Following Gucci’s lead, it seems more high-end companies will start developing digital assets, which means an increase in the interest in ownership of NFTs.
The Italian fashion label has launched its virtual sneakers in collaboration with the Belarus-based fashion-tech startup Wanna. According to W Magazine, the new footwear, which ranges in price from $9 to $12, “will be available for purchase exclusively on Gucci’s mobile app,” allowing “users to flex them on a variety of other digital locations and game avatars, including Roblox.”
Gucci’s sneakers are an example of virtual fashion offers, not of NFTs. The more interesting question is not whether luxury brands will rush to embrace virtual fashion and corresponding NFTs. Instead, it is whether NFTs – which are not assets in and of themselves, but electronic records representing ownership of assets – can be linked to physical products to provide the same authentication and traceability benefits that exist for Beeple’s nearly $70 million artworks and the tokenized version of Twitter founder Jack Dorsey’s first-ever tweet.
According to experts, the answer is YES – NFT technology can, in theory, be extended to physical assets.
The concept – or, more specifically, the authenticity-specific and transparent recording aspects of such scenarios – is certainly compelling, and while inherently cyber-in-nature, the facets of NFTs have implications for and have sparked interest among luxury goods brands.
These brands may have to deal with issues related to the widespread sale of counterfeit goods, and such issues might be amplified in light of the resale market.
It is not uncommon to use NFTs as confirmation of legitimacy. Indeed, Arianee, an early NFT adopter, just announced it had raised $9.6 million from French investment bank Bpifrance and France’s leading seed investment company ISAI to “further develop its luxury-focused blockchain, which takes the form of NFT digital passports for luxury goods”. This can help guarantee the authenticity of linked products.
How luxury brands are using NFTs
1. Forming charitable alliances
Working with other well-known corporate partners to hold charity auctions allows NFT artists to use their artistic abilities to raise funds for worthy causes. Consumers may be hesitant to spend money on NFTs that abuse the artist for the advantage of the premium brand. However, if the money goes to a charity, people might be more interested since they know their money is making a difference. Consider teaming up with celebrities to hold an NFT auction to collect funds for a cause that your company supports and that your customers care greatly about.
Several firms have partnered with artists, actors, and other celebrities to promote awareness of their products and services. For example, in August 2021, NFT platform Cryptograph and photographer Davis Factor collaborated to auction off never-before-seen pictures of NBA legend Kobe Bryant. The Mamba & Mambacita Sports Foundation received 100% of the revenue. Instead of contributing cash or cryptocurrency, a thoughtful collector can purchase NFTs and donate them to charity. If you wish to gift NFTs, you should first ask the charity if they are okay keeping the NFTs as an investment or if they would prefer to sell them and/or convert the revenue into cash.
2. Expanding cooperations with NFTs
Fashion labels frequently work with artists, guest designers, and bloggers. NFT collaborations are more unexpected and one-of-a-kind and they can broaden the potential pool of collaborators with whom both parties work. Designer Rebecca Minkoff, for example, collaborated with The Dematerialised and Yahoo to auction off 400 digital outfits on the peer-to-peer marketplace OpenSea. NFTs also enable brands to pay original creators royalties whenever things are sold to new owners, assuring continuing collaborator income.
3. Commemorating crucial brand moments
While digital art collection is a big part of the NFT landscape, other goods such as New York Times stories, viral tweets, and even memes have sold as NFTs. Thus, anything that can be depicted as a digital property can theoretically become one. Use an artefact from the event to archive a piece of your history and advertise the moment if, for example, you have a flagship brick-and-mortar opening, a seasonal runway show, a product launch, or other major brand moments.
Having a premium brand means being innovative, unique, and exclusive, and finding new ways to contact target customers can dramatically improve brand image. Implementing NFTs into your marketing plan can provide your business with new avenues for collaboration, promote collaborative and philanthropic initiatives, and strengthen your legacy. Understanding how NFTs fit into the puzzle now can help brands expand into a future where luxury, with its innovation, individuality, and exclusivity, can thrive.
Digital warranties VS traditional warranties
Businesses are currently relying on automated warranty management solutions to collect essential product and customer data. They are producing precise reports based on real-time warranty management product data. This results in simple pre-emptive and proactive warranty management solutions using digital tools.
- With the help of digital registration, activation, and warranty management, processes are becoming more frictionless and transparent.
- A better brand and improved consumer engagement are becoming possibilities as digital warranties efficiently connect all ends of the product’s life cycle.
- Through completely connected operations, many IoT concepts are driving processes and higher revenues.
Using NFT mechanisms to implement product warranties on the blockchain
A blockchain-based NFT system for implementing product warranties can help you maintain a record of previous owners, warranty conditions, and the number of transfers. When purchasing luxury brands, digital warranties provide clients with added peace of mind. It can also provide information about previous purchases, warranty periods, and other items.
Digital warranties assist luxury businesses in combating counterfeits. If these solutions become industry standards, items without an NFT as a guarantee are likely to not be genuine. This can help buyers to choose real items.
Prada, LVMH, and Cartier formed the Aura Blockchain Consortium in 2021. This blockchain solution platform can track product history and ownership while also authenticating products. Gucci has also taken the lead in implementing NFTs by developing a digital shoe platform. The startup sells digital sneakers for roughly $12, which is far less expensive than physical products. This enables brand access without the need for true desaturation.
As a result of the innovative advertising strategies, the brand gains fresh market exposure. Louis Vuitton and Burberry have both introduced their own NFT collections, which offer digital clothes for video games. Given that luxury fashion houses and video games do not appear to be the most demographically aligned, these collaborations were surprisingly imaginative.
As we get closer to the dawn of the metaverse, there may be a huge opportunity for fashion brands to make a killing by selling their products on digital channels. This strategy allows businesses to profit on the emotional link to ownership as well as the need to demonstrate individualism and prestige through their products.
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