NFTs have enabled new client interactions, incentivization, loyalty, and community engagement across every industry through efforts like NFT art and games. The fashion sector, however, is arguably one where NFTs hold some of the greatest potential.
A non-fungible token (NFT) is a digital asset that is stored on the blockchain. It can be bought, sold, or exchanged. NFTs have recently swept through the fashion sector. According to data from Vogue Business, 1 in 5 customers of luxury clothing view NFTs as an exciting development for the sector. Brands are also paying attention. The Adam Bomb Squad, a line of NFTs by streetwear company The Hundreds, a Shopify Plus store, features 25,000 different graphical combinations of the brand's distinctive explosives and backgrounds. A company called Look Labs promoted a "digital fragrance" as an NFT.
A total of 17% of the brands included in the Vogue Business Index have already experimented in some way with NFTs. We’ve even outlined a list of 42 brands using NFTs and how exactly.
So, how will NFTs alter fashion eCommerce, what new fashion trends will shape the sector, and most importantly, how can companies get ready for and benefit from the quickly changing business environment?
Before we get to the practical steps, let’s start off with a few clear benefits for fashion brands looking to use NFTs.
Benefits of using NFTs for fashion eCommerce brands
Research & development
Businesses can use NFTs to reward customers for participating in surveys, beta-testing, or they can give some NFT holders the ability to vote on the roadmap for a product's development. Businesses can get insights into how their customers think and then build products accordingly.
Offer unique value propositions
NFTs have the potential to bridge the physical and digital worlds. They can make abstract ideas, concepts, and events have tangible worth. How you can provide value through NFTs is by making meaningful use of the technology, be it access to an exclusive club, a means of managing collections of physical items, or even a digital warranty for a physical item.
Build a community
Through holders-only Discord groups or communities, NFTs serve as social tokens that enable customers of fashion brands to interact with one another. Allowing customers to own tradable NFTs of their preferred fashion brand provides them with financial incentives to dedicate themselves to community building and act as brand ambassadors.
Fashion brands' loyalty and membership programs can be taken to the next level via NFTs. NFT collectibles, which work like a membership card or ticket to open special experiences, are offered by fashion companies like Bathing Ape and Adam Bomb. Owning a Bathing Ape NFT offers free exclusive goods and airdrops while holders-only events and quick checkouts at their warehouse sales are benefits for Adam Bomb NFT holders. These exclusive activities could endure for several months or even years, which motivates NFT holders to continue participating over time.
Token-gated eCommerce can be a step forward to better recognition and rewards for member loyalty.
Leverage demand for virtual products
It's easy to picture a person purchasing a virtual high-end sports car to gain an advantage in a racing simulator. In a virtual setting, wearing an expensive suit has similar advantages to wearing one in the real world.
It's more difficult to see how Taco Bell may use virtual products. Certain advantages of a Chalupa Supreme don't seem to transition well into a virtual setting. That didn't stop them from producing and selling virtual goods worth tens of thousands of dollars though.
The message is clear-cut. There is a way to create and market items in virtual settings if you develop and sell them to real people. And the value of such products may only rise as we move closer to an immersive multiverse.
Actionable steps to start using NFTs for your eCommerce
Here’s a breakdown of some practical steps that you might encounter when creating and selling an NFT online.
Start with the visuals
This is where you let your creativity run wild and aim to create something unique, aligned with your brand and customers. You don’t even need talented artists to mint a successful NFT, just creativity for a worthy concept.
Visually, you want something that elicits a reaction from the viewer. Better yet, a strong emotion, perhaps excitement, FOMO, or sentimentality. If this NFT idea is based on a solid concept, it doesn’t even need to be as visually engaging as a lot of other NFTs out there. An example of an NFT that was successful but wasn’t even well-designed is Jack Dorsey’s first-ever tweet.
There are many ways to find and collaborate with artists on an NFT project if need be. Just make sure you do your research about NFTs and the artists, visualize and plan what your NFT would look like, and communicate with the artists properly and efficiently.
Some examples of successful and well-designed NFT art would be the bored ape yacht club, Beeple’s Everydays: The First 5000 Days, and CryptoKitties. Cartoonish and retro styles may seem more popular in the NFT space, but there are many more styles you can work on. Just be creative.
An NFT can be anything digital, thus it can be related to several types of digital files - collectibles, cards, objects for gaming, or fashion items for use in virtual worlds. There are many other types of digital art that you can work on, and in the future, the physical and NFT worlds may even merge.
Choose your platform and create a digital wallet
To sell NFTs, two essential parts come into play.
- A digital wallet
- An NFT marketplace
There are a lot of marketplaces out there, but the most popular are Rarible and OpenSea. The selling process differs slightly, so you’ll have to figure out the steps - usually, a few clicks to get your NFT out there.
There are also many different types of digital wallets to choose from such as mobile wallets, web wallets, and desktop wallets. The variation you pick will depend on your priorities and preferences as a brand. Each wallet has its own steps for account creation so be sure you understand everything.
Once you have your wallet, it’s time to create an account on a marketplace and upload your creative output up for sale.
Integrate NFTs with other platforms
Some prominent examples of platforms integrating NFTs include Instagram, Spotify, and Twitter.Facebook & Instagram also introduced NFTs. Artists can display their NFT collections on Spotify. Twitter has integrated NFTs into its platform in the form of ‘soft hexagon’ shapes for the NFT holder’s profile picture.
Although many of the solutions today are integrated vertically, there will be more flexible solutions in the future. Here are 4 steps that you should consider when integrating NFTs into your business.
- Determine what the NFT use case will be.
- Mint the NFTs
- Start engaging customers.
Leverage utility NFTs
In a nutshell, utility NFTs add utility to standard NFTs. They have been used in the real estate sector, the gaming industry, social networking as well as fashion.
In fashion, for example, utility NFTs come in the form of digital fashion, or discounts. A step up from here would be exciting shopping experiences, virtual fashion shows, and more.
NFTs are changing the eCommerce industry in a number of significant ways. For one, eCommerce brands can use NFTs to offer their customers partial ownership, which can make pricey things more accessible.
NFTs can also eradicate forgery and counterfeiting which leads to better security for platforms and customers alike.
An interesting example of utility NFTs in action would be Crypto Baristas, which is a collection of NFTs focusing on providing their owners with the “complete caffeine experience,” and the holders can receive discounts on merch, online stores, or future cafe locations.
To spice things up, you might conside Dynamic NFTs or dNFTs which change with time.
Build hype with pre-launch of new products
Before releasing a new product, it is the top priority of a brand to generate hype. Early access to NFT tokens could let users generate buzz and attract attention.
You can build a solid base for early adopters with the help of these customers. Businesses used to mint and sell NFTs through a third-party marketplace, but Shopify now enables direct sales.
Try giving free NFTs first
Giveaways can be a fantastic method to increase visibility, followers, and interaction. This is especially important if the NFTs are brand-new and people may be interested in receiving some for free.
Giveaways of NFTs can support building up pre-launch hype. Airdropping NFTs can be done in bulk to reduce costs.
In the end, customer preferences are changing fast with the rippling tides of new innovative developments in the digital space. Fashion brands are on the cusp of potential new gains and business growth through features that NFTs and blockchain technology offer the world, which is why it is crucial that brands keep an eye on the future of eCommerce by moving towards the new tier of customer experience initiatives that NFTs could represent.