On the 10th of September 2021, Karl Lagerfeld NFT collection of 777 pieces, priced 77 euros each, sold out in 33.77 seconds.
Fashion brands are beginning to capitalize on the emerging opportunities as digital assets, such as NFTs, become more popular and more users play online games focused on socialization, including Fortnite, Roblox and blockchain-based worlds like The Sandbox.
NFTs function as valuable, unique items traded within the digital space. The ownership and authentication of these digital assets are monitored via digital ledgers or the blockchain similar to other cryptocurrencies. NFT stands for “non-fungible token,” which means that you receive a unique, irreplaceable JPG file instead of receiving a physical item you can wear. An NFT is a one-of-a-kind, like a digital haute couture gown. Therefore, digital items take on properties once relegated to physical goods, such as scarcity and unique ownership, and scarcity triggers an emotional response. We find it difficult to resist items that are scarce, which elevates the product’s status. NFTs give brands the opportunity to turn digital designs and collections into scarce and valuable pieces.
The Fabricant’s iridescent dress was the first recorded sale of a fashion NFT. The dress sold for the equivalent of $9,500 in May 2019. Gucci became the pioneer brand in the luxury market with the Aria film, a four-minute film inspired by the collection, which auctioned for $25,000 in May 2021.
A number of brands subsequently presented a variety of NFT projects, including Louis Vuitton, Jimmy Choo, Givenchy, Burberry, Levi’s, Dolce & Gabbana, Gap, and Adidas. Balmain has released at least four NFT projects and is aiming to release more in the coming seasons as is Gucci. Brands’ strategies have begun to mature from design experimentation and digital collectibles to tokens that provide unique benefits through partnerships, virtual worlds, and structures.