An NFT (non-fungible token) is data added to a file that creates a unique signature. It could be anything from a song, an image file, a text, or a tweet posted on a website. It could also be a physical item and various other digital formats. This implies that NFT is a digital file that is marked with a unique code to differentiate it from its digital replica. The future of NFT in the fashion industry looks quite promising as it is set to address various challenges that the industry is facing currently.
The disruption in retail due to the pandemic has only paved the way for a surge in the sale of luxury goods and the sales are expected to grow by 25 percent in 2022. Much of the growth has been driven by e-commerce with online sales totaling 23 percent of all luxury sales in 2020.
Much of this growth has been driven by e-commerce with online sales totaling 23 percent of all luxury sales in 2020. With brands readily trying to expand their reach into the new digital territory of the metaverse, the parallel rise in fake goods in the digital and physical world is proving to be a major challenge. According to a report published in Harvard Business Review, the sale of counterfeit luxury products contributed to over 60 percent of overall global trade annually.
The rise of Metaverse and Web 3.0 are set to drastically impact various business segments including the billion-dollar global fashion industry. With the world moving from physical to digital, the traditional segment can transform seamlessly into virtual wearables that can work well for both augmented reality (AR) and in real life.
Digital fashion NFTs cover everything from clothing, shoes, accessories, jewelry, and more that can be worn virtually or within ecosystems. These digital wearables are for collecting and for speculative investment.
Wear-to-earn NFT
A wear-to-earn model in AR environments will help brands, designers and retailers will design clothes for digital closets. To build long-term relationships with consumers, the designers will pay consumers to wear their virtual items. Brands will compensate consumers for wearing pieces by providing them access to exclusive items or by paying them in the form of fungible tokens.
Wear-to-earn model enters the fashion industry
Today, fashion brands are aiming to scale their cost operations for boosting consumer awareness and most importantly, highlight the DNA of a brand. In fact, the current trends prove that NFTs are slated to become a tremendous player in 2022 and will also boost the value of consumer purchasing power.
With the rise of virtual wearables, the chief editor at Vogue Singapore, Norman Tan believes that he is bullish on digital fashion. He believes that digital fashion is set to disrupt the Metaverse and will wearables will help ease sustainability issues. With 40 percent of western closets going unworn, digital clothes could result in an eco-friendly replacement for physical items.
NFT tokens would also serve as certificates of authenticity and curb the sale of fakes. This could mean unlocking a digital version of the item and gaining special access to the designer’s online community.
Big Brands are Joining NFTs Industry
With major fashion houses joining the wagon, the future of NFT looks quite bright. Dolce & Gabbana, the leading Italian luxury brand would be launching the D&G family NFT. This will provide consumers access to exclusive physical apparel only available through the drop. A recent announcement made by the brand claims that the project would initially consist of 10,000 avatars NFTs called Dava which would be minted with 30,000 wearable items. The owners would benefit from invites to events, giveaways, NFT airdrops, and more.
Brands like Stefan Cooke and Balenciaga are eyeing the gaming community which is one of the untouched customer bases in the fashion industry. With investments in metaverse through video game skins, the companies will tap into the $40 billion a year market. The fashion industry has made a radical switch from making fewer products at the start of the pandemic to finding a way to make no physical products at all with the rise of NFTs.
The future of digital wearables
Wearables are going to be a fruitful venture for brands. We can expect brands partnering with other companies to provide more features to their consumers while they shift their focus on the product itself. Several brands have already made considerable progress in leveraging the power of digital wearables and much more is yet to come.
Conclusion
It would be safe to say that digital clothing will put an end to the supply chain crisis that the fashion industry was facing during the pandemic. It would as well address the sustainability issues. Metaverse and NFTs have made it possible for brands to earn without having to produce anything physically. The future of NFT looks quite promising. Though there are challenges ahead, it is going to herald new beginnings.
