Have you heard of NFTs in the luxury industry?
Digitalization, and with it the NFTs, is becoming more important every day in the world with respect to the exchange of goods as we know it, this wave has been implemented in a variety of aspects, let’s say “futuristic”, although it is also today and now. With people moving online, the demand for the digital luxury industry takes on great value and becomes a fundamental pillar in the economy.
For those who do not know, NFTs are a type of currency, which allows transactions and exchange value as known traditional money does. These represent unique assets, which contain a code that describes the properties of each token, so their ownership is provable and traceable, making them more secure, and since each token can be verified, it is possible and easy to ascertain that it is not a counterfeit.
NFTs (Non-Fungible Tokens, for its acronym in English) in terms of luxury brands are expected to reach 56,000 million dollars in 2030. And Morgan Stanley estimates, for example, that NFTs will represent 10% of the luxury market also in 2030. Considering that high-end brands such as Burberry, Dolce & Gabbana, Balmain, Balenciaga, among others, have already joined this movement.
More than a trend!
Even if digital seeks to make products, data and knowledge more accessible to everyone, there are three essential aspects when describing an NFT in the luxury industry: rarity, exclusivity and price. Considering this, luxury companies are able to offer completely personalized and authentic items through NFTs. This is a great opportunity for premium brands, as it converges with their value propositions.
Some success stories are:
The brand offered digital models of real products to Roblox players in May 2021, some of which, after being fully acquired, were auctioned off. One of them, the virtual version of the Dionysus bag, was auctioned for $4,100, much more than its real version.
At the end of 2021, it offered a digital clothing line in the Fortnite game, which could be purchased with in-game currency for around $8. According to experts, these investments in digital assets can add up to 20 million to the luxury industry.
Also ending 2021, 777 NFTs were launched on The Dematerialised, a digital fashion marketplace. This was a very successful launch and exceeded all expectations, selling out within seconds.
There are many signs that digital assets, including NFTs, are here to stay. For example, Rachel Weller, CEO of Burberry says: “We are on a learning curve, so there is great value in how we learn to engage with the community and new creators and how that relationship evolves.” The more brands join the movement and become familiar with it, the more it will become every day and not so “futuristic”, because the future is today.