Fashion brands

Comment: Big Fashion Brands’ Experiment With NFTs Could Go Wrong

ATTRACT FANS WITH NFTS

NFTs are online assets that also serve as certificates of ownership, typically digital items like an artwork or video, but potentially even physical items like clothing or a car.

People can buy and sell NFTs on marketplaces like OpenSea, LooksRare, and Magic Eden, and the market has exploded in 2021 thanks to the hype of Beeple and high-profile celebrities like Snoop Dogg and Lebron James issuing their own NFT.

Sports associations such as the NBA and NFL were among the first to sell NFTs of sports hero trading cards, videos of classic moments, and even player-signed jerseys. It’s about using NFTs to capitalize on a loyal fanbase by gifting them with rare assets.

In the coming years, NFTs are likely to merge with the virtual worlds of the metaverse, in the sense that many will likely be usable there. Balenciaga, another luxury fashion house, was an early pioneer in this direction, offering a collection of NFT accessories that players can wear in Fortnite.

Nike was particularly forward-thinking when it purchased NFT pioneers RTFKT Studios in late 2021. RTFKT made a name for itself with a manga-style 3D NFT character collection called CloneX that now trades for dozens thousands of US dollars. In line with other top NFT collections such as Bored Apes, RTFKT uses CloneX characters to create a storyline that unfolds gradually over time.

In February, CloneX owners got NFTs dropped from mysterious digital boxes known as Mnlths. The Mnlths had Nike swooshes on the side and soon began selling for over US$10,000 on NFT Markets, even though no one knew what was inside.

In April, Nike announced that owners could “burn” them to unlock a pair of digital sneakers called CryptoKicks, along with a flask allowing users to customize them, and another mystery box called Mnlth 2. A pair of CryptoKicks will has since been sold for US$134,000.

Meanwhile, online platforms are helping to make these NFTs more usable. Meta is building features for Facebook and Instagram that will allow users to create NFTs and feature them on their social media profiles. Spotify is working on something similar, with a view to creating new revenue streams for artists and record labels.