Over the past few months, we have been witnessing a new fad with a profound impact on the fashion, design and art sectors. In a world that is becoming ever more digital, here come NFTs.
What Are NFTs?
Many people believe that NFTs are the next fashion, design and art craze. As someone in the fashion industry and with a background in digital, I have been keeping up to date on NFTs and plan to design some for my luxury fashion brand.
NFTs stand for non-fungible tokens, a unique string of characters that were first ideated in limited cryptocurrency circles but have since gone to expand to the wider public. Bought and sold using Ethereum and Bitcoin, they authenticate the originality of design and artworks. While digital currencies are interchangeable or fungible, NFTs are the opposite. They are irreplaceable. It is their uniqueness that makes them so valuable, especially in the eyes of collectors. A timed collection that goes on the market to be sold is called a “drop.”
The NFT gold rush has already yielded some incredible gains. RTFKT recently sold a digital jacket for more than $125,000, and Beeple digital art got acquired for a stupendous $69 million.
Fashion Adoption
In my opinion, NFTs are about to profoundly change the world of luxury fashion. Scarcity is the basis for both the luxury market and NFTs. Just like in the fashion and art world, NFTs are all about collectibles. NFTs now bring a new level of exclusivity and also an opportunity to turn digital designs and collections into highly scarce, valuable, luxurious and unique collector pieces. While customers’ self-expression used to be only physical, it is now merging with the virtual at an accelerated pace. The most straightforward example of a product NFT is when the asset is the digital twin of a real-life product and has its own value.
When looking at specific garments, sneakers and streetwear have been among the first categories to adopt NFTs. Luxury fashion companies like Gucci have already announced they are launching their own NFTs. Until now, the idea of spending real money on virtual clothes was farfetched. However, this mindset is changing rapidly as millennials, Gen-Z and generation alpha enter the luxury market. Customers will soon be able to create images of themselves wearing 3D clothing and then share them on social media.
As all luxury brands know, customers do not buy yet another pair of expensive shoes or a handbag because they need it desperately. They acquire expensive items because they want to be part of the luxury culture, heritage and unique story that a certain brand has built. NFTs are like social assets that can offer customers a certain status, and they offer a new market for traders and investors.
Hybridization And Platforms
The future of art and design is a highly hybrid future that mixes traditional physical expressions of originality and creativity with highly digitalized ways and means of selling art. Buyers can already purchase wearable NFTs modeled after digital designs. This is a clear spill-over effect from the digital into the physical world. The future of NFTs will likely also be linked with virtual and augmented reality, and soon you will be able to view your rare collector piece like Raf Simons’ parka in your own house.
The concept of ownership is also changing. While in the past, transfers of ownership depended on intermediaries, trustworthy blockchain transactions will become automated.
A New Art World
Sotheby became one of the most recent established names in art to adopt NFTs. The auction house recently sold a digital art collection for more than $17 million. Even art galleries are becoming more and more digital.
New digital platforms are emerging daily. Abu Dhabi recently launched a new art platform called Hart, which allows artists to digitally tokenize and sell their artworks. Masterworks has emerged as a new investment platform of iconic artworks. It is turning the art market into a stock market by selling fractions of paintings by famous artists. The recent Netflix documentary Made You Look on art fraud shows how important it is to have authentication in the art world.
Monetization And The Future
The creators of NFTs can receive royalties every time their creation is sold or changes hands. In the past, second-hand markets struggled with attracting the most exquisite buyers and collectors. NFTs could change the rules of this luxury game forever as they are meant to be timeless.
In my opinion, NFTs will also impact advertising and digital storytelling, as consumers are increasingly more interested in stories behind the brands they buy. NFTs bring democratization, decentralization and demystification of artwork and design pieces.
Up-and-coming brands in the fashion and art industries should follow along with NFT updates and other similar trends. Collaborations with famous fashion designers and artists could be one way of tapping into this market. Launching a few unique NFTs to test the waters could also be a good early adoption test. If designed and marketed properly, various forms of creative works can be turned into collector items. Brands that are already using NFTs today allow users to acquire unique digital artworks and digital collectibles like albums, gig tickets, clothing, original forms of art and even unique experiences.
The key angle for brands here is to establish a new world of sale engagement and digital interaction with customers. Memorable items can increase customer loyalty. One-off experiences and unique moments in time can now be captured, exchanged and treasured, which is something that all brands could use to establish a much more permanent tie with their clients. Ephemeral items fade away, but a collector piece is a much stronger tie to a specific brand.
French philosopher Jean-Paul Sartre once said: “Life has no meaning, the moment you lose the illusion of being eternal.” NFTs are surely a new tool that is bringing us a step closer to eternity.