STEPPING INTO THE FUTURE: NFTsBest Practice
In the Fall of 2021, and since the beginning of the pandemic, non-fungible tokens (NFT) are a trendy topic in the digital world. However, it is within the luxury sector that this topic is more controversial. Can NFTs be considered as being the future for luxury brands? Is luxury marketing in the midst of a shift towards the use of NTFs? What does the future hold for the talent world?
What are NFTs ?
NFTs are non-fungible tokens, which means that they are unique and cannot be exchanged for an object of the same value. NFTs are made up of virtual and cryptographic elements engraved in the blockchain and have unique identification codes and metadata (title, name of creator, date, type…). Thus, NTFs are unique tokens, which allows them to ensure their authenticity to their owner. In other words, owning an NTF is like owning an authentic work of art, but in a digital and timeless form.
During the past few years, the market for NFTs has grown tremendously from 40 million dollars in 2018 to over 2 billion dollars today.
Are NFTs and the luxury market a compatible match ?
Given the recent expansion of the NFT market, there was some uncertainty as to the interest of luxury brands.
In the “real” world, the luxury market faces a huge competitor, being the counterfeit market. This is where NFTs offer a great advantage. Being unique tokens, NFTs cannot be duplicated, which allows both brands to ensure that no one is copying them and customers that they are the only ones holding that exact token.
In addition, a common thread that brings NFTs closer to luxury items is their timelessness. They are objects that are valued over the long term. Thus, in a few years, digital objects may be found in family heirlooms.
There are different ways luxury brands can explore this new world of NFTs. Amber Jae Slooten, co-founder of digital fashion house The Fabricant, explains some of them to Vogue magazine. She says that brands should not just replicate their products digitally, but think about making audacious digital items that could never be found in our reality.
Karinna Nobbs, co-founder of The Dematerialised, the first authenticated online marketplace for digital fashion, also speaks to the topic, advising brands to think “long term.” How will your customers use these NTFs once they’ve bought them? If it’s a piece of clothing, will it be worn by an avatar created in a video game or by the buyer himself using an AR (augmented reality) filter? The challenge here is to offer a digital item that would be bought once, but that could be used in many different ways.
What about the luxury brands that have taken the plunge ?
Pride by Givenchy Parfums
In honor of Pride Month 2021, Givenchy Parfums decided to shout loudly and clearly its support for the LGBTQIA+ cause, becoming the first luxury brand to create an NFT in service of a cause. The brand’s collaboration with London-based gallery owner Amar Singh and the artists of Rewind Collective has enabled the creation of a groundbreaking digital artwork. This work, entitled Pride, takes the form of animated photographs, inspired by the brand’s codes and uses the colors of the Rainbow Flag. It is available in 1,952 copies and was sold out in just a few seconds when it went on sale on the Veve platform in June 2021. At the end of this sale, $128,000 were raised and donated entirely to the association Le MAG Jeunes, Mouvement d’Affirmation des Jeunes Gais, Lesbiennes, Bi & Trans.
Collezione Genesi by Dolce & Gabbana
During the Dolce & Gabbana Alta Moda show held in Venice at the end of the summer, the Italian duo unveiled a collection made up of 9 pieces NFT, Collezione Genesi, produced in collaboration with UNXD, an organized marketplace for digital luxury and culture. Among this collection, we find 2 dresses, a men’s suit and 2 crowns, which are physical creations, imagined and realized by Dolce & Gabbana. These 5 pieces have been virtually reproduced by UNXD, and can be used in the metaverse. The other 4 pieces are exclusively digital. They are unique pieces inspired by the sketches of the brand’s designers, Domenico Dolce and Stefano Gabbana, and conceived by UNXD. After its release, the collection was sold 5.7 million dollars.
And, what do NFTs imply on the talent side ?
Finally, luxury brands are not the only ones who can benefit from this new technology. Indeed, on the social media side, Mark Zuckerberg seems to have understood that the future lies between the physical world as we know it today and the digital world of tomorrow. This in-between is now called the metaverse, and the CEO of Facebook recently said that the social media giant will soon turn exclusively to the metaverse. Mark Zuckerberg sees the metaverse as the succession of the Internet we know today, and thus decided to change the name of Facebook to Meta.
However, Mark Zuckerberg and the world of luxury are not the only ones who can benefit from this world of NFTs, what about the talent side? The answer to this question lies in the explanation of NFT influence marketing, which is a mix between classic talent marketing and NFT creation. It is about producing content similar to the traditional approach, except that in this case, the talent creates content in the form of NFTs and is paid in crypto currency. By introducing NFTs into their marketing strategy, talents then produce a new and better source of revenue.
You are a Talent and you are still hesitating to enter the NFT market? Here are 3 reasons why you should make the right choice:
1. The opportunity of an existing audience
Creating content through NFTs allows talents to offer content that is different and more valuable because of its rarity to its subscribers. If we take the example of talents passionate about fashion, art and video games, they have every interest in producing NFT content, because brands have already entered this new NFT market, as seen above.
2. Most of the revenue is yours
Unlike traditional partnerships, exclusive production of NFT content brings almost all of the revenue generated by its sale into the talent’s portfolio.
AirNFTs allow the talent not only to earn almost all the revenue generated on the first sale of their content, but also to earn money on future sales of that NFT. Indeed, by using his community, it is impossible to know when the sales of the content produced by the talent in question will end.
Thus, whether it’s a talent or a luxury brand, it’s in their best interest to enter the NFT market intelligently because as Mark Zuckerberg would say, here lies the future.