6 Uses for NFTs in the Fashion Industry: Why Web3 is in Style

High-end fashion is no stranger to being on the cutting edge. The industry is known for pushing boundaries and setting trends. So it’s no surprise that this industry is championing web3 technologies in their infancy.

Non-fungible tokens are ideal for the fashion industry. They are uniquely identifiable and can be generated infinitely and easily, making them the perfect cataloguing tool. Even further, they can be used to verify the supply chain, to tokenise fashion events and offer even more incentives to fashion enthusiasts.

Let’s have a look at the 6 main uses for NFTs in the fashion industry.

NFTs for Authentication

To see a great example of big brands utilising the power of the blockchain, you needn’t look further than Louis Vuitton. They have been at the forefront of the web3 revolution in the fashion industry for years. Back in 2019, LV and some other high-profile partners launched the Aura Blockchain Consortium, a blockchain solution for luxury brands.

Aura is a non-profit that encourages all luxury brands from all industry sectors to join their association, and to promote the use of their blockchain. The premise is to use NFTs to identify and verify luxury products, using the NFTs as unique identifiers for each item. Customers are then able to self-verify the products as genuine, whether they’re buying them in a store or second-hand. Aura’s mission is to involve everyone, to create a decentralised network of fashion brands working together to fight the counterfeit industry, which has been estimated to value $600 billion.

Smart contracts could be used to authenticate a change of ownership, so that you could see on the blockchain where your second-hand item had come from originally, and how many hands it had changed.

But the benefits of this system don’t stop there. Fast fashion and the globalisation of goods are costly to the environment, and supply chains can be rife with forced labour and exploitation. But NFTs mean that every step of the supply chain is totally traceable back to its origin making carbon-heavy and sweatshop clothing a thing of the past.

NFTs for Sales

But NFTs are not just a secure form of authentication. They are also extremely profitable, if done well.

Just look at Nike’s collaboration and subsequent purchase of RTKFT, the digital sneaker project. RTKFT netted $3.1 million in sales during their partnership with artist Fewocious in a matter of minutes. They have also recently seen a boggling $125,000 payout for a digital jacket in the metaverse. Their success story alone should be enough to herald the coming of a new norm in the fashion industry.

With the often-warned ‘death of the high street’, fashion companies look more and more to ecommerce to make sales. By engaging with the internet audience and fostering a community online, brands can form a more personal digital relationship with customers, encouraging customer retention and positive word of mouth. NFTs can go a long way to fostering a strong community, you’d only need to look at the Bored Ape Yacht Club and its legion of fervent fans on social media.

NFTs can be a great way to inspire brand loyalty due to their collectible nature. Going back to Louis Vuitton, they released their own web3 gaming experience, called Louis: The Game. The game uses embedded non-fungibles designed by Beeple, who designed 10 of the 30 embedded NFTs that serve as collectibles; they are not tradeable. LV’s true purpose behind the game was not to make money, but in fact to entice Gen Z into the market, who offer a whopping $140 billion in potential spending power.

Despite the high retail prices of luxury fashion, it is actually the second-hand market that is growing the fastest in the industry. Sales of second-hand luxury goods are currently booming, according to an analysis by Bain & Company, growing from 26 billion Euros in 2019 to 28 billion in 2020. Smart contracts could be used to automatically charge a small royalty fee on each sale of the item, meaning some of the profit from the second-hand market returns to the original seller.

All of this goes to say, the market for NFTs is alive and well, despite recent shifts in the crypto market. The technology is thriving, and really it’s down to brands to spin the tech in a way that benefits them and their consumers before their competitors do.

NFTs for Real Goods

Many people mistakenly associate NFTs as just being PFPs or artworks, but in fact the term ‘non-fungible token’ just means that the ‘token’, as in the code or picture or whatever it may be, is completely unique and has no equivalent token that is the same. In practice, this makes NFTs the ultimate tool for identifying products, as each is unique and immutable on its blockchain.

