The nonfungible token (NFT) market is possibly the hottest right now, with no signs of stopping. Future forecasts have placed the growing industry, along with the creation of the MetaVerse, to reach $56 billion by 2030. With its rising climb to mainstream acclaim, more and more premium brands are staking their claims and investing in the metaverse and their new digital collectibles.
As more aspects of people’s lives are moving online, the demand for digital fashion and goods will increase significantly in the coming years, and NFT is right there to carry it through.
The future of the metaverse, as some critics foresee, is one draped in style. 2021 saw music and fashion taking their tentative and foundational steps into the metaverse with inaugural NFT launches from popular recording artists and celebrated fashion houses. It doesn’t matter if they’re trying to break free from the catastrations imposed by the physical world or aiming to establish a beachhead in the rapidly evolving Web 3.0, it’s now obvious that having a well thought out strategy to maximize a company’s digital presence has become an imperative business necessity. This is equally true across the art world, entertainment industry, and global luxury goods sector.
The Metaverse, in simple terms, are virtual spaces where people can interact with each other and with digital objects through personalized avatars. It’s a groundbreaking concept still being developed and built daily. Within this short time frame since its launch, the spaces that are available to us now create opportunities for luxury brands to benefit from digital collectibles and the rise of so-called “social gaming” already.
Buyers of digital fashion get an NFT which proves ownership and authenticity. With that NFT, the owner can showcase their brand new designer scarf, or any other luxurious item they may have, in the digital world, or metaverse, where users interact through avatars.
Global fashion brands
There have been numerous experience strategists who utilise global platforms such as Roblox to cite their examples. With the gaming and creation system, 1 in 5 players change their avatar every day. In May 2021, the Roblox platform hosted a virtual exhibition for luxury fashion brand Gucci from May 17–31. Players on Roblox could purchase digital models of real Gucci products for a small amount of in-game currency. Once the exhibition ran out of digital assets to sell, gamers began to put up the branded NFT items for auction, inflating their cost tenfold. One of the items, a virtual version of the highly desirable Dionysus handbag, sold at auction for $4,100, which is $700 higher than the retail price of the real-life version.
In September 2021, the French premium brand Balenciaga launched a digital line of Fortnite fashion apparel, which could be purchased with in-game currency for approximately $8. Crypto-gaming experts predict that the social gaming segment of digital asset investments can add around $10–$20 million to the luxury goods market.
Watches & Jewelry
For luxury goods manufacturers to move past the COVID blues, they must exercise aggressive undertakings in order to move past their setbacks. More luxury brands have considered diversifying their portfolio with NFT-based games, videos, and virtual couture.
Examples include a Gucci film inspired by its Aria collection and ongoing drops of Gucci-branded digital sneakers; Burberry’s drop of ‘Blankos Block Party’ online game with NFTs of featured character Sharky B; and Louis Vuitton’s ‘Louis: The Game’, a free gaming experience paired with ten NFTs by famed creator Beeple. Not to outdone, on September 30th Dolce & Gabbana rang up 1,885.719 Ether ($5.7 million) for a nine-piece collection of NFTs auctioned alongside some physical couture.
These high-profile creators and luxury brands increasingly view NFTs as the perfect opportunity for market growth. Auction-based marketplaces provide an ideal distribution channel and avid collectors typically skew younger and well-heeled buyers, representing a highly desirable demographic. Then there’s the plain fact that the ongoing land rush to the metaverse holds the promise of strong demand for NFT drops and solid appreciation in the secondary market for thoughtfully crafted collections.
As the physical world still maintains a capital on luxury fashion brands due to their dependence on the physicality of clothing to connect with their customers, the success of certain luxury houses are only some of the examples of what NFT and the Metaverse can bring to the table. Brands that are less accustomed to selling digital goods will have a different relation to NFTs and the transition of their industry, as so many of their qualities rely on physical materials.
As an immersive experience, the Metaverse – coupled with the NFT-incentivised gaming platforms – utilize all avenues to exercise their investment. They will wear clothing and use items as manifestations of individualization and personal expression, much like they would in the physical world — all of which opens up a really exciting opportunity for premium brands.