It’s no surprise that nonfungible tokens (NFT) have been dominating the crypto market this year. The booming digital asset class generated over $2.5 billion in sales within the first six months of 2021, demonstrating unheard-of financial gains for artists, brands and content creators across the globe.
The rise of metaverses has also impacted the adoption of NFTs, as the world is moving closer toward visions of a future defined by augmented reality. As such, NFTs are further demonstrating the convergence of culture with technology, which in turn is having an impact on a number of mainstream industries.
Showcasing culture and community
Specifically speaking, the million-dollar luxury fashion sector has started taking note of NFTs. High-end fashion brands, such as Dolce & Gabbana and Jimmy Choo, have recently launched their own NFT collections, while designer Rebecca Minkoff became the first American female designer to create and showcase an NFT collection during New York Fashion Week 2021.
Megan Kaspar, managing director at Magnetic Capital and member of Red DAO — a fashion-focused decentralized autonomous organization — told Cointelegraph that she believes fashion is one of the most interesting NFT categories:
“The fashion industry, one of the largest industries in the world, generated $2.5 trillion in global annual revenues prior to the pandemic. Red DAO’s thesis around digital NFT fashion includes the potential of global revenues at least doubling over the next two decades due to the digitization of fashion and new capabilities offered.”
While NFTs for the fashion industry is still a very early concept, Kaspar explained that physical fashion today has limitations. For instance, she pointed out that luxury fashion items will always have a secondary retail market value, but as a product is diminished over time, the items lose their worth.
Yet digital fashion pieces will always remain intact, with the added potential to increase in value if they are highly sought after. Kaspar commented that digital NFT fashion pieces can also be worn virtually, as she recently demonstrated during a video interview where she sported virtual NFT earnings and other accessories.
Kaspar further noted that unlike tangible fashion pieces, digital items can be used as collateral for client retention and community engagement. Kaspar mentioned that high-end designers currently have limited engagement with consumers: “NFTs can be used to redeem physical items or to unlock upcoming fashion drops. They can also provide access to private events.” She added, “Designers will also be able to communicate with customers through digital wallets, almost like email.”
While Kaspar realizes that these use cases are still very early, she believes that more brands will eventually start to create NFTs to achieve such benefits. For now, however, it’s notable that a few innovative luxury and haute couture fashion brands have already started to demonstrate the potential of NFTs.
Shashi Menon, the Dubai-based publisher of Vogue Arabia and founder and CEO of UNXD — a creator and curator platform that designed all of the digital assets for Dolce & Gabbana’s nine-piece NFT collection — told Cointelegraph that his team directly approached Dolce & Gabbana in April this year with the idea of launching an NFT collection.
Menon shared that the opportunity was contextualized from a place of understanding both the luxury fashion sector and the crypto world. “We’ve been involved in both for years and think we have a unique perspective to offer,” he said. Menon believes that the story around NFTs and fashion is not one of technology but rather about culture, remarking that both fashion and NFTs are “ultimately forms of cultural expression.”
While culture may be the most important element from a brand’s perspective, blockchain technology plays a critical role in ensuring the unique benefits achieved by NFTs, such as immutability and provenance. For instance, Menon explained that Dolce & Gabbana’s NFT collection — known as “Collezione Genesi” — was historic for a number of reasons:
“There is deep provenance — here we had one of the world’s iconic luxury brands creating its debut NFT collection, and it was personally designed by the founders/namesake designers. There is also extreme rarity, as the collection only featured nine items. These pieces were made once and will never be made again.”
Menon added that the craftsmanship and materials used in the physical creations were exquisite, which in turn meant that a great deal of time was spent on the digital artwork. “We obsessed over the smallest details of texturing, fabrics, lighting, shadows, reflections and physics to achieve an intensely photorealistic result. The dresses and suit featured Murano glass and Swarovski crystals, while the crowns were made of silver, plated in gold and palladium, and featured beautiful rubies, sapphires and diamonds,” he commented.
