans, and others.  

Sportswear giant Adidas Originals launched its first NFT drop of digital and physical products. The NFTs gave buyers access to virtual wearables for the blockchain-based gaming world, The Sandbox, and a physical hoodie, tracksuit, and Gmoney’s iconic orange beanie.

Louis Vuitton went even further. In commemoration of its 200th birth anniversary, the French fashion house created its own video game which draws the spotlight to brab-nd’s rich heritage through NFTs and in-game innovations.

Ralph Lauren, for instance, partnered with South Korean social network app Zepeto to create a virtual fashion collection where users could dress their avatars in exclusive products or appearance-altering “skins.”

Designer eyewear company Ray-Ban just featured the brand’s iconic Aviator sunglasses in the form of NFTs. It was created by German artist Oliver Latta, renowned for his provocative 3D motion designs. The NFT was auctioned on OpenSea with the proceeds going to the Italian Art Trust. 

Is it all about social media? 

According to Simon Windsor, cofounder and joint managing director at Dimension Studio, an agency that worked with Balenciaga on its video game, 

for some consumers, digital fashion is a natural extension of applying social media filters on platforms such as Instagram and Snapchat.  But how many of those are out there? And also, will the interest in the industry remain the same after the crypto-crash influencing NFTs? 

Yes, artificial intelligence and augmented reality could open up opportunities for new business models that leverage virtual fashion. Technology that allows for 360-degree views has already been used to present seasonal collections through online showrooms, and avatars of models have walked 3-D virtual runways. But again: how soon will it become a common thing, just a hype phenomenon? 

 

In those regards, probably, fashion NFTs have much more potential as ownership and authenticity proof. “This will fundamentally change digital ownership, creative structures, the creative economy, how we view money even,” said Karinna Nobbs, co-chief executive and chief experience officer of NFT marketplace The Dematerialised, to Business of fashion. 

With no shortage of marketing hype, still, monetization opportunities are likely to be contingent on the psychology of scarcity. Aside from that, NFTs can be used as a tool for the security of authentication and as an element of community building. 

 

Featured Image: Nicolas Ladino Silva via unsplash.com