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Over the past year, non-fungible tokens (NFTs) have emerged as a promising new avenue for fashion brands to engage shoppers and build membership communities.
Brands can buy physical products or use them for free by providing exclusive access to free items or gated products or experiences using crypto wallets containing digital tokens as a unique identifier. You can attract customers who hold NFTs regardless of whether they have claimed them or not. NFTs linked to real-world goods can also authenticate products and act as gateways to related services such as repairs.
NFTs are part of the world of web3, the early Internet based on blockchain technology. Web3 proponents at a time when digital marketers in the fashion industry are grappling with the many challenges of reaching new audiences, including stricter data privacy rules, rising customer acquisition costs, and rapid content cycles on social media. says it provides a way forward.
NFT technology is still young, so web3’s user experience can be janky, and NFT buyers are currently a broader market niche to resell their tokens for profit. Tokens are often judged by their ability to And it remains to be seen how well NFTs will help introduce brands and their products to unconnected audiences. This is a top priority for digital marketers. prosper.
But some argue that the days of buying attention cheap online are over and it’s time for brands to start building approaches that align with this new reality.
Brian Trunzo, Metaverse Lead for Polygon Blockchain, said: “web3 has a more genuine way of talking to customers by incentivizing them – offering digital assets and profits through NFTs.”
Community building with NFT
Adidas has partnered with three influential web names – Bored Ape Yacht Club, Gmoney and Punks Comic – to launch 30,000 “Into the Metaverse” tokens in December 2021. Released the collection. Each cost 0.2 ETH, about $800 at the time. For the German sportswear brand, generating revenue has never been the point.
Erika Wykes-Sneyd, co-founder of Adidas’ web3 studio, said: (Adidas also shared proceeds from NFT sales with project partners.)
The brand offers NFT owners exclusive physical products such as tracksuits and beanies, and recently let them vote on the colors for its next release (orange and bright pink were chosen). Most of the community activity takes place on Discord’s servers, a chat platform dedicated to the project with about 60,000 members. Wykes-Sneyd said he plans to involve more NFT owners in the coming months, not just as customers, but as collaborators and co-creators.
Adidas’ relationship with this community differs from the typical brand-shopper relationship, primarily because members are financially invested.
“At the moment, these are the real stakeholders,” said Wykes-Sneyd. “They are rooting for us and trying to support the success of this project and want to see it succeed. (Lowest price refers to the lowest price of an NFT on the secondary market.)
So far, the project has been a success in her view, and the price of Adidas’ NFTs on the secondary market suggests that customers are still interested. As of October 2022, they were selling for around $700 on the marketplace OpenSea. That’s below the original dollar-equivalent cost, but is seen as fairly stable given the market turmoil this year, when the value of cryptocurrencies and NFTs plummeted. Adidas emphasized its focus on the long-term goals of the project and the communities involved, rather than market fluctuations.
Prada has also used NFTs to build deeper relationships with its customers, but has taken a different approach to distributing them. Allow shoppers to claim them for free when they purchase physical items from the limited-edition Timecapsule collection. So far, all NFT-linked drops have sold out.
NFT holders congregate on the Prada Discord server, which has approximately 5,600 members. In September 2022, one of her Timecapsule NFT owners received an invitation to Prada’s Spring/Summer 2023 show, a tour of Fondazione Prada (the company’s Institute of Contemporary Art and Culture), and other perks. Won a trip to Milan. Later this year, NFT holders were able to attend the upcoming “Prada Extends” event, this time in Miami, celebrating local culture and music.
Lorenzo Bertelli, Prada Group’s marketing director and head of corporate social responsibility, wrote in an email that NFTs will allow Prada to have a “higher level of intimacy” with its community base. increase.
“Web3 provides a unique opportunity to strengthen relationships with existing customers and engage with new and diverse communities,” writes Bertelli. “We believe our NFT program will form an increasingly important element in our customer relations and community engagement strategy.”
Members of the crypto community tend to be the largest audience involved in these NFT projects, but they are not the only ones. According to Bertelli, Prada’s NFT holders range from “very cherished long-time Prada enthusiasts to curious newcomers to web3-native attendees.”
As for Adidas, securing 8,000 NFTs in its initial sale to users of the Confirmed app, and releasing the advertised product to its many loyal fans has ensured a large number of established customers. Did. Many of them were new to the crypto world, Wykes-Snaid said.
Big Web3 Expectations
Managing a community and its expectations is not easy. Bertelli said Prada is making “significant efforts” to expand its capabilities on web3 and plans to continue investing to further support NFTs and community engagement projects.
Other NFT projects have met with backlash when expectations have not been met. Virtual Fashion and his RTFKT, the maker of his NFTs, said that when one of his hyped product drops experienced a technical glitch, customers were left waiting for hours trying to claim their items. He publicly apologized to his members of the community. His NFT owner of Adidas hasn’t given regular updates on what to expect from the brand, and he hasn’t taken his complaints directly to Adidas on Discord, which has left him unsettled.
Wykes-Sneyd said: “For us, it’s about having front-row, unfiltered access to what people are feeling and thinking, whether it’s good, bad or indifferent.”
Of course, brands can use NFTs without creating explicit membership groups. They can treat it as a way to push incentives and rewards into the owner’s cryptocurrency wallet to occasionally get their attention and build loyalty.
However, one of the challenges all NFT creators face is making sure their customers have a reason to care about their NFT in the first place. Ideally, there should be some reason for the token itself, according to Pierre-Nicolas Hurstel, co-founder and CEO of Arianee, an NFT platform for luxury and fashion brands.
“NFT utilities should be native. It’s proof of something, so the question is: Is there a good reason to distribute proof of something to someone? Proof of attendance, participation, proof of ownership.” said Hurstel.
One of the aims of the Prada project is to provide a perspective that only Prada can provide. As with the physical products you offer and your brand identity, your brand needs to stand out and give consumers a reason to associate with your brand. His Trunzo of Polygon said:
But if brands can get shoppers to want NFTs, they can provide the foundation for a deeper relationship than just collecting emails at checkout or shoppers following brands on Instagram. There is no mistake. Hurstel described NFTs as “zero party data.” This is in contrast to third-party data collected and sold by other platforms, or first-party data collected by the brands themselves. This represents a consciously chosen relationship by customers, which also has the advantage of eliminating data privacy concerns, Hurstel said.
He and other members of web3 envision a future in which a customer’s cryptocurrency wallet will be their public profile, and NFTs collected through purchases and event participation will be a way for brands to identify their customers’ interests. increase. However, getting to this point will take time and cryptocurrency wallets will become more widely adopted.
“This conversation about blockchain, which solves the identity problem and puts consumers in control of their identities, [where] they can opt in. It sounds ideal,” said Trevor Testwuide, co-founder and CEO of Measured, a digital marketing analytics platform. “To roll it out at scale, we have a lot of work to do to get there.”
Brands like Adidas and Prada are among the brands that have enough potential to start right now.
This article first appeared on State of Fashion 2023is an in-depth report on the global fashion industry, jointly published by BoF and McKinsey & Company.