So what if you don’t just want a unique digital sneaker? What if you wanted something more tangible? Several brands are well aware of this and are offering exclusive items alongside their NFT collections, using the NFTs themselves as both digital products and proof of ownership.

Adidas

In 2021, Adidas launched a huge 30,000-strong NFT collection that sold within minutes at public launch. The NFTs allow people to unlock exclusive access to premium experiences in The Sandbox, a metaverse experience, but will also grant holders access to exclusive physical merchandise they can redeem using their digital item.

Louis Vuitton

Consumers are also eagerly awaiting the commencement of LV’s VIA Treasure Trunk project, which will see the release of the luxury giant’s first-ever physical NFT collection, priced at a hefty $39,000 a piece. The release of these ‘treasure trunks’ is locked up behind a waiting list, with LV inviting participants as they see fit to purchase the trunks with fiat or cryptocurrency. Later on, holders will receive a made-to-order physical twin of their NFT.

RFNFT

RFNFT are innovating with their NFC-enabled chips, which they are slipping into apparel, posters and even comic books. By scanning the physical product, you can claim yourself an NFT, bridging the gap between the physical and digital. The NFT can be redeemed or kept on the product, serving as a cold wallet. RFNFT also provides white-labelled landing pages for custom shopping experiences.

GAP

GAP also has a finger in the NFT pie, collaborating with artist Brandon Sines, the mind behind the Frank Ape cartoon — they are releasing an NFT hoodie that can be redeemed for GAP x Frank Ape sweatshirt, giving the holders even more value for their money.

Independent Artists

We already mentioned him above, but 20-year-old artist Fewocious has skyrocketed to success since their debut digital artwork in 2017. Since then they have seen numerous successes, but perhaps their most notable was their partnership with digital sneaker brand RTKFT. Ferocious’ collab sneakers with RTKFT sold out in minutes, netting upwards of $3 million.

Patrón

And this isn’t just limited to fashion, just look at Patrón, the premium tequila company. They launched their first ever NFT collection with BlockBar, offering holders the right to claim one of the 150 bottles of Chairman’s Reserve for around £3,000.

NFTs for Exclusivity

A big aspect of NFTs so far has been their exclusivity. It is in their nature, after all, as unique items accessible usually through purchases with cryptocurrency. Several brands have leaned into this exclusivity, the most notorious being Bored Ape Yacht Club, which offer exclusive events and limited merchandise only available to their community of NFT holders.

In 2022, British artist Damien Hirst launched an NFT collection called “The Empresses” which had a unique twist. Holders would have three years, ensured through smart contracts, to decide what to do with their NFTs. They had three options:

• Claim the physical print and burn the NFT
• Keep the NFT and Hirst would burn the physical print
• Trade the NFT with someone else and let them decide

Hirst’s project challenges users to consider what they value more: a physical product, a digital collectible or simple cash. Each user will make a different choice, but nobody can have all three, and with limited time to make the decision, each user is likely to regret taking one or the other.

The project begs questions around NFT technology, and its place in our society going forward. It also weaponises the fear of missing out, a fear that fashion brands have been utilising for years by making designer drops ‘exclusive’ and ‘limited time’.

This FOMO-baiting has been something we have seen endlessly in the NFT market, their non-fungible nature only encouraging it. Whether this is a good thing or not is up to you, but it’s undeniable that exclusivity has a huge impact on customer mentality.

NFTs for Fashion Events

The fashion industry has always thrived on the excitement and exclusivity of fashion events, such as runway shows, fashion weeks, and exhibitions. With the emergence of NFTs, these events are poised for a transformation that blends the physical and digital worlds, creating unique and immersive experiences for fashion enthusiasts.