One of the major benefits of digital fashion pieces is the experience they can bring to the virtual world. Menon elaborated:
“The benefits for Genesis holders bridge the digital and the physical worlds in a way not previously done before. We’re providing digital utility through metaverse wearables, physical utility with the products, and exclusive access/experiences to create a truly special result.”
Although the concept remains futuristic, sales were impressive. Dolce & Gabbana announced on Sept. 30 that it had sold the nine-piece NFT collection, alongside some physical couture pieces, for a total of 1,885.719 Ether (ETH), equivalent to nearly $5.7 million at the time.
Kaspar mentioned Red DAO won the auction for “The Doge Crown,” which also came with a physical version. Red DAO paid 423.5 ETH or $1.27 million at the time of sale. The organization also won the two purely digital “Impossible” jackets, bringing its total spending to nearly $1.9 million.
Kaspar explained that winning “The Doge Crown” was an exciting moment for Red DAO, given the fact that the rank of “Doge” (as in an elected head of state) has its roots in Italy, along with the Dogecoin (DOGE) crossover. “We’ve already had a number of celebrities who promote Dogecoin reach out to us asking to wear the crown at upcoming events,” said Kaspar.
In addition to Dolce & Gabbana’s Genesis collection, luxury fashion accessories brand Jimmy Choo has recently launched an NFT initiative in collaboration with New York artist Eric Haze. The collection features 8,888 “mystery boxes” for purchase, underpinning the theme of collectability.
In addition, a digital version of the sneaker produced for the collection was recently made available for bidding on the Binance platform. All profits from the auction will be donated to The Jimmy Choo Foundation in support of “Women for Women International,” an organization helping female war survivors.
Robert Tran, CEO of Ucollex — the NFT platform behind the launch of the Jimmy Choo collection — told Cointelegraph that the sneaker NFT rotating against a canvas of Haze’s signature script only exists digitally. However, the auction’s highest bidder will also receive a limited-edition hand-painted sneaker.
Remaining true to the theme of culture, Tran added that this collaboration blends fashion with art, along with the evolution of street culture in an experimental meeting of creative minds from different worlds:
“The notion of collectability is a strong theme in the collaboration, as seen with the limited edition ‘[email protected],’ which sold out the morning it launched. So, the timing felt right for the brand to enter the NFT conversation, amplifying New York artist Eric Haze’s creativity and Jimmy Choo’s designs as digital collectibles talking to a new audience. The fusing of digital and physical will only continue to grow in influence.”
Is the mainstream ready for fashion NFTs?
While there certainly are a number of benefits associated with digital fashion today, the concept is still in early development. As social media platforms such as Facebook and TikTok continue to invest in metaverse capabilities, industry experts predict that fashion NFTs will become increasingly common.
For instance, Tran pointed out that metaverses have already been introduced to the mainstream through remote work meetings. In turn, he believes that mass NFT adoption is not far off: “There should be no argument, the industry will only continue to explode. There will come a day when fashion shows are done digitally and the rights of those elements on display are bid on and sold, purely for digital use.”
Menon added that while these concepts may not be universally applicable today, they will become the norm in the future. He pointed out that fashion brands and other businesses interested in continuity will want to create NFTs for their audiences moving forward. In terms of community engagement, Menon said that Dolce & Gabbana plans to launch its own NFT community known as “DGFamily,” which will be rolled out in the near future.
Education is still required
Although it may be safe to assume that more brands will want to create NFTs to stay current, Kaspar pointed out that we are also witnessing a trend where fashion brands and designers are jumping in on the NFT hype just to capture their share of the market. With this in mind, she believes that most brands still do not fully understand the power of wearable digital fashion and the full range of features that NFTs can provide.
For instance, Kaspar shared that a less-discussed disruptive feature of digitizing luxury fashion is the ability to use these items as collateral in decentralized finance smart contracts: “These will all be NFTs on the blockchain that will be tied to smart contracts. That’s what this technology provides.”
Given the early nature of fashion NFTs, Kaspar mentioned that this opportunity also comes with an educational component: “I have fashion brands calling me to figure out how to get involved. I think what Dolce & Gabbana has done is progressive and will lead the way for other brands.”