NFTs: the new frontier in fashion and luxury

NFT (almost the acronym of New FronTier) stands for Non-Fungible Token: a unique and non-interchangeable asset coupled with a digital certificate stored on a blockchain.

Following what is seen as a new "gold rush" in the arts market with digital collectibles, NFTs are certainly not a fad in luxury and fashion, and are here to stay. The digital transformation influence all aspects of our lives, including the way people consume to enhance their lives, make them feel better..., which is what luxury is ultimately about, isn’t it?

Therefore, I see no reason why it should not impact the luxury offering and not lead brands to be more daring by extending their product portfolio into the digital space. The fast-rising NFTs phenomenon is building up gradually as a trend leading to a long term change, and will certainly gain traction in the post-Covid world where 'remote everything' become routines (socialising, working, shopping…) and where moving from physical to digital spaces become the new normal.

The NFT ecosystem, generating verifiable digital scarcity, is a great opportunity to complement the portfolio of luxury and fashion brands, especially given the fact that its business model relies on creativity, authenticity, scarcity and individuality. NFTs are a strategic and logical addition to introduce new potential value creation in the fashion and luxury industries and an effective way to lure collectors big and small, investment-minded customers as well as brand fans. This being said, in addition to a new offering, brands should not forget to reinvent their clienteling strategy and to invest in experiential and engagement marketing dedicated to NFTs (some ideas are already germinating in my mind :-) in order to inspire customer and convince them to enter into what is more than a new category, but a new world. 

At this point in time, one aspect to overcome still is the sustainability challenge. Like any other blockchain generated assets, the environmental impact of the NFT market is detrimental because of the high carbon emissions, since most NFTs are bought and sold with Ethereum, a cryptocurrency. But solutions and best practices in sustainable digital technology are already starting to emerge. Furthermore, by transferring physical objects to digital objects and owning a non-material fashion or luxury item could become a climate and environmental-friendly option by saving resources from Mother Earth and reduce the CO2 footprint involved in the making of product and associated with the supply chain. 

No doubt that NFTs have a bright future and will conquer a new segment as part of the luxury and fashion market.