One exciting prospect is the use of NFTs to create exclusive virtual fashion events. Brands can leverage NFT technology to offer limited-edition digital tickets or access passes to virtual fashion shows. These NFT tickets can grant holders special privileges, such as backstage access, exclusive interviews with designers, or virtual meet-and-greets with models. By creating scarcity and uniqueness through NFTs, fashion events can attract a global audience and generate buzz like never before.

And why limit the events to the physical world? Louis Vuitton, Valentino and Burberry are just a few of the brands that have offered wearable NFTs at their shows attracting some high-paying customers with one virtual handbag even selling for $4,000 dollars. Virtual fashion is hardly a new idea, with simulators like Second Life and The Sims offering digital fashion for the last 20 years. It seems that prestige fashion brands are slow to catch up, but events and exclusive experiences have offered a perfect opportunity for them to now do so.

Brands can also monetise their events in new ways. For example, they can collaborate with renowned artists to create unique NFT collections inspired by their fashion shows, featuring digital artworks, augmented reality experiences, or even virtual fashion pieces that attendees can own as limited-edition collectibles. This not only provides revenue for the brands, but also a tangible and memorable way for attendees to commemorate their participation in the event.

Additionally, NFTs can extend the lifespan of fashion events beyond their initial run. Iconic runway moments and exclusive designer interviews can be enshrined as limited edition NFTs and auctioned for fashion enthusiasts who want to own a part of history. Not only would this generate a secondary market for event-related NFTs, but also generate engagement with the event long after doors have closed.

NFTs for Democratising Fashion

The fashion industry is historically known for its high barriers to entry. For fledgling designers, getting your designs seen by consumers can be very challenging. But web3 is all about democratising access to all industries and technologies, and NFTs can be a major part in disrupting the traditional paradigm in fashion.

NFTs can empower aspiring fashion designers, independent artists, and creators from underrepresented communities by providing them with a platform to showcase their talent and connect directly with consumers. Through NFT marketplaces, these emerging voices can mint and sell their unique fashion designs as digital collectibles. This eliminates the need for traditional gatekeepers, such as fashion editors or buyers, and allows creators to establish a direct relationship with their audience.

This direct-to-consumer approach allows designers to bypass traditional funding models and gain financial backing from a community of fashion enthusiasts who believe in their vision. Upcoming designers can showcase their work, host pre-shows and limited access to designs, and build a relationship with their consumers without needing a big label brand to back them.

NFTs also have the potential to challenge the traditional notions of ownership and intellectual property in the fashion industry. By minting NFTs that represent specific fashion designs or patterns, designers can protect their creations and establish proof of ownership on the blockchain. This opens up new possibilities for collaborations and licensing, as designers can negotiate deals and royalties with brands or retailers while retaining control over their intellectual property.

Even better yet, NFTs can democratise access to fashion education and resources. Educational institutions and organisations can leverage NFTs to create digital archives, virtual exhibitions, or interactive learning experiences that provide students with insights into fashion history, sustainability practices, and design processes. By tokenising educational content, students from all over the world can have access to valuable resources that were previously limited to a select few.

Summary of NFTs for Fashion

It is clear that NFTs offer a wealth of opportunities to almost every industry, but we think that the fashion industry could be one of particular interest to web3 users. It has already been proven that there is a market for prestige NFT content, you needn’t look any further than the Bored Ape Yacht Club, but there is also the CryptoPunks, Art Blocks, The Sandbox and our own Female AF Collective.

As more and more big brands embrace web3 technologies, the future of many industries is coming into question. It seems to us that companies that will do best are the ones that can seamlessly onboard web2 users into a new infrastructure. Currently, most web3 projects focus on the technology over the user experience, and this is something that needs to change for mass adoption.

Many more consumers would use NFTs without knowing if brands spent more time integrating the technology into their retail experiences. Successful fashion brands will install NFTs into their supply chains, use them for authentication of their products, and invest in collaborations with metaverse agencies to bring their style to the digital world, all whilst keeping the NFT threads hidden between the seams.